Concept and features of entrepreneurship

The sustainable and efficient management of small enterprises plays a special role on the way to overcoming the consequences of the global economic crisis. The dynamic development of small business positively affects both the development of the country's economy as a whole and the material well-being of citizens.

Entrepreneurship is an important element in the structure of a modern market economy. This term implies an independent activity, which is carried out with the aim of obtaining a regular profit, at the same time risking its own assets.

A business entity must be officially registered with state bodies. Activities can be carried out in such areas as the sale of goods, the provision of services or the performance of works not prohibited by law.

Conditions for entrepreneurship

The transition to a model of free market relations required a review of the economic system in which the monopoly of property belonged to the state alone. With this approach, opportunities for the development of creativity and initiative were hampered. Therefore, private property is one of the important conditions for the life support of entrepreneurship.

To maintain healthy market relations, it is also necessary to have such important conditions as a favorable tax climate, stability of the economy, loyal social policy. An important role is also played by working intellectual property protection systems and flexible market mechanisms.

General features

Signs of entrepreneurship are:

1. Independence and independence of an economic entity. A person, becoming an entrepreneur or holding a managerial position in the organization, independently deals with the resolution of all production issues, from the decision of which the profitability of the business will depend.
2. Personal interest and responsibility. These signs of entrepreneurship are similar to those listed above, with the difference that in addition to seeking personal gain, the entrepreneur takes into account the interests of the collective, the firm, and sometimes the country as a whole, if it is a global business.
3. Creative approach, innovation, original product delivery are also the main signs of entrepreneurship. A true businessman is always in creative search. The desire to be first and best in its niche makes it one step ahead of competing firms. Personal qualities such as the ability to make non-standard decisions, respond quickly to the current situation, be able to benefit from those where others will not see it are welcomed.
4. Significant are such signs of entrepreneurship, as financial and business risks. It is they that make us maintain the dynamics and pace, exclude possible stagnation against the backdrop of the ever-evolving spirit of rivalry. The newly formed business should be the new, qualitatively different from the competitors.
5. The principle of legalized activity. Doing business without registration in accordance with the established procedure is prohibited by law. In addition, there are such areas, the activities of which must necessarily be accompanied by licensing.

Private business

The concept of "entrepreneur" appeared in the XVIII century, and today it is an integral and fundamental unit of the market. The scale of private business is divided into small, medium and large.

In accordance with domestic and world practice, one of the main indicators that is taken as the basis for the delineation in the category of small or medium-sized businesses is the number of employees. The secondary criteria include the value of the authorized capital, the size of assets, the volume of turnover.

Small business

According to the legislation, the main signs of small business are the average number of employees, which directly depends on the chosen activity for the reporting period, the annual turnover, and also the assets. At the same time, the average number of employees should not exceed:

• For industrial entities - 100 people;
• For agriculture - 60 people;
• For wholesale trade - 50 people;
• For retail trade - 30 people;
• For other species - 50 people.

Under the subjects of small business it is customary to understand the activities of individuals without the formation of a legal entity. Under the entities that enjoy simplified taxation, organizations with a maximum number of up to 15 people are implied.

Advantages of small business

Organizations that have the characteristics of small businesses have the following advantages of running the chosen type of activity:

1. The ability to quickly adapt to the created local conditions of management.
2. Efficiency and independence, as well as flexibility in making and implementing decisions.
3. Small costs for organizing and running a business, as well as for initial capital.
4. The ability to respond quickly to changes in market demand and market conditions.

Disadvantages of small business

At the same time, entrepreneurial activity has a number of shortcomings that can arise under the influence of external or internal causes:

1. A high degree of volatility in the market causes a higher level of risk.
2. Errors in management, caused by a lack of experience or weak competence of the manager, are allowed.
3. Dependence on larger companies, banks, the state as a whole.
4. An embarrassing finding of ancillary borrowing resources in financial institutions that prefer to lend to big business.
5. Difficulties and cautiousness in concluding agreements for mutual cooperation with counterparties.

Governmental support

Small organizations that have signs of business entities have the right to rely on the support of the state, which consists in the application of the following measures:

• Creation of legislative base for support of small and medium business.
• Possibility to use state credit facilities, material and technical base, information and scientific and technical resources on preferential terms.
• Elimination of the bureaucratic approach to registration, licensing and certification for organizations with business characteristics, as well as simplifying the submission of accounting and statistical reports.
• Support in the implementation of foreign economic activities.
• Support in the field of education, retraining and raising the level of professionalism

Successful functioning of enterprises and organizations, which are characterized by signs of small business, can lead to the formation and maintenance of the middle class of the population of the state, which, in turn, leads to an increase in the socioeconomic level of the country's development.