Sustainable and effective management of small businesses plays an essential role in overcoming the consequences of the global economic crisis. The dynamic development of small businesses has a positive impact on the country’s economy and the material well-being of citizens.
Entrepreneurship is an essential element in the structure of the modern market economy. Under this concept implies self-employment, which is carried out to obtain a regular income, endangering their assets.
Business entities must be officially registered with state authorities. Outdoor activities may carry out in goods, services, or works and are not prohibited by law.
They are moving to the free market model for an economic system analysis, where a monopoly on assets belongs only to the state. Such an approach limit opportunities for the development of creativity and initiative. Therefore, one of the essential conditions of business life support is private property.
And such vital conditions as those necessary to maintain a healthy market economy, as a favorable tax climate, stable economy, and fair social policy. An important role also played by operating the intellectual property protection system and flexible market mechanisms.
Business signs are:
- Independence and autonomy of economic entities. Whether being an entrepreneur or occupying a leadership position in an organization addresses all the operational issues, the solution of which depends on the business’s profitability.
- Personal interest and responsibility. The business features are similar to those previously listed, except that in addition to the desire for self-interest, the entrepreneur considers the interests of the collective, company, and sometimes the entire country in the event. This is a global cool drawing business.
- Creativity, innovation, and the original supply of products are also the main features of entrepreneurship. This entrepreneur is always on a creative search. Striving to be first and best in its niche causes it to be one step ahead of competing firms. Welcome personality traits such as the ability to make unusual decisions, respond quickly to the situation, and benefit, where others do not see it.
- This is important as the signs of entrepreneurship, both financial and economic risks also. They force to maintain momentum and pace, eliminating the possibility of stagnation against a background of constantly hovering the spirit of competition. A newly formed business must be precisely new, duly different from the competition.
- The principle of being legal and doing business without registration in the prescribed manner is prohibited by law. In addition, there are areas where activities must be accompanied by mandatory licensing.
The concept of “entrepreneur” appeared in the XVIII century, and today it is an essential and fundamental market unit. On the scale, private enterprises are divided into small, medium, and large.
One of the leading indicators, which is the basis of differentiation in small or medium-sized enterprises, is the number of employees following a domestic and international practice. The second criterion accepts the value of the authorized capital, assets, and turnover volume.
By law, the main feature of small businesses – is the average number of employees, which depends on the selected activity during the reporting period, annual turnover, and the number of assets. At the equal time, the average number of employees should not exceed:
- for industrial subjects – 100 people;
- Agriculture – 60 people;
- for wholesale trade – 50 people;
- retail trade – 30 people;
- for other species – 50 people.
The subject of small entrepreneurship understand as the activity of individuals without legal personality. Under the subjects that use the simplified tax, the organization has a maximum of 15 people.
SMALL BUSINESS BENEFITS
Organizations with minor business signs have the following advantages of doing the chosen task:
- The ability to quickly adapt to create local economic conditions.
- Efficiency and independence, as well as flexibility in the adoption and implementation of decisions.
- Smaller costs for organization and conduct of business, as well as initial capital.
- The ability to respond quickly to changes in market demand and market conditions.
DISADVANTAGES SMALL BUSINESS
However, economic activity has some disadvantages that may arise due to external or internal reasons:
- A high level of market volatility is a high level of risk.
- Admitted mismanagement cause by the lack of experience or ability of a poor leader.
- Relying on larger companies, banks, and the state as a whole.
- Embarrassing to find extra resources to support financial institutions, which prefer to lend to big businesses.
- Difficulty and caution in concluding agreements on cooperation with partners.
Small organizations that have signs of business have the right to rely on support from the government, which is to apply the following measures:
- We are creating a legal framework to support small and medium-sized businesses.
- The possibility of concessional credit to use state funds, material and technical resources, information, and scientific and technical resources.
- Elimination of bureaucratic approach to registration, licensing, and certification for organizations with enterprise features and simplifying the supply of accounting and statistical reports.
- Support the implementation of foreign economic activity.
- Support for education, retraining, and raising the level of professionalism
The successful functioning of businesses and organizations, with the features of a small business sector, can lead to the formation and maintenance of middle-class populations of power, which, in turn, will lead to a higher socioeconomic level of development of the country.