Making Money:Note on Micro-enterprises

What are micro-enterprises?
Micro-enterprises by definition are very small businesses. These are generally started by low-and moderate-income individuals for the purpose of creating their own job or extra income for themselves and their families. The characteristic feature of successful micro-enterprises is that they utilize local resources and skill sets to produce goods and services that generally cater to the local demand but depending upon the availability of distribution channels may even go to distant markets.

What is micro-enterprise development?
Micro-enterprise development is a process of providing services to micro-businesses to help them grow quickly at a reduced risk. These services include business training, technical assistance to create a business plan, microfinance, technological and marketing support.

What kind of service-support micro-enterprises require?
Micro-enterprises need service support in the following areas:

• Resource mapping to identify locally available raw materials, skill sets and technology. Micro-entrepreneurs, often, have a set of skills that pass from one generation to the other. These skills evolve over time to meet the requirements of the local market. However, to remain competitive they need to identify optimal sources of raw materials and continuously upgrade skill sets and technology,

• Market Research to help determine the nature and distribution of demand for the product,

• Functional training in areas of finance and accounts, supply chain management and marketing,

• Business planning and financial modeling enabling the entrepreneur to develop the right business mix and a set of best business processes and practices,

• Business audit to ensure that best practices continue within the enterprise giving it a better chance of attaining sustainability,

• Finance – working capital loans, longer tem loans based on organizational requirements. Microneterprises also need support in linking with the providers of finance as banks and formal financial institutions need detailed project proposals. For small investment requirements, Micro Finance Institutions represent an easy and more accessible source of funds.