The concept and characteristics of entrepreneurship

Sustainable and efficient management of small enterprises plays a special role on the way to overcoming the global economic crisis. The dynamic development of small entrepreneurship has a positive effect on the development of the economy as a whole and on the welfare of citizens.

Entrepreneurship is an essential element in the structure of modern market economy. Under this concept implies independent activity, which is carried out with the aim of obtaining regular profits risking its own assets.

A business Entity should be officially registered in the state bodies. Activities can be carried out in such areas as sale of goods, rendering of services or performance of work, not prohibited by law.

Environment for business

The transition to the model of free market relations has demanded to reconsider the economic system in which monopoly property belonged solely to the state. This approach was constrained opportunities for development of creativity and initiative. Therefore, one of the important conditions for the sustenance of the business is private property.

To maintain a healthy market relations is necessary also such important conditions as a favorable tax climate, stable economy, loyal social policy. An important role plays the working system of intellectual property protection and flexible market mechanisms.

Common signs

Signs of business are:

1. Independence and autonomy of the business entity. People, becoming an entrepreneur or taking a leadership position in the organization, responsible for resolving all production issues, the resolution of which will depend on the profitability of the business.
2. Personal interest and responsibility. These characteristics of entrepreneurship have similarities with the previously listed, with the difference that in addition to striving for personal gain, the entrepreneur takes into account the interests of the team, company, and sometimes the country as a whole, if this is a global business.
3. Creativity, innovation, original presentation of the product - it is also the main features of entrepreneurship. A true businessman is always in creative search. The desire to be first and best in their niche causes it to be a step ahead of competing firms. Welcome such personal qualities as the ability to make unconventional decisions, respond quickly to the situation, to be able to benefit where others will not see.
4. These are also Important signs of business as financial and economic risks. They are forced to maintain the momentum and pace, eliminate possible stagnation on the background of the continuously soaring of the spirit of competition. The newly-formed business must be a new, qualitatively different from competitors.
5. The Principle of legalized activities. Doing business without registration in the prescribed manner prohibited by law. In addition, there are such areas, whose activities must necessarily be accompanied by licensing.

Private business

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

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In accordance with domestic and international practice, one of the main indicators, which is the basis for the distinction in the category of small or medium business is number of employees. Secondary criteria considered the amount of the Charter capital, size of assets, volume of turnover.

Small business

Under the law, the main features of small business is the average number of employees, which directly depends on the activities during the reporting period, the annual turnover and value of assets. While the average number of employees must not exceed:

• For industrial subjects - 100 people;
• Agriculture - 60 people;
• For the wholesale trade - 50 people;
• Retail trade - 30 persons;
• For other types - 50 people.

Under the subjects of small entrepreneurship is commonly understood as activities of individuals without legal entity. Under the entities which use simplified taxation, involve the organization with maximum number of 15 people.

Advantages of small business

Organizations that have the characteristics of small businesses, have the following advantages of conducting the selected activities:

1. Ability to adapt quickly to established local economic conditions.
2. Efficiency and independence, and also flexibility in making and implementing the decisions.
3. Small cost of organizing and doing business and the initial capital.
4. The Ability to quicklyrespond to changes in market demand and market conditions.

Disadvantages of small business

However, entrepreneurial activity has a number of disadvantages that can occur under the influence of external or internal reasons:

1. High degree of instability in the market causes a higher level of risk.
2. Mistakes in management, caused by lack of experience or weak competence of the Manager.
3. Dependence on larger companies, banks, the state as a whole.
4. Difficult finding auxiliary resources leveraged in financial institutions, which prefer to lend to big business.
5. Difficulties and caution in the conclusion of agreements on mutual cooperation with contractors.

Government support

Small organization with characteristics of business entities have the right to expect support from the state, which is the use of the following measures:

• The Creation of a legislative framework to support small and medium-sized businesses.
• The Opportunity on favorable terms to use state loan funds, material and technical base, information and technical resources.
• Eliminating bureaucratic approach to registration, licensing and certification for organizations that have the characteristics of entrepreneurship, as well as simplification of filing accounting and statistical reports.
• Support in implementation of foreign economic activity.
• Support in education, retraining and raising the level of professionalism

The Successful functioning of enterprises and organizations, which are inherent characteristics of the small enterprise sector can lead to the formation and maintenance of the middle class population power, which in turn leads to higher socio-economic level of development of the country.