FEATURE
PAPER
Micro-Entrepreneurs:
From Rags to Riches?
The
following paper was presented at the 2007 Allied Academies
International Conference - Jacksonville. It was written
by Bella L. Galperin of the University of Tampa.
Abstract
The
concept of micro-credit or micro-loan, pioneered by the Grameen
Bank in Bangladesh,
typically involves credit of approximately $100 to economically
disadvantaged entrepreneurs--
typically women in developing countries. The micro-loan movement
has created a global network
of tens of millions of women entrepreneurs. Although micro-credit
has been in existence
approximately three decades, there has been little theoretical
work on micro-entrepreneurs. This
paper reviews the literature and poses a couple of questions
regarding the micro-entrepreneurship
literature. First, a brief history of the context of the microfinance
movement is discussed and
questions are then presented. Finally, possible directions
for future research are outlined.
Introduction
Souad
Sattari from Tunisia bought a simple sewing machine with
her first loan from ENDA
Inter Arabe. With Souad’s initiative and determination,
she now owns a workshop with 22 machines
and employs 8 permanent and 5 seasonal employees producing
women’s clothing. She is now able
to fulfill her dream and build a home for her family (The Rockdale
Foundation, 2007).
Delora
Begum’s home office in Bangladesh is a metal and
straw hut with a mud floor and
no toilet and water. Nevertheless, she is viewed as the “phone
lady”, a successful entrepreneur in
her community (Jordan, 1999).
Souad
and Delora are micro-entrepreneurs-- entrepreneurs who are
often ignored by
traditional financial institutions due to: (a) their
small business size, (b) their poverty situation, (c)
their usual lack of collateral, and, (d) their non-existent
credit history. These women were able to
obtain small loans or micro-loans from micro-credit institutions.
The
concept of micro-credit or micro-loan, pioneered by Grameen
Bank in Bangladesh,
typically involves credit of approximately $100 to
economically disadvantaged entrepreneurs--
typically women in developing countries. The micro-loan
movement has created a global network
of tens of millions of women entrepreneurs. While micro-credit
has been in existence approximately
thirty years, there is a lack of theoretical work on
micro-entrepreneurs. First, the majority of the
literature on micro-entrepreneurs appears in the popular
press. Second, studies on microfinance
focus on the organizational level of analysis as opposed
to the individual level. Finally, most
existing models and theories about women owned and
operated businesses are based on experiences
of women in developed countries, such as the United
States. This paper reviews the present literature
and poses a couple of questions regarding the micro-entrepreneurship
literature. First, a brief history
of the context of the microfinance movement is discussed
and questions are then presented based
on the micro-entrepreneurship literature. Finally,
possible directions for future research are outlined. Read
the Entire Paper...
.
TIP
OF THE WEEK
The
Loan or Investment Proposal
There is a difference between a working business
plan - the one the entrepreneur is using to guide the business
- and the presentation business plan - the one he or she is
using to attract capital. Although coffee rings and penciled-in
changes in a working plan don't matter (in fact, they're a
good sign that the entrepreneur is actually using the plan),
they have no place on a plan going to someone outside the company.
A plan is usually the tool that an entrepreneur uses to make
a first impression on potential lenders and investors. To make
sure that impression is a favorable one, an entrepreneur should
follow these tips:
• Realize that
first impressions are crucial. Make sure the plan has an attractive (not
necessarily expensive) cover.
•
Make sure the plan is free of spelling a grammatical errors
and "typos." It is a professional document and should look
like one.
•
Make it visually appealing. Use color charts, figures, and
diagrams to illustrate key points. Don't get carried away, however, and
end up with a "comic book" plan.
• Include a table of contents with page numbers to allow readers
to navigate the plan easily. Reviewers should be able to
look through a plan and quickly locate the sections they want to see.
• Make it interesting. Boring plans are seldom read.
• A plan must prove that the business will make money. In one
survey of lenders, investors, and financial advisors, 81
percent sad that, first and foremost, a plan should prove that a venture will
earn a profit.
Start-ups do not necessarily have to be profitable immediately,
but sooner or later (preferably sooner), they must make money.
•
Use computer spreadsheets to generate financial forecasts.
They allow entrepreneurs to perform valuable "what if" (sensitivity)
analysis in just seconds.
• Always include cash flow projects. Entrepreneurs sometimes
focus excessively on their proposed venture's profit forecasts
and ignore cash flow projections. Although profitability is important, lenders
and
investors are much more interested in cash flow because they
know that's where the money to pay them back or to cash them out comes from.
•
The ideal plan is "crisp," long enough to say what it should
but not so long that it is a chore to read.
• Tell the truth. Absolute honesty is always crucial when preparing
a business plan.
Thomas
W. Zimmerer and Norman M. Scarborough with Doug Wilson. Essentials
of Entrepreneurship and Small Business Management -
Fifth Edition.
2008. Thomson Southwestern. pg.147.
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CONFERENCES
ASBE
|
| Who: |
Association for
Small Business and Entrepreneurship
|
| What: |
2007
Conference
|
| Where: |
Austin,
Texas, USA |
| When: |
October
10-12,
2007 |
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Creativity
Seminars
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| Who: |
Creativity
Seminars
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| What: |
Creativity
Workshop - 2007 Educator Fellowships
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| Where: |
Florence,
Italy |
| When: |
July
13-22, 2007 |
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MMA
|
| Who: |
Marketing
Management Association
|
| What: |
MMA
Fall Educators Conference
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| Where: |
St.
Louis, Missouri, USA |
| When: |
September
26-28, 2007 |
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FFI
|
| Who: |
Family
Firm Institute
|
| What: |
Annual
Conference
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| Where: |
Fairmont
Turnberry Isle Resort & Spa
in North Miami Beach |
| When: |
October
17-20, 2007 |
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ATINER
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| Who: |
ATINER
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| What: |
International City Break Conference
on Business and Economic Research
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| Where: |
Athens,
Greece |
| When: |
October
19-21, 2007 |
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CALLS FOR PAPERS
SWAM
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| Who: |
Southwest
Academy of Management |
| What: |
2008 Annual Meeting and 50th Reunion
Southwest Acadmeny of Management
|
| Where: |
Hyatt Regency - Houston, TX |
| When: |
March
4-8, 2008 |
Submission
Deadline:
September 17, 2007
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WUN
|
| Who: |
Worldwide
Universities Network
|
| What: |
Inspiring and Developing Enterprising
People:
Entrepreneurship and Global Impact Conference
|
| Where: |
Chicago,
Illinois, USA |
| When: |
October
4-6, 2007 |
Submission
Deadline:
July 15, 2007
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USASBE
|
| Who: |
United
States Association for Small Business and Entrepreneurship
|
| What: |
USASBE
2008 Annual Conference
|
| Where: |
The
Westin La Cantera Resort - San Antonio, Texas |
| When: |
January
10-13, 2008 |
Submission
Deadline:
August 15, 2007
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SBI
|
| Who: |
Small
Business Institute
|
| What: |
2008 SBI Conference
|
| Where: |
Handlery
Hotel – San Diego, CA |
| When: |
Feb.
14-16, 2008 |
Submission
Deadline:
October 1, 2007
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