As financed by microcredit, micro-enterprise helps improve the quality of life for people in developing countries like India. Some of the common examples of micro-enterprise businesses include grocery stores that sell dairy products and other groceries, fruits, etc. These businesses not only help in promoting quality of life for business runners but also add value to the local economy. They produce numerous jobs at small-scale, improve income, and boost purchasing power. Learn more about what micro-enterprise is and how they are helpful for the economy of the country.
Microenterprise also refers to micro business, which starts with a less amount of capital plus employs a small number of people. Generally, microenterprise serves as a trademark of developing the country as well as its economy. Many people found a shortage of jobs in the formal sector; however, micro-enterprise help them to find a good job in a desirable sector. Apart from creating jobs, they increase purchasing power, reduce production costs, and offer convenience.
Even the government encourages microenterprise development in low-income areas. It helps not only business but also the economy to grow. In addition to it, such enterprises aim to promote sustainable development. A micro business must get treated in the same way as any large business from a proper business plan to professionalism. The higher commitment and good initiative lead to the development of micro-enterprise businesses into bigger entities.
Microenterprise in India helps in creating large-scale employment in the economy. With the use of limited finances and investment, micro-enterprises aim to provide good jobs to job seekers.
One of the great objectives of microenterprise is to promote trade and industries in an economically backward area. As a result, it helps in the development of the economy.
Micro enterprises help in bringing the backward areas into the plan for national development. They aim to encourage regional development.
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The above picture shows ladies selling food items to earn and it’s a kind of micro business. They may work under industry or may start their own business.
Microenterprises help in filling the gap effectively in developing economies. It helps in improving the mobilization of plenty of natural resources in India.
Irrespective of where people live and work, micro-enterprise helps in improving the living conditions of all citizens.
With the emergence of advanced technologies, it is becoming a challenge for micro-enterprise businesses to balance their reputation. The Government of India has already taken several steps due to which ease of conducting business for microenterprises has increased.
Microenterprises contribute a considerable portion to the economy. Some of the business types considered as micro-enterprises are as follows.
Lawn and landscaping companies
Machine shop operators
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The above picture shows a micro-enterprise business where a group of ladies is making pots to earn for their families.
In some of the cases, people become micro-entrepreneurs by need or necessity. Many people in the country engage in self-employment to fulfill their family needs and serve the community. However, a subset of micro-entrepreneurs comprises highly talented people who prefer entrepreneurship over paid employment. The micro-enterprises have high potential to run highly profitable businesses and enhance the national economy.
The successive development of micro-enterprise and small-scale industries in the nation has led to a significant rise in the per capita income. It can be seen from various micro-enterprise examples that these contribute to the country’s employment.
With the economic development of smaller towns and villages, it helps fill the gap between rural and urban areas. The significance of micro-enterprise businesses can be noted from the fact that it serves as one of the largest employment providers in India.
The establishment of micro-credit and micro-financing in India is one of the major components in microenterprise development. It allows individuals with low, moderate, or no income to start their own business and earn.
With a relatively low investment, the micro-enterprise produces immediate employment opportunities. Additionally, it promotes a more reasonable distribution of national income and makes efficient mobilization of human skills.
Though micro-enterprises play a vital role in the economic development of any country, still there are some challenges that need to be taken into consideration. It requires a lot of government services as well as approvals. However, by making critical efforts to develop self-sufficient groups of manufacturing competence, microenterprise development can be easily measured.
Q1. Give examples of Micro Enterprises Business.
A1. If in a business, the annual income would be less than $250,000, then it is a micro-enterprise business. For a growing economy, micro-businesses are very profitable and growing in a good phase. These enterprises also fall under the subcategory of small businesses that have childcare, catering, accounting, planning, house cleaning, etc. Most of the micro-enterprises businesses need the same skill to proceed and work. These businesses are considered to be initiatives to the market economy.
Q2. Define Micro and Small Enterprises.
A2. As defined by definition, small enterprises are those with less than or equal to 50 workers working under it. However, in a micro-enterprise, it has around ten people working under it. Micro Businesses do not work on a large scale but are the initiatives to the future businesses and a country’s economic growth. Also, in the micro-businesses, the machinery cost is not more than 25 lakhs, but in small enterprises, it is more than 25 lakhs but less than 50 crores.