Hazards of Setting up a Microenterprise

Abstract

The generation of new jobs and general economic well-being depends on the success of the nation's small enterprises . A staggering 88% of all firms in the American economy were micro-enterprises in 2008. (Association for Enterprise Opportunity, 2010). In Europe, small and medium-sized businesses (SMEs) account for more than 99 %of all businesses, with 90 percent of those categorized as micro companies.

The fact that 53% of all employment on the continent are provided by these small businesses speaks volumes about their significance (Bushfeld, Dilger 2011). There has been an uptick in studies and focus on the internal and external factors influencing the expansion and success of small and medium-sized enterprises (SMEs) (Street and Cameron, 2007). Notwithstanding the fact that most SMEs are micro enterprises, experts have said that empirical data on what affects micro company development have been disregarded (Heshmati, 2001). This prompted the study's authors to wonder whether there is a knowledge vacuum in this area or if the difficulties faced by micro companies are different from those faced by SMEs.