Forms and essence of entrepreneurship. The essence of small business
Entrepreneurship is key in terms of the socio-economic development of modern states. It is primarily interesting for its multifactorial nature. The essence and forms of entrepreneurship are represented in the widest range of interpretations. The influence of business can be traced in almost all areas of development of the state and society. What is the specificity of such a phenomenon as entrepreneurship? Development and essence of business - how are they perceived by society?
What is entrepreneurship?
Above, we noted the fact that the phenomenon in question can be interpreted in different ways. This is true. The essence of entrepreneurship does not have generally accepted criteria among Russian and foreign experts, as well as business representatives themselves. Likewise, norms have not yet been developed,determining the phenomenon under consideration as an economic category. There is a version that the essence of entrepreneurship is more of a social characteristic. That is, with the economy, this phenomenon is connected sufficiently indirectly. The most common synonym for entrepreneurship is “business,” in some contexts, “economic activity.” However, as some analysts believe, all these terms do not have the same meaning in all cases. Why? We study this aspect.
There is a version that the essence of entrepreneurship is far from always connected with business, that is, commercial activity within the framework of private ownership of any enterprise or organization. This phenomenon, as some researchers believe, should be interpreted in the most correct way in relation to the term “enterprise”. Which has, rather, a psychological nature, as it characterizes the personality of the person.
According to popular interpretation, enterprise is the ability of people to make certain decisions that contribute to the achievement of goals that are personally important for a person, for his employer or, in a number of contexts, for a business.That is, an entrepreneur, in the broad sense of the word, can also be an employee who is responsible for some key decisions for the company-employer. And it is not at all necessary that this is a top manager. This may be, as an option, the leading engineer of the company, who by all means needs to cope with the implementation of an urgent project. Or a senior sales specialist who is faced with the task of selling a batch of certain goods. Entrepreneurial and both useful. At the same time, his company-employer may not be in private hands at all, but be state or municipal.
However, the essence of entrepreneurship is often understood in the context of just the same business. However, many people who are engaged in commercial activities, in practice, not very enterprising. They just like what they do, even if the results they get are not the most outstanding.
Some experts define the concept and essence of entrepreneurship mainly in a legal context. That is, if a person is registered as an owner of a business company or individual entrepreneur, then he can be classified as a person engaged in the relevant type of activity.
Entrepreneurship as a business
One way or another, in the mind of the average person the concept and essence of entrepreneurship as a whole is nevertheless connected with commercial activity. Thus, a person engaged in an appropriate type of activity can be characterized as:
- the owner of the business entity or individual entrepreneur;
- engaged in commercial activities as the main one.
Thus, it combines the characteristics of a business entity in the aspect of legal, economic and social criteria at the same time.
Criteria for the classification of entrepreneurship: a factor of scale
Entrepreneurship is of a different scale. Also, it has a variety of forms and types. In Russian practice, there is a certain set of criteria, relative to which this type of activity can be classified. Consider its essence.
Entrepreneurship, thus, can be expressed in the form of small business, medium and large. The criteria for assigning a business to one of them are very different. So, for example, the essence of small business is to some extent fixed at the level of the federal legislation of the Russian Federation.
In the relevant legal acts there are criteria for classifying a business as an SME, in particular, based on the turnover and the number of employees in the enterprise. In relation to small businesses, certain privileges are established in the aspect of taxation: for example, only those entrepreneurs whose earnings do not exceed the statutory value can work on “simplified taxation”.
Profit source factor
Another criterion for the classification of entrepreneurship is a way to extract profits. Thus, experts identify businesses that receive revenues by performing production functions - the release of goods, the provision of services. There are enterprises earning from mediation.
Also, experts identify a separate category of companies that operate in the financial sector - they issue loans, act as brokers, engage in trading, etc. It is quite possible that an enterprise will combine all these types of activities.
Self-employment and hiring
Experts identify two large-scale categories of businesses - those that are represented by organizations, and individual entrepreneurs, reflecting, in fact, the fact of self-employment of their owners, as well as those that operate by hiring third-party personnel.An entrepreneur, therefore, can, by opening a business, either work for himself or turn to the work of hired personnel.
It can be noted that, as is the case with the criterion reflecting the scale of the enterprise, the legislator in several aspects approaches the regulation of self-employed businessmen and those who hire others in different ways. It is known that, for example, Russian entrepreneurs must pay contributions to the PFR, the FSS and the MHIF. If a person conducts business as an entrepreneur, then he must make the appropriate payments for himself, and if he hires someone, then for those people. If a businessman owns an economic company, then he does not have to pay for himself to the state, only for hired employees. In turn, in the first case, the PI may set off the appropriate payments for themselves instead of taxes. But neither in that nor the other scenarios contributions for employees do not go to offset fees to the FTS.
Another criterion for the classification of businesses is the business ownership structure. Thus, a firm can be fully or partially state owned or in private hands. It is quite possible that the assets of the organization will belong to a public association, NPO.There is a criterion by which companies are divided into those whose owners are citizens of the Russian Federation and those whose assets belong to foreign residents. Some experts classify businesses according to the number of owners. There are, therefore, enterprises whose assets belong to one person, and there are those whose ownership structure includes several investors.
However, among the most common criteria for the classification of business is just the same scale of activity. At the same time, the terms “entrepreneur”, “businessman” are very often associated with the owner of a relatively small company. If we are talking about big business, then in this respect in the Russian Federation we will use the term "oligarch".
Specificity of SMEs
Let us consider in more detail the essence of small business. This type of activity, as many experts believe, is extremely important for building a modern market economy. In particular, in some developed countries, SMEs provide more than half of the jobs, and also occupy a significant share in the country's GDP. There are industries that are predominantly represented by small enterprises.These are retail trade, services, IT-sphere.
On the example of SMEs, the socio-economic essence of entrepreneurship is easily traced. First of all, it can be noted that the owners of small and medium-sized enterprises are almost always private individuals, that is, they are busy with something, and this does not contribute to unemployment. In addition, they provide jobs for other people. SMEs pay taxes - albeit often in a preferential mode, if we talk about the Russian model. They often create the most competitive samples of commodity products, provide the highest quality services, thereby stimulating the natural development of the national economy.
However, SMEs, due to their relatively limited financial resources, are usually very sensitive to economic trends occurring at the national or global level. Many enterprises can not adapt their business model to changes, for example, the exchange rate of the national currency. As a result, as they develop, many SMEs sell their assets to larger players or merge with other small businesses. There are, of course, successful examples when SMEs, without consolidating with anyone, successfully developed their brand and naturally turned into a large company.
The essence and types of entrepreneurship, thus, are characterized by a wide range of approaches to theoretical justification. A business can be classified into various categories, based on its scale, the structure of ownership of assets, the number of owners and the specifics of the organization of the labor process.
The essence of entrepreneurship also reflects the social perception of this phenomenon. At the same time it can be both positive and negative. Often, in the mind of an average person, a person engaged in this kind of activity is understood as a “shopkeeper,” a shopkeeper. A similar attitude, as many analysts believe, has developed among Russians as a result of a direct ban on entrepreneurship in the Soviet era. At the same time, such associations manifest themselves less and less in the minds of the Russian average man. People are beginning to understand what the social essence of entrepreneurship is all about. Consider this aspect in more detail.
Entrepreneurship: social aspect
Entrepreneurs in the Russian Federation, as we noted above, are in some cases perceived by a simple man in the street not in the most positive way.However, precedents of this kind are gradually replaced by moods that reflect the realization that business in the Russian Federation plays a significant social role. First of all, in the aspect that businessmen provide jobs for Russians in no way smaller than the state. No matter how people treat business, many of them understand that the company in which they work was opened by a person, not a government. Tu salary, which, quite possibly, significantly higher than the national average, is paid not by the state, but by the entrepreneur.
The essence and importance of entrepreneurship in the Russian Federation, therefore, is generally quite adequately understood by citizens. However, as many experts believe, this is not always accompanied by the willingness of citizens to be active participants in the development process of their company. People are still working primarily for salary purposes. Aspects relating to the business model of the enterprise, its position in the market, the current financial situation, citizens are not so worried. In this sense, a simple man in the street can completely not share the entrepreneurial values of his employer, limiting himself to the simple fulfillment of his job function.
Having considered the nature and types of entrepreneurship, we can study such an aspect as the interaction of business and the state. What are the features of the appropriate type of communication?
Business and state
The essence of entrepreneurship and entrepreneurial activity in modern economies implies a close relationship between business and the state. This is manifested in many different aspects. Speaking about the basic principles of communication between entrepreneurs and the state, it can be noted that this process is carried out within the framework of a political agreement. He appeared, if we talk about the historical context, for a long time.
Its essence is that business, on the one hand, pays taxes to the state, solves social problems associated, in particular, with the employment of citizens, sometimes contributes to the solution of issues at the level of international politics. In turn, the authorities give businesses protection. In modern political models, it is legal in nature: private ownership of enterprises is protected by law, any encroachment on it is punishable. The state also contributes to the protection of businesses in the aspect of concluding contracts,regulating relevant relations through separate legal acts, while ensuring the functioning of the judicial system.
Thus, the essence of entrepreneurship and entrepreneurial activity, as many experts believe, can be understood as a political phenomenon. Under conditions of anarchy - when state institutions are absent - people find it difficult to conduct business due to the lack of guarantees for the protection of private property, rights and interests.
Having considered the essence and forms of entrepreneurship, as well as examining the nuances of business and government communication, we will study the aspect reflecting the influence of private companies on the state economy. How is it traced most explicitly?
Business and national economy
The essence and role of entrepreneurship, as we have noted above, are often associated with aspects of social development. Businessmen give people jobs and opportunities for improvement in any professional field. However, it is useful to consider such an aspect as the economic essence of entrepreneurship. This can be done on the example of the influence of business on the national economic system of the country.It can be traced in various fields.
Private business involves, above all, competition. Which, subject to limited state intervention and other factors capable of determining a clear advantage for any enterprise, encourages companies to be more efficient, to optimize the business model, to produce the best products, to provide the highest quality services. Thus, entrepreneurship is the environment for the natural development of the economy.
The next aspect of business influence on economic processes is pricing. And, as a result, the distribution of national capital. It can be noted that this area of communication of enterprises and the economy of the country is directly related to the competitive component, which we noted above. The fact is that prices largely depend on the supply on the market, which, in turn, is largely determined by the number of players.
The activity of private enterprises largely determines the external investment attractiveness of the state economy. Of course, the role of the state - especially in terms of the quality of legislative regulation of business - in this context will be the leading one.However, the degree to which an entrepreneurial culture is developed in the country, which is no less important for foreign investors, also depends on the position of the businessmen themselves.