Individual Micro-Entrepreneurs: A Discussion on Financial Management and Business Expectations

Abstract

In this quantitative study, we sought to identify the association between declared conceptual knowledge and the use of financial control tools by managers of individual micro-enterprises in Nineveh, Iraq. Archival data and documentary sources were used to collect information and evidence, as well as surveys conducted through field research. The sample comprised 120 micro-entrepreneurs drawn from the Central Statistical Organization (CSO) of the Ministry of Planning in Iraq, to whom a questionnaire was administered to trace not only the sociodemographic profile but also the business profile and knowledge and use of financial control instruments. The data, which was analyzed using Multiple Correspondence Analysis, revealed a link between schooling and knowledge of financial management instruments and the use of financial controls, with MEI having completed higher education demonstrating “high knowledge” and frequency of “daily use.” Microentrepreneurs with primary education tended to have medium knowledge and did not use controls. Although the “illiterate” category results are inconclusive, there is a strong association between "low knowledge" and any situation characterized by the "use of control instruments." Concerning the reasons for formalization, the decision to establish the business was characterized by opportunity and necessity, with entrepreneurship as an opportunity to obtain financial benefits and the possibility of avoiding problems with inspection dominating. Unemployed people and homemakers were found to be motivated by entrepreneurship out of necessity. High knowledge and frequent use of inventory controls, accounts payable and accounts receivable were strongly associated with entrepreneurship by opportunity.