Kitchen Capitalism

Microenterprise in Low-Income Households

Cynthia K. Sanders, Margaret Sherrard Sherraden, Michael Sherraden

Publication Year: 2004

Businesses come to life as owners are allowed to speak in their own words in this first in-depth examination of self-employment told from the perspectives of low-income microentrepreneurs. The book systematically analyzes a range of issues, including who chooses to open a micro business, and why; what resources do they bring to their business venture; how well will their venture fare; and what contributes to the growth or decline of their business. The authors conclude that most microentrepreneurs believe self-employment offers a range of monetary and nonmonetary benefits and argue it would be more advantageous to view microenterprise as a social and economic development strategy rather than simply as an anti-poverty strategy. Based on this observation, a range of strategies to better promote microenterprise programs among the poor is advanced, with the goal of targeting the most promising approaches.

Published by: State University of New York Press

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We thank many people for their help and encouragement as we conducted this study. Our deepest appreciation goes to the microentrepreneurs we interviewed for this study. They gave us their time and answered our questions with insight and patience and did their best to help us understand what it was like to be a microentrepreneur and we hope we have depicted their experiences accurately. ...

1. Little Businesses, Large Hopes

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pp. 1-20

Lessie was trained as a beautician and had been working in other people’s hair salons for many years. When she finally opened her own business, she had trouble managing it on a day-to-day basis. But she did make some profits, which she was able to reinvest in the business. Despite two family crises that set back her business, she believed that it had a promising future. ...

2. Theory and Evidence

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pp. 21-46

It is not immediately clear why someone would choose to become self-employed by opening a microbusiness. Operating a business takes considerable time and energy and failure rates are high. Nevertheless, a number of theories suggest why self-employment might be a desirable option for some people.Some theories emphasize “push” factors. That is, in the absence of quality, ...

3. Who Wants to Be a Microentrepreneur and Why?

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pp. 47-66

Many Americans, at one time or another, have thought about opening a business. Some are struck with an inspired business idea. Others face dead-end jobs, an insufferable boss, or an inflexible work environment. In the end, most decide that the great business idea is too risky, and the job, while not perfect, is a better bet than trying to run a business. ...

4. Getting Started: Resources for Microenterprise

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pp. 67-88

In the late 1990s, residents of Westminster, Maryland, rallied together for the “muffin lady” (Fisher, 1997; Shaver, 1997). Selling her homemade muffins for $1.25 apiece off of her Radio Flyer wagon to shops along her seven-mile route through the town’s streets, she earned about $400 a month. Along with subsidized housing and child support, she was able to sustain ...

5. The Bottom Line: Business and Household

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pp. 89-116

In this chapter we examine the entrepreneurs’ business and household income over a five-year period. Income is the typical measure of microenterprise success, but as we demonstrate, measurement presents a number of challenges. We also expand the discussion of financial position to include as-sets, liabilities, and net worth. Although often overlooked in anti-poverty ...

6. Microenterprise Performance

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pp. 117-154

In this chapter the entrepreneurs discuss factors they believed affected their business performance. To begin, we take a closer look at businesses that have done well and others that have done poorly. These cases illustrate the range of factors that influenced performance. ...

7. Beyond Profit: Multiple Outcomes of Microenterprise

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pp. 155-176

After several years of operating their small business, we asked the entrepreneurs if they preferred self-employment or a “good job.” Despite the challenges, hard work, and, in some cases, business failure, the majority of respondents (56 percent) said that they still had a definite preference for selfemployment, even if they could get a “good” job. ...

8. Fighting Poverty or Promoting Development?

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pp. 177-202

Is business ownership for low-income families a good idea? As we have seen, from the point of view of most of the entrepreneurs in this study, the answer is an enthusiastic “yes.” Most said that they preferred owning their own business to working in the labor market and believed that they and their families gained from the experience. Even after five years during which many had closed their...

Appendix A. Glossary

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pp. 203-206

Appendix B. Research Methods

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pp. 207-212

Appendix C. Entrepreneurs, Demographic Characteristics, and Their Businesses

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pp. 213-218

Appendix D. Business and Household Financial Outcomes

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pp. 219-244

References

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pp. 245-264

About the Authors

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pp. 265-266

Index

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pp. 267-276

E-ISBN-13: 9780791484661
Print-ISBN-13: 9780791461716
Print-ISBN-10: 0791461718

Page Count: 288
Illustrations: 31 tables
Publication Year: 2004

Series Title: SUNY series in Urban Public Policy
Series Editor Byline: C. Theodore Koebel