When planning to start your own small business, you need to know who belongs to small businesses, as well as what advantages a person who is planning to start such an activity can count on.
General information
Today, the world is ruled by a market economy. It is provided with high-quality interaction of all participants: medium, small, large forms. Small, as well as two other groups, are usually called business entities. In the economy, they play a rather significant role.
In recent years, the market tends to monopolize, thanks to which large companies have gained new growth opportunities. But the small ones often merge into more powerful brothers to simplify the conduct of business. But many owners of small firms simply do not know what advantages they had and what they lose by abandoning independence. Representing specifically who belongs to small businesses and what this person can count on, the owner of the company will think twice whether to go under the wing of a large brother.
Please note that economics and entrepreneurship literally stand in small enterprises, as if on a whale of the universe. It is on such a small business that larger forms rely. Therefore, we can safely say that small firms are really very important for the country and the world as a whole.
What is it about?
To understand which companies will be discussed later in the article, you must first give examples of small businesses. In fact, people come across them daily. These are various small offices and small trading enterprises. The staff of the organizations is not numerous (up to hundreds of people), and the revenue is rather small. Nevertheless, these are small companies where everyone knows each other, a comfortable working atmosphere prevails. Often the owner of such a company performs a number of duties as an accountant, tax employee, and so on.
Today, small firms are a fairly extensive network covering almost all sectors of the domestic market. This is a large dynamically developing group of organizations. Economists say this is the “resilient” part of the federal business. One who belongs to small businesses, not only solves economic problems, but also is an effective tool to eliminate social difficulties.
About terms
Before you can understand what small business is, as well as give examples of small business, you first need to accurately formulate what entrepreneurship is in general.
Several definitions for this concept have been invented, but they can be generalized. Then they say that we are talking about such a thing, which is at the same time beneficial for society and brings economic benefits to its owner. From this it follows that entrepreneurship is independent, active, associated with the manufacture of goods, the provision of services. It all happens under the owner’s liability. The economy and entrepreneurship are extremely closely connected, which is expressed by the requirement that the subject strives for benefits not only for society, but also for benefits.
What about small forms?
Who are the subjects of small business? The terminology is intended to include in this group such individuals, legal entities who work in conditions of increased risk. The main task of the company is the maximum profit obtained in the process of manufacturing or selling goods, as well as providing services.
Only those companies that satisfy the criteria established in applicable laws can be assigned to this category.
And how to divide into groups?
Of course, small business entities are a huge array. Several criteria have been developed to distinguish groups based on specific objective features. Nowadays, the following parameters are most often used:
- amount of workers;
- registered capital;
- financial parameters;
- type of activity.
The selection of criteria for the typification of small business was carried out by the Bolton Commission, which received its name in honor of the great English industrialist Matthew Bolton, who lived in the XVIII century. The specialists of this organization decided to distinguish three criteria, according to which we can talk about belonging to small forms:
- Limited sales opportunities, excluding monopoly.
- Independence from the point of view of the law, allowing the owner to resolve all issues at his discretion.
- Personal management of the company by its owner, completely free to make any decisions within the law, to implement them.
And still: small business or not?
How to determine that you are a small business? The criteria applicable in our country are as follows:
- staff up to 100 people;
- revenue excluding VAT no more than 800 million.
They were enforced by the Federal Law under the number 209, adopted on 07.24.2007.
What’s the advantage?
If, analyzing the law on entrepreneurship and a specific organization, it is possible to identify that it belongs to a small form, we can safely talk about a number of advantages that are not available to large forms. And first of all, they mention a direct relationship with the consumer of goods and services. Companies operating in this sector adapt to changes in the market situation and consumer requirements almost instantly. The reason is that companies are flexible and able to adapt to the vision of the client in order to guarantee the choice of their product.
The form of small businesses is such that such organizations are practically devoid of internal bureaucracy; it follows from this that non-operating expenses are reduced to the minimum possible. At the same time, the organization is always in search of new suppliers, which allows to reduce procurement costs. Nowadays, the market is very competitive, so every small company is highly dependent on both the abundance of customers choosing its services and suppliers.
First and best
What is a "small business entity"? The criteria allowing to distinguish this group of business are such that each company, corresponding to them, is characterized by:
- The pursuit of innovation. This ensures competitiveness. The specifics of the activity is such that small firms are in close cooperation with large organizations, so they must quickly respond to changing situations in order not to lose a client and not be a loser. It is the introduction of the latest technology that eliminates this situation.
- The ability to integrate without loss. Small companies can team up with other organizations in an effort to support the competitor. It is noteworthy that several businessmen conducting their small-format business, joining forces, can resist even the giant of the market. However, the law on entrepreneurship comes to their aid, as well as the rules of law governing the monopolization of the market.
Weaknesses
If everything is so good, why then do you need state support for small business? This is due to the fact that small organizations regularly encounter a wide range of difficulties that are not obvious at first glance. In particular, activities involve:
- increased risks, because of which they speak about the instability of the whole thing in general;
- dependence on large organizations;
- low professionalism of the leadership;
- susceptibility to market conditions;
- financial difficulties;
- difficulty in interacting with other legal entities for which the conclusion of contracts with small businesses involves various risks.
Where do the legs grow from
Practice shows that failures are most often provoked by the incompetence of managers who choose the course of the company. Few are able to properly establish business relations and maintain working contacts. Often a company gradually changes from monetary relations (at least partially) into natural ones when it literally works “bash on bash”. All this leads to difficulties in functioning, confuses tax documents and ultimately leads to the collapse of the business.
Please note that today there are many short and long courses open, designed to exclude legal ignorance and explain to people both aspects of laws and features of business logic. A visit to the school will help:
- find out why it is needed and how the declaration of a small business entity is filled out;
- master the rules of conduct in the business world;
- Learn how to choose the right course for your organization.
And what are the laws?
Do not forget that there is a program under which government support for small businesses is provided. Despite the complexity of the bureaucratic structure of our country, in recent years this type of support for entrepreneurs has shown its effectiveness and has helped many to save their business and develop it.
The principles of assistance, as follows from the law, are as follows:
- it all starts with the filing of an application by the entrepreneur;
- infrastructure is accessible to all interested parties;
- equal access for all entrepreneurs, complies with the conditions prescribed in state law;
- the support complies with the requirements of Federal Law No. 135 of July 26, 2006;
- all stages of support are open and accessible to the public.
What to have with you?
In order to receive state assistance, the entrepreneur will have to write a statement of the established form. When submitting documents for the first time, it is also necessary to provide papers that would confirm that the organization is indeed one of the small ones. To do this, there must be confirmation of how many people work in the organization’s staff, as well as what the company's profit is and whether the revenue limit is respected.
In certain programs and in different regions, local officials have the right to introduce additional conditions by which to select specific participants in the support program. If such people operate in your region, you can find out about them in the city administration or in a special body created to interact with small business forms. Such exists in all regions of the state.
Please note that officials are not entitled to demand from the entrepreneur those documents that should be kept in state bodies at all times, and not in the hands of the businessman. However, an exception is the items mentioned in 210 of the Federal Law adopted on July 27, 2010, where there is an exact list of securities required to be submitted if a potential entrepreneur is interested in receiving assistance from the government.
Is it for everyone?
There are small businesses that cannot count on help from the government. This applies to the following list:
- credit companies, insurers, investors, pension funds, pawnshops, securities dealers;
- organizations that agree to the product section;
- gambling workers;
- non-residents of the country;
- firms selling excisable goods, rare minerals.
In addition, you should not count on help if:
- no documents were provided;
- conditions are not met;
- support has already been provided earlier, its deadlines have not yet passed;
- it was found out that the company had broken the law, and from that moment three years had not yet passed.
Everything is subject to!
Since the beginning of August 2016 in the Russian Federation a unified register of small business entities has entered into legal force. To get access to it, you must visit the Virtual Web of the Federal Tax Service of the country. Please note: in addition to small forms, the registry will be able to find data on medium-sized businesses.
As they immediately responded after the introduction of analytics, a similar project for our country turned out to be fundamentally new, since it allowed us to regulate the activities of small companies in the laws of the state. In the old days, something similar was carried out individually in each region; there were no opportunities to centrally take into account businessmen. At the same time, small companies were only included in local registers when they asked for support or some measures were applied to them. Otherwise, legal entities remained as if invisible.
How it works?
To create such a voluminous registry that would cover the whole country, I had to resort to cloud technology. Therefore, data can be requested from anywhere in the world at a convenient time for the applicant, and a response can be received immediately, without leaving the device. The request can be sent from almost any technology, as long as there is access to the Internet.
The creation of the registry involved obtaining information on how many people work in the company on average, as well as on the approximate income level of the organization. When forming, not only organizations, firms, but also individual entrepreneurs were taken into account. The creators have embedded in the database data obtained from:
- Incorporation;
- EGRIP;
- Ministry of Economic Development;
- bodies responsible for education and science;
- Skolkovo;
- MICEX.
So that all interested parties could use the resource correctly, a document was generated explaining the working procedure. He was called the "letter", the publication was engaged in the Federal Tax Service. Among other things, the letter explains what the time frame is for processing data (both information entering the system, and requests, extracts from it).
How was this created?
For the first time, the register was formed on the basis of data received for 2015. Information for this was requested from various authorities to ensure the fullest possible coverage of the issue. But if a small organization included in this list encountered in the period 2016-2018 the need to adjust its activities, its data in the system will change only in 2019. In particular, the registry will reflect changes in the average number and size of the organization’s revenue, as well as general information about the entrepreneur.