| SCALE UP MICRO-ENTERPRISES TO SMALL BUSINESSES: A STRATEGY OF JOB CREATION |
| Practitioners of Community Economic Development have recognized that the promotion of microenterprises to small businesses could be more successful than searching for big manufacturing plants or employers that will bring in hundreds of new jobs. However, to grow, these small businesses do need: personal improvements, business management training and value enhancement plan. Coupling Small Business Development Services with other initiatives could represent a way to amplify program effectiveness and a means to contribute to improved local economic development. A micro-enterprise is considered to be the smallest of small businesses: those that started with no access to banking and other financial services, employ fewer than five people (household and family members most of the time) and generate less than $250,000 in annual revenue. There is a niche market of young businesses older than three years and having a sales volume between $100,000 and $250,000 too big to be served by Micro-Enterprises Programs and to small to be considered by conventional and well-established Management Consulting Firms. These category of businesses needs package of services tailored to their specific needs. Based on data from the Census Bureau, Non-Employer Statistic combined with data from The US Department of Commerce, micro-enterprises, as described above comprise over 86% of all enterprises in the United States and contribute 16.6% of total non farm employment. At their early stage, Micro-Enterprises may be assisted by Community Development Corporation and Community Development Financial Institutions running Micro-Enterprise Programs. According to a recent study published by the Aspen Institute, an estimated 10 million micro-entrepreneurs could benefit from the financing and business development services that Micro-Enterprise Programs provide. A Non-Profit Organization named FIELD (Micro-Enterprises Fund for Innovation, Effectiveness, Learning and Dissemination) identified a list of 650 Micro-Enterprises Programs of these, 554 are Micro-Enterprises Development Programs and the remaining are Support Organizations offering funding, training and technical assistance. FIELD also estimates that the Micro-Enterprises Programs may serve on average 200 clients a year while those who cover more than one State or located in large urban markets may serve more than 1,000 clients a year. At the national level, Micro-Enterprise Development Programs rather serve minorities immigrants and women business owners. By 2000, the micro-enterprises development organizations reported that 70% of all their clients were women head of household with an income of $13,956. The core product of the micro-enterprises development programs has been the business-planning training course which guide emerging entrepreneurs to test the feasibility of a business idea and then create a plan for the business, considering the business plan as the fundamental and the cornerstone for business start-up, financing and growth. Micro-Enterprises Development Programs have supported a set of micro-entrepreneurs whose business becomes very successful, moving beyond micro-business to small business and generating significant revenue and employment. The average annual revenue of this category of businesses range from $100,000 to $250,000, leaving a household income for the owner between $50,000 and $75,000. A study conducted by the Self Employment Learning Project (SELP) of the Aspen Institute showed 49 percent of micro businesses survive after five years, with average revenues increasing 27% percent and profits doubling in that period. Nearly three-fourth of the micro-entrepreneurs increased their household income over five years, and more than half (53%) of poor entrepreneurs moved over the poverty line. As soon as small businesses reaches a sale volume between $100,000 and $250,000, they become too big for Micro-Enterprises Programs and too small for most of the well-established management consulting firms. But experience has demonstrated that, to continue the growth process, this set of successful micro-entrepreneurs scaled up to small business from micro-businesses should benefit at a later stage from advanced consulting services focused on Marketing Plan, Organization for Management, Profit & Expense Control, Office Procedures, Management Control Accounting, Compensation Plan and Quality Control System.In order to tailor and design a program of consulting services to continue improving the niche market of these successful micro-entrepreneurs, Small Business Management Consultants need to know who they are and how many clients are they and what level of consulting cost they can support. The rate of success could include indicators like: changes in business revenue and household income and rates of job creation. In these changing economic conditions where people are losing jobs, the development of these businesses upgraded from micro-enterprises to small businesses could be seen as an option to limited employment. The small businesses can generate benefits on both individual, familial and community levels. Economic and corporate restructuring create new market opportunities that can be fill by survival small businesses scaled up from micro-enterprises, particularly in construction and other field in the service sector. These small scale entrepreneurs are in most cases animated with a strong work ethic and an entrepreneurial spirit. They occupy more and more commercial spaces on the Main Street of many cities and they represent a key source for the dynamism of the American Economy. If they overcome their limitations and bottlenecks to pursue their growth process, this group of upgraded small businesses will emerge as an important strategy in the effort to improve the economic well-being of families in the United States and raise income by a minimum of 25% over a three years period. |