Introduction
2.1 Benefits of small business
2.2 Disadvantages of small business
3. The role of small business
4. Problems of small business
Conclusion
List of used literature
Introduction
Small business in a market economy is the leading sector that determines the rate of economic growth, structure and quality of the gross national product. In many developed countries, small businesses account for 60-70% of GNP. But it's not just about quantitative indicators. This sector is inherently typical market and forms the basis of modern market infrastructure, because it primarily ensures a competitive environment for the economy.
Unfortunately, in Russia small business is at the initial stage of development. Despite the measures taken by the government to support small businesses, their activities are limited by a number of problems. Quantitative indicators are several times lower than the corresponding indicators of developed countries.
The purpose of the work is to understand what stands in the way of small business development, i.e. analysis of its problems and development prospects.
In accordance with the goal, it is necessary to solve a number of problems:
Define small business
Reveal its features
Determine the place of small business in the economy
Consider its evolution
Classify small business problems
Think through possible ways to solve these problems
It can be assumed that one of the factors in our country’s recovery from the crisis and building a market economy is the development and normal functioning of small businesses, which implies the relevance of this topic.
1. The concept of small business
The main factor in classifying an enterprise as small is the average composition of employees, but sometimes additional factors are used, such as sales volume, value of assets, etc. Legislatively in Russia, small businesses are defined by Federal Law of June 14, 1995 N 88-FZ “On State Support small business in the Russian Federation". The direction of the law is the implementation of the right of citizens to use their abilities and property to carry out entrepreneurial and other economic activities not prohibited by law.
According to the law, small business entities are understood as commercial organizations in the authorized capital of which the share of participation of the Russian Federation, constituent entities of the Russian Federation, public and religious organizations (associations), charitable and other foundations does not exceed 25 percent, the share owned by one or more legal entities does not being small businesses, does not exceed 25 percent and in which the average number of employees for the reporting period does not exceed the following maximum levels (small enterprises):
in industry - 100 people;
in construction - 100 people;
on transport - 100 people;
in agriculture - 60 people;
in the scientific and technical field - 60 people;
in wholesale trade - 50 people;
in retail trade and consumer services - 30 people;
in other industries and when carrying out other types of activities - 50 people.
Small businesses also mean individuals engaged in entrepreneurial activities without forming a legal entity. Small enterprises carrying out several types of activities (multi-industry) are classified as such according to the criteria of the type of activity whose share is the largest in the annual turnover or annual profit. The average number of employees of a small enterprise for the reporting period is determined taking into account all its employees, including those working under civil contracts and part-time, taking into account the actual time worked, as well as employees of representative offices, branches and other separate divisions of the specified legal entity.
The organizational and legal form of a small enterprise is established in accordance with the Civil Code, as well as the laws “On Joint-Stock Companies” and “On Limited Liability Companies”. They can exist in the form of individual (family) private enterprises, partnerships, joint-stock companies, production cooperatives, state (municipal) enterprises.
2. Economic characteristics of small businesses
Let's consider the main advantages and disadvantages of small businesses compared to large ones, and evaluate their role in the economy.
2.1 Benefits of small business
1. Relatively lower management costs due to the absence of unnecessary bureaucratic apparatus and, accordingly, high flexibility and efficiency of decisions in the management of small enterprises, which increases labor productivity (especially in micro-enterprises where the number of employees is less than 10 people). These conditions make it possible to quickly and flexibly respond to market changes, including by maneuvering capital when switching from one type of activity to another.
2. According to some scientists, large sizes increase the degree of formalization of the organization and reduce the ability to make organizational changes, therefore small enterprises are more flexible and efficient in making and implementing decisions and adapt more quickly to changing conditions.
3. Lower capital requirements and ability to quickly introduce changes in products and production in response to local market demands
4. Small businesses know better the level of demand in local markets. The orientation of producers primarily towards the regional market is ideally suited for studying the wishes, preferences, customs, habits and other characteristics of the local market.
5. Relatively higher capital turnover of small enterprises.
6. Small businesses require less capital investment. They have shorter construction times, are small in size, it is faster and cheaper for them to re-equip, introduce new technology and production automation, and achieve the optimal combination of machine and manual labor.
7. Small business employees have a high level of motivation to achieve success, as well as the opportunity to realize their ideas and demonstrate their abilities.
8. Small businesses provide livelihoods to more people than large ones. It has significant potential in the field of employment of the population, involving labor reserves in production, which cannot be used in large-scale production due to its technological and other features. These are pensioners, students, housewives, disabled people, as well as people who want to work after regular working hours in order to receive additional legal income.
2.2 Disadvantages of small business
1. Compared to large enterprises, small enterprises have a higher level of risk, and, consequently, a high degree of instability in the market.
2. Small businesses are dependent on large companies.
3. Weak competence of managers and less professional workers.
4. Increased sensitivity to changes in business conditions.
5. Small businesses face great difficulties in attracting additional funds and obtaining loans.
6. SEs do not have market power and a good resource base
7. Despite increased flexibility, small businesses' ability to change is limited.
8. Small businesses have little propensity for investment activities due to insufficient capital and long-term returns on investments.
From the above characteristics we can conclude that small enterprises have significant competitive advantages and are capable of more efficient operations than large enterprises in some areas of activity.
What can an effectively functioning small business give to the country's economy?
Small business can give the economy:
Necessary market saturation and mobility;
The trend towards price stability, increasing product quality due to price and non-price competition;
Accelerating the process of introducing new technologies;
An environment of competition that large monopolistic giants lack so much;
Deep specialization and cooperation;
The environment and spirit of entrepreneurship, without which a market economy is impossible.
Small businesses, quickly responding to changes in market conditions, give the market economy the necessary flexibility. That is, small business creates such economic conditions without which high market efficiency is unthinkable. Finally, the creation of this sector of the economy is a positive alternative to underground business, eliminating its monopoly position in the market by improving the legal conditions for the activities of legally operating small enterprises. It is obvious that any country needs developed small business, so it is necessary to give freedom for the development of small businesses. For a country of the size of Russia, small business cannot become the basis of the economy; in our conditions, it can only become a connecting link that would ensure the uninterrupted operation of large industrial enterprises. But, nevertheless, in the conditions of transition from an administrative command economy to a normal market economy, the formation and development of small businesses is one of the main problems of economic policy. The formation of a competitive environment, facilitated by small businesses, is of paramount importance for our highly monopolized economy.
Rabtsevich Andrey Alexandrovich
Assistant, Department of Sociology of Labor and Economics of Entrepreneurship, Bashkir State University, Ufa, Russian Federation
Abstract: The article is devoted to the study of the problems of small and medium-sized businesses in the Russian Federation. A definition of entrepreneurship is given, its essence and value as an economic phenomenon is considered. The main part is devoted to the problems existing in small and medium-sized businesses, and some recommendations for solving them are also given.
Key words: small and medium businesses, taxes, corruption, administrative barriers
The problems of small and medium-sized businesses in Russia
Pestova Regina Georgievna
Institute of Economics, Finance and Business, Bashkir State University Ufa, Russia
Rabtsevich Andrey Aleksandrovich
Assistant of the Department of Sociology of Labor and Business Economics Bashkir State University, Ufa , Russian Federation
Abstract: The article investigates the problems of small and medium business in the Russian Federation. The essence and value of entrepreneurship as an economic phenomenon considered. The main part of the article focuses on the issues of the small and medium business, some recommendations for their solution also described.
Keywords: small and medium businesses, taxes, corruption, administrative barriers
According to the Civil Code of the Russian Federation, entrepreneurship is defined as “independent activity carried out at one’s own risk, aimed at systematically obtaining profit from the use of property, sale of goods, performance of work or provision of services by persons registered in this capacity in the manner prescribed by law.” In this definition we see specific features that characterize an entrepreneur, entrepreneurship. Entrepreneurship is aimed at making a profit, but this activity is associated with certain risks. Entrepreneurs are mostly innovators, proactive and proactive people. This is a kind of innovation in social production. “Innovations are included in the process of social production through the labor activity of workers with a qualitatively new use value of labor power.” Entrepreneurship is capable of solving many problems: production of goods, services, introduction of new technologies, “production” of jobs, social activity.
Entrepreneurship is usually divided into large, medium and small businesses. The criteria for classification as a particular species are determined by Federal Law No. 209 dated July 24, 2007 and Government Decree of the Russian Federation dated February 9, 2013 No. 101.
The criteria also include the share of participation of other persons in the authorized capital of the organization.
“According to statistical observations in Russia, the overwhelming majority of the market is occupied by micro-enterprises (85.9%). The revenue of micro-enterprises accounts for 43% of the entire SME sector."
In this article we will look at small and medium-sized businesses, because... The contribution of small and medium-sized businesses to the economy of most countries is about 20-40% of GDP, and now it is the most actively developing, progressive part of the market economy. Also, entrepreneurship is now actively supported by the state, providing benefits, subsidies and other types of support. Despite all this, small and medium-sized businesses have accumulated enough problems that need to be solved.
Today, entrepreneurship is largely assessed by quantitative indicators, leaving out qualitative indicators. But it is a qualitative assessment that allows us to identify the connection between entrepreneurship and society. For example, entrepreneurship introduces new technologies, creates new products, resulting in:
Labor productivity increases;
Cheap high quality products are sold on the market
For a qualitative assessment, it is necessary to study such indicators as capital productivity, fixed assets renewal rates, the ratio of the cost of enterprise equipment, etc. It is also necessary to rely on labor productivity. To draw up a qualitative definition of a small enterprise, it is necessary to identify the main characteristic features of its activities and development. This approach is of great interest, since it considers a small enterprise not as a reduced model of a large enterprise, but as an enterprise that carries out its activities with the following specific features: a high degree of uncertainty; constant development and adaptation to new conditions; higher need for innovation.
The next problem: most small and medium-sized enterprises are enterprises engaged in trading and catering activities. It is necessary to increase the share of enterprises serving science and engaged in science. They are the ones who are able to bring a large amount of investment to the budget and this is the most promising area of entrepreneurial activity in the age of information, computer technologies and scientific and technological progress.
The next problem of small and medium-sized businesses is already inherent in the definition of entrepreneurship. Entrepreneurship always involves risks that cannot always be predicted. Due to the risk, enterprises cannot survive in the market and many of them cease to exist. But the more initial capital invested in an enterprise, the higher its chances of surviving the competition. The next big problem arises: lack of investment resources, unavailability of loans. When issuing loans, banks must be sure that the enterprise will be solvent; they need a well-thought-out business plan, which will largely depend on what knowledge the future entrepreneur has, how realistically he assesses his capabilities, etc. An entrepreneur must have a good credit history and “quality” collateral. Therefore, banks rarely lend to start-up businesses.
The next problem for small businesses: high taxes and fees. Depending on the type of taxation (traditional taxation system, simplified system), an entrepreneur pays from 6 to 15% of taxes. But there are also mandatory payments to various funds, for example, insurance premiums and business expenses. Therefore, entrepreneurs suffer large financial losses and it becomes unprofitable for them to do business. Let us take as an example a survey presented by Rosstat, where respondents consider high taxation to be the main problem (Fig. 1).
We see that the majority of respondents believe that taxes, corruption, administrative barriers, as well as the inaccessibility of loans are the main problems in the development of entrepreneurship in Russia.
Administrative barriers and corruption are one of the biggest problems hindering the development of small businesses. Administrative barriers should be understood as the presence of numerous by-laws, contradictions between different levels of legislation (federal and regional), a large volume of reporting, a large number of regulatory authorities, etc. We believe that it is necessary to make legislation more “transparent” and open; it is necessary to eliminate contradictions between the federal and regional levels of legislation; inspections carried out by various bodies need to be reduced and made more consistent; It is also necessary to provide entrepreneurs with all the necessary information regarding the requirements of regulatory authorities.
The face of any small enterprise is its leader. It is quite difficult to create a small business, and it is also difficult to manage it, because... it is necessary to solve problems at various levels. Therefore, many enterprises are faced with the problem of incompetent management. Incompetence can be expressed in a lack of knowledge in the field of marketing, finance, management, production, supply, lack of management experience or inability to solve non-standard problems. "Serious investments are needed in the development of human capital in Russia". Therefore, society needs to create a favorable environment for the “education” of a new type of people - people with an “entrepreneurial mindset”, creative, proactive, having the necessary knowledge and skills, adapting to changing conditions, leaders by nature, capable of accepting tasks of a different nature.
Thus, we can highlight the following problems that currently exist in small and medium-sized businesses:
Lack of quality business assessment indicators;
A small proportion of enterprises engaged in science or serving science;
Unavailability of loans;
High taxes;
Administrative barriers and corruption;
Lack of competent personnel.
Solving these problems will help small businesses develop more actively, which means that new goods (works, services) will be created, new jobs will be created, and the country’s economy will develop.
Bibliography:
1. Federal Law “On the Development of Small and Medium Enterprises in the Russian Federation” No. 209-FZ of July 24, 2007
2. Decree of the Government of the Russian Federation “On the maximum values of revenue from the sale of goods (works, services) for each category of small and medium-sized businesses” No. 101 dated February 9, 2013.
3. Vysotskaya O.A. On the criteria for classifying business entities as small and medium-sized businesses // Bulletin of the Samara Humanitarian Academy. Series "Law". - 2012. - No. 2(12). - p.94-96.
4. Rabtsevich A.A.. Innovative orientation of the labor market in the economic development of the region // News of the Irkutsk State Economic Academy. - 2014. - No. 4. - p.262-265.
5. Khasanova G.A., Rabtsevich A.A. Problems of human capital development in Russia // International scientific research journal. - 2013. - No. 5-2(12). - p.70-71.
6. Continuous federal statistical observation of the activities of small and medium-sized businesses in 2011 [Electronic resource] // Website of the Federal State Statistics Service. URL: gks.ru (accessed 10/12/2014)
7. Dunaeva A.I., Udachin N.O.. – 2014. – No. 3(03-2014) / [Electronic resource] – Access mode. – URL: http://site/3/1277/
2014 Pestova R.G., Rabtsevich A.A.
Small businesses - small companies and private entrepreneurs - face a number of problems that are typical only for this segment of the economy.
Since the small business sector is involved in creating new jobs, creating a healthy competitive environment, generating income for the state budget and fulfilling the needs of the regional market.
Current problems of small business
In 2017, the share of small businesses in Russia's GDP was less than 20%. While in the USA this figure is 53%, in Canada - 43%, in the UK - 40%. It follows from this that Russia does not have the most favorable conditions for individual entrepreneurs and companies where the number of employees does not exceed 100 people.
This situation is due to a number of problems:
- imperfection of the legislative framework (unprotected position of individual entrepreneurs, constant changes in economic and tax legislation);
- shortage of start-up and working capital (complicated subsidizing process, low percentage of approval of applications for small business loans by commercial banks);
- shortage of commercial premises (small number of proposals for renting production space coupled with its high cost);
- lack of access to federal and municipal orders (small businesses are unable to compete with large businesses);
- monopolization of certain segments of the domestic market;
- low level of income of the population (the target audience of small businesses - the population of the lower and middle class - is not able to pay for goods/services at a cost that covers the costs of the entrepreneur).
Despite the fact that federal programs for small business development are updated annually, entrepreneurs are skeptical about them. Most problems never find their solution.
Hidden problems
In addition to the obvious difficulties in the small business segment, there are several hidden problems that hinder its development. They can be classified as social. The most acute ones include the incompetence of entrepreneurs and the negative image of small businesses among the population.
In domestic universities, specialties in the basics of entrepreneurship appeared only in the early 2000s. Before this, novice businessmen, when organizing their business, were guided only by their entrepreneurial instinct. But even without talent, you can learn anything. Therefore, with the development of the educational base and the assistance of the authorities in solving key problems of entrepreneurship, we can count on an increase in the share of small businesses in the country’s GDP.
Due to the fact that during the Soviet era, entrepreneurial activity was called “speculation” and was subject to criminal liability, it acquired a bad reputation. Small business was strictly limited by the authorities, who dictated working conditions. And, despite the fact that the situation has changed in the post-Soviet period, there is still a stereotype among the older generation that entrepreneurs steal or profit from “ordinary people.” It is quite problematic to combat existing stereotypes, which necessitates the formation of a new positive image among the younger generation.
Creating additional jobs, developing competition, and, consequently, improving the quality of goods and services, growth and development of the national economy - small businesses are responsible for all this. The market cannot be entirely supplied only by large enterprises: there are industries that are completely unattractive to them.
Studying the problems of small business is a very important and urgent task. In Russia, unfortunately, there are quite a few problems relating to this sector of the economy. The purpose of the study is to show the main problems of small business in Russia, to look at the situation through the eyes of entrepreneurs who decided to open their own business in the existing conditions, and to consider possible solutions to emerging difficulties. Although Russian entrepreneurship is at a stage of constant development, it has not yet fully realized its potential.
Small business problems
What is the first thing a person who decides to open his own business will face?
To start your own business you need initial capital. As a rule, in the absence of their own funds, people go to the bank with the hope of getting a loan on favorable terms. In fact, getting it is not so easy. Banks in most cases are afraid to issue loans to start-up entrepreneurs: government support for small businesses is insignificant, collateral is small, and the business plan seems poorly prepared. If you manage to get a loan, then the high interest rate makes the entrepreneur constantly feel indebted to the bank.
Conclusion: lack of financing for small businesses from banks.
Below is a table with the conditions for issuing loans to small businesses by some Russian banks.
Table 1. Issuance of loans to small businesses by some Russian banks
Continuation of Table 1
The second problem that greatly limits the opportunities of entrepreneurs is taxes. Despite the fact that in addition to the single tax on imputed income and the single agricultural tax, the taxpayer is now given the opportunity to switch to a simplified taxation system (STS), the life of an entrepreneur does not become significantly easier. Although the enterprise is exempt from a number of taxes such as VAT, income tax and property tax, it is replaced by other significant restrictions: the inability to engage in certain types of activities, quantitative restrictions on employees, and conditions such as a ban on opening branches and representative offices greatly limit prospects business expansion.
In 2013, over the past period, 350 thousand entrepreneurs engaged in small businesses abandoned this type of activity.
Small business greatly influences the country's economic growth and GNP. In all developed countries, small business is highly valued, its share in GNP is 60-70% (see Table 2). A factor that helps the development of small businesses is the correct tax policy of the state.
Table 2. Small businesses in different countries
However, the expense item for entrepreneurs is not limited to taxation alone. The next item, one way or another, will be the rental fee, the amount of which is not limited by law. Nobody prohibits landlords from constantly raising rent for premises. In Moscow, these numbers reach such values that the chances of an entrepreneur starting from scratch opening his own business in the capital are extremely small. This implies the fact that in large cities such as Moscow, only vertically integrated structures can afford to own a retail outlet. Large retail chains that can pay such rent open stores in shopping centers where most of the population goes. Small businesses remain on the sidelines.
What do those entrepreneurs face who try to defend their rights in problematic situations?
There is no uniform legislation that entrepreneurs can apply to. Although there are separate documents and regulations on doing business, the country does not have a unified legal framework; moreover, some regulations contradict each other.
From this we can conclude that Russian entrepreneurship lacks real protection and support from the state. In this regard, we can name another equally important problem - there is no development in the innovation sphere. The introduction of innovations into production requires large capital investments. Small businesses do not have enough funds for such investments; government funding is required.
Another aspect that negatively affects small businesses is the acute shortage of qualified personnel, which is increasing every year. This problem cannot be solved quickly by any laws. It will take a lot of time to train people, improve the qualifications of staff, and prepare specialists in their field. Those specialists in our country who were highly qualified mainly work abroad for foreign companies.
Another problem affecting small businesses is the low solvency of the population, which affects sales volumes.
Some entrepreneurs at the beginning of their activities are faced with another difficulty - registering their business.
On average, if you look across Russia, registering a business requires about nine operations, which take approximately 23 days (depending on local legislation). Exact data for 30 cities of the Russian Federation are presented in Table 3 (Source: Doing Business database). The average cost of starting a business in Russia is 2.3% of income per capita. It will change within 1.7% of per capita income in Kazan, up to 3% in Khabarovsk and Surgut.
In 2001, it became possible to register a business online in four cities - Moscow, St. Petersburg, Orenburg and Tula. In fact, many others
This procedure was also available to cities. However, only in St. Petersburg were expectations met, and registration took 6 days, while in other cities the deadlines were exceeded.
Table 3. Assessment of the ease of starting a business in 30 Russian cities
Testing in practice
In order to understand which of all the above has the most painful impact on entrepreneurial activity, it is best to ask the entrepreneurs themselves about it.
The tavern manager agreed to answer my questions:
- Tell me, what problem of small business would you put at the forefront?
- The priority problem, which I would highlight in a separate category, is rent.
We rent this premises from the Moscow City Property Department, and I characterize the current situation as chaos. Laws of the Moscow government are being issued, which are the main documents for the Property Department, on the basis of which, on behalf of the city, the Department manages this property, rents it out to small, medium and sometimes even large businesses. So the policy of the Property Department is that they increase the rental rate every year, and by incredible steps. It’s already January 2014, and I still don’t have the cost of rent for this year, information about which I should have been provided with before December 1 of last year, and I don’t know what amount of rent awaits me. I cannot apply any sanctions to the property department, only they can apply sanctions to me, but I cannot.
- What if we go to court?
- I sued the property department four times. Four times in separate cases. For example, here is how we resolve judicial issues. I have several objects, since each object has its own legal entity, the cases are different, but the essence of the dispute is the same. So this is how it ended: although I had three different cases, all of which had the same essence, I won two of them and lost the third. Accordingly, each time the cases were considered by different judges. The law, as our people say, is that the drawbar: wherever you turn, that’s where it goes. Therefore, there is a certain bias in this regard.
The Moscow government issues a decree, which, in my opinion, quite clearly spells out the conditions. However, the Property Department has its own way and sets its own interest rate.
Many ordinary people have always believed that it is best to rent space from the state. Because the state probably acts within the law and there are guarantees that tomorrow you will not be asked to leave this premises. Since I have property and non-ownership properties, I can say that where we are the owners, my tenants feel great, in the sense that we always find a compromise and solve common problems. No one is worried that I will come tomorrow and tell them to return the premises, but this happens regularly from the Department’s side.
And the next manifestation, for example, is a change in the interest rates that were before. The Moscow government issues a decree in which it says: “Market rent should be determined based on an independent appraiser.” I personally contact a company that is accredited by the Department of Property to carry out this assessment, I order it at my own expense in order to get my bearings in advance. They give me an appraisal report, figuratively speaking, it turns out to be 7,000 rubles per sq. m. meter per year. The property department, for its part, violating the deadlines for this assessment, ends up as if it is carrying out the assessment and writing me a paper in which this market rate is not 7,000, as the official company estimated for me, but somewhere 20-25% higher. And there is only one thing you can do about this - again go to court and hope that in court you can prove that your assessment is more correct and realistic.
- So it turns out that the laws are not respected at all?
- There is a total failure to comply with legislative acts on the part of officials. The official does not bear any responsibility for failure to comply with the law. There is no normal system of reprimands or dismissals, so it is very easy for him not to comply with the law, and if I do not comply with it, then harsh sanctions are immediately applied against me. Renting from the Property Department is now the main headache for all small businesses in Moscow.
There is another aspect to this. There is a law on the protection of competition. In accordance with it, from June 2015, when my lease agreement, for example, for this premises expires, I will not be able to renew the lease agreement with the Department for a new term. According to this law, it is understood that the former tenant, no matter how much money he invested in the premises, how long he was here, goes to the competition for concluding an agreement on a general basis, by increasing the interest rate for rent, without having any advantages.
- What if we buy this premises from the Property Department?
- Right now I have a dilemma: whether to buy this premises before 2015 or to safely forget about it, because you yourself understand that if a networker has his eye on it, then there is no chance.
If you buy it. The Property Department estimates this premises at 80-90 thousand rubles. per sq. meter. Here the total area is 475 meters, multiply, take on average, by 85,000 per sq. meter, it turns out that the Property Department wants to get 40 million 375 thousand rubles from me. for this room. There is no point in talking about how much I can earn this money, taking into account the specific cross-country ability and purchasing power of Zelenograd.
Here it all comes down to the next problem - lending. If we say that the state supports small businesses, then the state would tell me: “Do you want to buy space? We’ll give you normal installments.” The normal installment plan under such conditions is 5-10 years. What did the Property Department do, he said: “Three years.” Divide by three, it turns out 13.5 million rubles per year. - you have to earn them. If you don’t make money, then attract credit money. Applying to Sberbank, secured by the same property, it is 12% per annum - 4.5 million rubles. per year - only interest on the loan. Is this help and opportunities for small businesses? Governmental support?
When there was a crisis in 2009, Luzhkov met small businesses halfway and lowered the interest rate, even to 1,000 rubles. per sq. meter per year is an incredible help. Then they tried to raise this rate back, but in the end it was left at that rate for 2013. Now the legislative framework is being changed, and in the middle of this year they plan to establish a market rental rate, which will be about 10 thousand rubles. per sq. meter, which means the almost complete disappearance of small businesses in Zelenograd.
Having met with an individual entrepreneur, the owner of a chain of hat stores in the Khabarovsk Territory, one can understand that the Far East is characterized by the same problems as the central regions of Russia: “I have been working as an entrepreneur since 1996. Currently I have a store and locations in shopping centers in the city. Of course, during my work I encounter many problems of small business. For me, the first place is the problem of rent. Landlords understand that entrepreneurs value their retail space and dictate their prices with complete impunity, and we have to agree. There is no law that would limit the cost of rent, and therefore entrepreneurs have nothing to rely on. Moreover, sometimes the views of the owner of the premises and the entrepreneur renting it regarding repairs are very different, and in case of disagreements, the money spent is not reimbursed.
The second problem for me is taxes, that is, the shortcomings of the tax system. The tax rate is high, and in addition, my business, for example, is characterized by seasonal dependence. There are seasons, months in which I suffer losses, and the tax must be paid in full. Contributions to the pension fund are high. The accounting system for the pension fund, and especially the reporting for employees, is complex.
To replenish my trade turnover, I need a loan, but currently, loans are issued only against collateral or a guarantee, which is sometimes very difficult to secure. There is also the problem of low solvency of the population. For example, our region is characterized by its proximity to China. Low-quality, cheap Chinese goods have flooded our entire market.
Shopping centers under construction are also a problem. Unfortunately, there are a lot of them even for one quarter, which reduces purchasing power. Transportation tariffs are high. The problem is that in our country there is very weak government support for small businesses, and there is no unified legislative framework for entrepreneurs.”
Conclusion
Having studied the problems of small businesses in Russia, we can name the main difficulties that entrepreneurs face. These are the areas that state policy should be aimed at improving:
Registering your business – simplify the registration procedure, reduce the time required to legalize the business.
Lending – make loans available to small businesses, reduce interest rates, motivate entrepreneurs to open their own business with favorable conditions for obtaining initial capital.
Taxation – encourage entrepreneurs with low taxes on small businesses, exempt start-up companies from taxes during their formation, and promote development.
Rent - ensure that the amount of rent remains within certain limits, improve the procedure for leasing premises so that the tenant and the tenant do not have conflict situations.
Legislation - to form a unified legislative framework for small businesses, on which entrepreneurs could rely, to make small businesses protected by the state, and to strictly monitor the implementation of legislation.
Small business concept
Small business includes activities carried out by business entities that are defined by the state as small business enterprises in accordance with the conditions established by current legislation.
Federal Law No. 209-FZ dated July 24, 2007 “On the development of small and medium-sized businesses in the Russian Federation” (as amended on July 26, 2017) contains conditions, the fulfillment of which means classifying an enterprise as a small business. According to Article 4 of this law, criteria are established for the average number of personnel, the amount of income and special requirements.
From the point of view of the content and specifics of small business, this form of economic relations means working in conditions of complete independence, property responsibility, risk, and the entrepreneur is the sole owner of his enterprise. Small businesses are often characterized by full involvement in the business of both the entrepreneur himself and his family members, the so-called “family business”.
Small enterprises are simultaneously employers, producers of products, services, works, catalysts of scientific and technological progress, taxpayers, and economic agents. Which together determines their role in the economy.
Criteria for small businesses
Federal Law of July 24, 2007 No. 209-FZ “On the development of small and medium-sized businesses in the Russian Federation” (as amended on July 26, 2017) in Art. 4 contains the following criteria for classifying enterprises as small businesses.
|
Share in a small enterprise |
Average headcount |
Annual income |
|---|---|---|
|
Special requirements are specified in detail in subparagraph “a” of paragraph 1 of part 1.1 of Article 4 (at least one of the requirements must be met). At the same time, the requirements relate to limiting the share of participation of the Russian Federation, constituent entities of the Russian Federation, municipalities, non-profit organizations, which should not exceed 25%, and the share of participation of foreign organizations should not exceed 49%. It is separately stipulated that these requirements do not apply to small enterprises from the high-tech (innovative) sector of the economy. There is also a restriction on ownership of voting shares. |
The average headcount should not exceed 100 people, while micro-enterprises with an average headcount of up to 15 people are separately identified (subclause “a” of clause 2 of part 1.1 of article 4). |
The annual income of an enterprise does not exceed 800 million rubles and 120 million rubles for micro-enterprises (clause 3 of part 1.1 of article 4). At the same time, the income limits are established by a separate act: Decree of the Government of the Russian Federation dated April 4, 2016 N 265 “On the maximum values of income received from business activities for each category of small and medium-sized businesses.” |
The role of small business in the economy
The role of small business is manifested at the macro and micro levels of the economy, as well as socially.
| Direction | Characteristic |
|---|---|
| Macro level of the economy. From the point of view of the functioning of the national economic system, the role and importance of small business is expressed in the following indicators: |
An increase in these indicators over time indicates an increase in the role of small businesses in the country's economy. |
| Micro level of the economy. The role of small business in the national economy is determined by the following circumstances: |
|
| The social role of small business in the economy |
|
Small business in Russia
From the point of view of the meaningful role of small business in the economy of the Russian Federation, changing economic conditions require that this sector of the national economic system enter a path of sustainable growth. Small businesses are receiving increased attention from the state: in recent years, the registration procedure for new enterprises and individual entrepreneurs has been significantly simplified, including the possibility of electronic business registration, programs to support small businesses in targeted and priority industries and areas of activity are being implemented, administrative barriers, inspections, etc. have been reduced. d.
In recent years, bureaucratic operations in government agencies for small businesses have become shorter than in financial institutions.
At the same time, small businesses should occupy more serious positions in the structure of the Russian economy, improving macroeconomic indicators. Accordingly, in this area, continued implementation of state policy to stimulate the development of small businesses is required. Today the state is faced with the task of developing production and supporting small businesses. Small businesses should not be concentrated in only large cities of the country.
Problems and prospects of small business in Russia
Small businesses currently require a transition to a qualitatively new state and a search for new growth points, which is due to the rapid development of information technology, the policy of import substitution, and the government’s policy towards building a digital economy.
The existing prerequisites at the moment have a positive impact on small businesses in the main production areas, this applies, first of all, to enterprises engaged in the production of Russian goods for the population, as well as the provision of services and performance of work.
At the same time, it would be naive to believe that small business can become the basis of the country’s economy: that’s why it is small so that its contribution to the economy is small enough. For large enterprises, small businesses can serve as a connecting link, and for the population - as a function of expanding the range of goods, services, and works. The industries and areas of activity in which small businesses can play a key role are determined by traditional areas for this sector: production of consumer goods, services, trade, public catering, food industry.
Problems of small business in Russia determined by factors that complicate its development:
- the presence of inconsistencies in the regulatory and legal support for the activities of small businesses;
- difficulties in accessing financial, property and information resources;
- the weak role of entrepreneurs' associations in the development of small businesses in general;
- low degree of socio-economic and organizational differentiation among small enterprises (creation of standard enterprises producing standard products and services);
- lack of a comprehensive system for training entrepreneurs in educational institutions, in particular, in certain areas of management, finance, legal support, production organization, business ethics, pricing, marketing, etc.
- as a result, novice entrepreneurs have a low level of financial and legal literacy, difficulties in organizing management and production, which leads to big problems in business, a slowdown in the development of a small enterprise, even to ruin.
The solution to these problems is facilitated by the state policy of supporting small businesses and stimulating their development. The state policy for supporting small businesses includes the following areas: regulatory, financial and credit, information and technical, organizational, personnel and consulting support; foreign economic activity is highlighted as a separate area.
Prospects for small business in Russia related to the following areas:
- Organization of new projects and small enterprises for the production of industrial and agricultural products in the context of the implementation of the import substitution policy in Russia.
- Creation of innovative small enterprises focused on IT technologies, implementation of information technologies and developments.
- Continued implementation of plans to support small businesses from the state.
- Implementation of the target principle of promoting small businesses, focused on the export of products, innovation, the social sphere, and high-tech products.
- Tax benefits for newly created small businesses.
- Elimination of administrative barriers, reduction in the number of inspections by regulatory authorities, facilitating the work of small enterprises in organizational and managerial terms.
Specific directions for realizing the prospects of small business in modern conditions in Russia:
- combining several areas and types of activities within one small enterprise;
- use of the innovative potential of the enterprise, owner and employees, use of the high professional level, education and qualifications of managers of small enterprises;
- adaptation of small enterprises to a difficult economic situation in a short time in the absence of complete and reliable information about the dynamics of market conditions;
- development of cooperation with large enterprises, various options for performing individual work to ensure the uninterrupted functioning of large industry;
- development of cooperation with other small and medium-sized enterprises.
conclusions
The advantages of small business in Russia are determined by the mobility of small enterprises, deepening specialization, and cooperation of business entities. This helps to increase the efficiency of small businesses, since they are able not only to quickly fill niches emerging in the consumer sphere, but also to pay for themselves relatively quickly.
Small enterprises have a fairly prominent position in providing employment, producing certain categories of goods, carrying out research, scientific, production and applied developments, as well as their implementation in economic practice.
For Russia, it remains relevant to continue the implementation of state policy aimed at expanding and developing enterprises in the field of small business in the economy of our country.
Socially, small business, being an integral part of the country’s socio-economic system, draws a significant part of citizens into the sphere of small business by opening their own business, ensuring sufficient production efficiency through specialization and cooperation of production. Accordingly, the development of small business is one of the main objectives of the economic policy of the Russian Federation.
Literature
- Federal Law of July 24, 2007 No. 209-FZ “On the development of small and medium-sized businesses in the Russian Federation” (as amended on July 26, 2017)
- Decree of the Government of the Russian Federation dated 04.04.2016 N 265 "On the maximum values of income received from business activities for each category of small and medium-sized businesses."
