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The following "Fast Facts" help paint a broad picture of microenterprise in the U.S. The source for each fact is cited with, in most cases, a direct hyperlink to the full on-line reference. These facts, designed for researchers and others looking for basic information about entrepreneurship, microenterprise and assistance-providing organizations, have been organized around several themes:
- Fast Facts About Microentrepreneurs
- Fast Facts About Business Ownership
- Fast Facts About Programs Assisting Microentrepreneurs
- Fast
Facts About Training and Technical Assistance
Fast Facts About Microentrepreneurs:
• There are 20 million microenterprises in the United States; an estimated 10 million individuals fit the characteristics of the target groups the microenterprise industry seeks to serve: such as women, minorities, low-income individuals, individuals with disabilities, and those with difficulty accessing commercial credit markets. Source: Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States.
• A survey of microenterprise programs found that a majority of the microentrepreneurs they serve are female (65 percent) and minority (55 percent), and that a majority are also low-income at the time they enter the microenterprise program (59 percent had incomes at or below 80 percent of area median income). Source: Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States.
• Surveys find that microenterprise program clients reduce their reliance on poverty:
• In one study, program-administered surveys of 813 clients found that 24 percent entered the microenterprise program in poverty. At the time of the survey, there was a 36 percent net increase of clients who had incomes above the poverty line. Source: Monitoring Client Outcomes: A Report from MicroTest’s 2004 Data Collection
• A study of microenterprise programs working with welfare recipients found that two years after intake, TANF receipt was reported at 25 percent, down from 94 percent at intake. Source: Microenterprise as a Welfare to Work Strategy: Two-Year Findings
• A five-year study found that the poor entrepreneurs (those with household incomes less than 150 percent of the poverty line) reduced their reliance on government assistance on average by 61 percent. Source: Microenterprise and the Poor
• Surveys also find that household income increases:
• Client outcomes surveys found average household income increased by 19 percent, from $32,743 to $38,859, after joining the microenterprise program. The median length of time between when clients first entered the program and the time they were surveyed was 2.05 years. Source: Monitoring Client Outcomes: A Report from MicroTest’s 2004 Data Collection
• Welfare recipients studied also showed strong increases in household income, with median household income increasing 87 percent, from $10,114 to $18,952, two years after enrolling in a microenterprise program. Source: Microenterprise as a Welfare to Work Strategy: Two-Year Findings
• Only 50 percent of the low-income entrepreneurs surveyed in one study had health insurance. Source: Microenterprise and the Poor
Fast Facts About Business Ownership:• Eighty percent of the microentrepreneurs surveyed in one study were operating a business at least one year after receiving services from the microenterprise program. Some of these entrepreneurs were in business when they came to the program; others came hoping to start a business. Source: Monitoring Client Outcomes: A Report from MicroTest’s 2004 Data Collection
• A study of welfare recipients who received microenterprise assistance found they had a two-year business survival rate of 68%. Source: Microenterprise as a Welfare to Work Strategy: Two-Year Findings. Similarly, in a longitudinal study of low-income entrepreneurs, the five-year survival rate of microbusinesses was 49 percent — comparable to the survival rate for businesses with similar characteristics and owners. Source: Microenterprise and the Poor
• In a recent study of microenterprise program clients, entrepreneurs who came into the programs with a business experienced a median growth in business revenues of 26 percent. Their average sales grew by 59 percent, suggesting some relatively large gains among a few businesses. Source: Monitoring Client Outcomes: A Report from MicroTest’s 2004 Data Collection
• Today there are more than 500 programs across the United States helping aspiring entrepreneurs grow their businesses. More than 94 percent of these emerging business owners seek training and/or technical assistance designed to help them achieve success. Source: Highlights from the 2005 Data Collection Project
• Microenterprise development programs in the U.S. served an estimated 150,000 to 170,000 individuals in 2000. Source: Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States
• In 2003, the 63 programs reporting data to FIELD’s MicroTest project had a median cost per client of $1,750. These costs are relatively modest and in line with other job creation strategies. The business outcomes associated with participation in microenterprise services exceed the cost of providing them and compare favorably to the costs of outcomes associated with other workforce development strategies. Source: Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States
• In 2003, a group of 45 microenterprise programs that make loans to their clients reported a median loan loss rate of 7 percent. The 43 of these programs that reported cost data spent a median of 42 cents that year to make and manage each dollar in their loan portfolio. Source: Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States
Fast Facts About Training and Technical Assistance:
• Substantial numbers of low-income individuals start, stabilize and expand their businesses within 18 months of completing training. At four programs studied by Aspen, ownership increased by an average of 49 percent among those who entered training prior to business start-up. Source: Improving Microenterprise Training and Technical Assistance: Findings for Program Managers
• Effective programs know that readiness for business matters. Aspen-sponsored research has found that business ownership and/or exposure to business ownership is clearly associated with completing training and having a business after training. So are having relevant work experience, and extensive personal support systems. Strong programs offer a range of services to help clients assess their capacity and acquire the resources and experience needed. Source: Improving Microenterprise Training and Technical Assistance: Findings for Program Managers
• Financial skills matter. In one program studied by Aspen, the clients who achieved economic self-sufficiency during an 18-month period were much more likely to report using key financial skills — such as cash-flow projections and management, break-even analysis and pricing — than other clients. Source: Improving Microenterprise Training and Technical Assistance: Findings for Program Managers
• Training style also matters. In another program, clients with dynamic trainers using adult learning techniques were 20 percent more likely to complete training, 32 percent more likely to complete a business plan and 5 percent more likely to have an open business within eight months of training completion. Source: Improving Microenterprise Training and Technical Assistance: Findings for Program Managers
• Completing training, and other markers of participation and achievement — such as completing a business plan, completing class assignments and having high attendance — are all associated with having a business, and/or experiencing business growth after training. Source: Improving Microenterprise Training and Technical Assistance: Findings for Program Managers
