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Many, probably MOST "small businesses" in the US are fake. The people tend to think of mom-and-pop stores and whatnot when they hear the term "small business" but in reality the vast majority are shell games designed as tax shelters, individuals incorporating themselves or their house, etc.

Show me some numbers.

That number of 294,621 French "business creations" (233,000 if you only count "new" business creations) was bothering me: it seemed like quite a lot of new businesses for one year, so I looked it up.

And sure enough, at least based on my reading of this definition, suggests that "probably MOST" of these "businesses" are tiny as well, maybe 1-person outfits.  Wikipedia seems to confirm this:

... in France, 95% of the country's 3 million businesses are microenterprises with 0 to 3 collaborators.

Are you so sure that French people are immune from using these "businesses" as shell games for delinquent antics?  If I happened to have some anecdotal evidence about a few French people who did so, would I be in my rights as well to assert that "probably MOST small businesses" in the U.S. are fake?

Also, see wchurchill's point below.

Truth unfolds in time through a communal process.

by marco on Sun May 6th, 2007 at 11:02:59 PM EST
[ Parent ]
  ... in France, 95% of the country's 3 million businesses are microenterprises with 0 to 3 collaborators.

There is an immense and growing number of "micro-businesses" throughout the developed world and it is a direct consequence of the technology- driven centralisation and consolidation we know as "Globalisation".

These micro-businesses consist not only of many of the "costs" (aka human beings) who have been "cut" but also arise from the bleeding and "hollowing out" from the big corporates of all the people who have had enough, made enough and want to give back to Society in some way. And so on.

I know, because I am a living example of it. I left the IPE 10 years ago determined never to work FOR anyone ever again, but rather to work WITH them.

And I now observe that it is a new Enterprise Model with French origins/antecedents that enables new ways for microbusinesses to come together and thrive.

The "Hanseatic Microfinance Initiative" is working on just such mechanisms, well documented on ET.

One or two politicians both here in Scotland and in Norway are just beginning to realise that good policies for microbusinesses are worth a lot of votes - and it's a number increasing daily.

It seems to me that "Open Capitalism" as I call it would be something that the French could use to refute the "Anglo-Saxon" model, once they were aware of it of course....


"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon May 7th, 2007 at 06:31:05 AM EST
[ Parent ]
I'm unhappy with the use of "micro-enterprises" here (this is not a reply to Chris Cook's post but bruno-ken's), because what Wikipedia means is very small businesses, while micro-entreprise means something quite specific in France: a very small one-person business which has a turnover below a certain threshold can opt to be considered a micro-entreprise and benefit from greatly simplified bureaucracy. But the threshold is low: about €27,000 for services and about €72,000 for commercial activities.

Using small businesses as a shell or tax shelter... That sounds unlikely to me in France because generally conditions and regulations are strict.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon May 7th, 2007 at 09:26:07 AM EST
[ Parent ]
You are right about micro-entreprise, as the Wikipedia entry for très petites entreprises clarifies.

(Interestingly, it mentions, as apparently a development for the future, that:

La Commission Européenne a pris une recommandation (6 mai 2003 - 2003/361/CE) pour notamment définir les micro entreprises (entreprises qui occupent moins de 10 personnes et dont le chiffre d'affaires annuel ou le total du bilan n'excède pas 2 millions d'euros) et les petites entreprises (entreprises qui occupent moins de 50 personnes et dont le chiffre d'affaires annuel ou le total du bilan n'excède pas 10 millions d'euros.
)

Using small businesses as a shell or tax shelter... That sounds unlikely to me in France because generally conditions and regulations are strict.

If there is one benefit of the strict regulations on businesses, it does make sense that it would be harder to play fast and loose with "fake companies" in France than in the U.S.  However, I would prefer to see hard numbers on that allegation against U.S. businesses, rather than go by someone's rather biased hunch.  The ease with which you can go into business for yourself in the U.S. is a great thing for genuine entrepreneurs, and I hate to see that being attacked on unsubstantiated grounds.

Truth unfolds in time through a communal process.

by marco on Mon May 7th, 2007 at 09:44:57 AM EST
[ Parent ]

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