Entrepreneurial activity in a market economy is represented by large and small business, large and small enterprises. The size of an enterprise is determined primarily by the number of employees. As a rule, on this basis, enterprises are divided into:
· Small – up to 50 employees;
· Average – from 50 to 500;
· Large – over 500;
· Particularly large – over 1000 employees.
Automation of production leads to the fact that other characteristics also play an important role in determining the size of an enterprise - sales volume, size of assets, profit received.
Positive influence The development of small and medium-sized businesses was influenced by the entry into force on January 1, 2008 of the Federal Law “On the development of small and medium-sized businesses in Russian Federation", which brought certainty in relation to small businesses and defined its categories based on average number. An enterprise with up to 100 people is a small enterprise, and from 101 to 250 people is a medium-sized enterprise. The criteria for the share of participation in the authorized capital have also changed. Legal entities that have a participation share can no longer become small businesses foreign citizens and foreign legal entities in the authorized capital exceeds 25%, as well as the total share of participation of constituent entities of the Russian Federation, public and religious organizations, charitable and other foundations exceeds 25%.
Economic rationality big business is determined, first of all, by its technical activity: a large company provides the best option for investment in the interests of the investor in conditions of competitive risk. Competitiveness gives a large firm the opportunity to mobilize significant amounts of capital.
A large company is engaged in short-term and long-term planning its activities, develops a marketing strategy, has high human resources potential, and has the ability to solve social problems at the enterprise. All these advantages allow large enterprises to establish their position in business.
But entrepreneurship is represented not only by large, but also by small enterprises. Small businesses have an average life cycle of six years, and sometimes three years. Some of them go bankrupt, some voluntarily cease their activities, and some become larger. But the number of newly born enterprises constantly exceeds the number of those that have ceased their activities.
Compared to large companies, small businesses have clear advantages.
û To organize a small business, large investments in fixed assets are not required. This has a positive effect on production costs and allows us to attract young, active and talented entrepreneurs.
û Flexibility and mobility. Small firms respond more quickly to changes in the market situation and market demands.
û Duplication and interchangeability of workers. With a certain division of functions between employees, a small team is characterized by mutual assistance and support for each other.
û High speed of information movement. It is ensured due to the smaller amount of information in a small enterprise, and direct direct communication between the manager and subordinates.
û Good manageability with relatively low management costs.
Small businesses operate on the principle of “need-oriented”, adapt to the needs of their clients, and offer the market something new and really effective. Representatives of small businesses know how to think forward. Large companies often succumb to the temptation to produce as many products as possible, forgetting about the requirement not only to produce, but also to sell them.
Along with the advantages, there are always disadvantages. Let us highlight the most significant of them:
Significantly higher degree of risk. An entrepreneur works under the fear of going broke and becoming bankrupt.
The importance of capital accumulation. To “stay afloat” it is necessary to expand production; There are restrictions on obtaining a loan, because A small entrepreneur does not have the opportunity to pay high interest rates.
Limited scope of activity. Small businesses have no place in industries that require large capital investments.
The limited range of products makes a small enterprise vulnerable from the point of view of market conditions.
Inability to compete on equal terms with large-scale production due to the modest scale of production and limited resources.
Of course, the shortcomings and failures of the activities of small businesses are determined by both internal and external reasons, operating conditions of small enterprises. Experience shows that most failures of small businesses are associated with a lack of management experience or professional incompetence of small business owners.
So, modern entrepreneurship is a synthesis of large and small production. Large-scale production forms the “skeleton” of the entire production system, and small-scale production forms “soft and flexible fabrics”, without which large-scale production cannot exist. One of the most important features of the classification of enterprises is its size, determined primarily by the number of employees. Thus, enterprises are divided into small enterprises - up to 50 employees; medium – from 50 to 500; large – over 500; especially large ones – over 1000 employees.
24.12.2015Small business is a concept that is used both in an informal context and in normative legal acts. The first option is used depending on the subjective perception of a particular person, the elements of commercial management at the appropriate level.
As a rule, people understand the concept of small business as a small entrepreneurial activity that is carried out privately. Anyone who has a small kiosk, hairdresser or small shop in his private ownership is called a modern times as a private entrepreneur or small business owner.
What is a small business?
In fact, in the legislation, there are special criteria that determine the main differences between micro, small and medium-sized businesses. This list of criteria includes:
1) Number of employees.
2) Annual income.
Based on Federal Law No. 209 and Resolution No. 702, small enterprises and organizations include those firms that:
1) They have 15-100 people on their staff.
2) They have an annual income of 120-800 million rubles.
There is no doubt that not every beginning entrepreneur manages to meet all the noted criteria. That is why, if he fails to comply with the noted standard by which a small business is qualified, legally, his company is a micro-enterprise.
To summarize, we can say that a small business should be understood as even the smallest private enterprise or organization. However, for legal compliance, it is necessary to bring this company to those normative indicators that will relate to the class of small or medium-sized businesses, otherwise the company is assigned the status of “micro-enterprise”.
What is a medium business?
It should be said that the average business is more domestic than regulatory, however, in legislation this concept can be used on the basis of regulations. Based on the everyday use of the term “medium business”, one can understand a not very large-scale enterprise or organization, but it plays a significant economic or economic role in the country or region. This type of business can include a network of workshops, companies or a group of legal entities.
The legislation of the Russian Federation clearly defines the concept and structure of medium-sized businesses. Thus, a medium-sized enterprise can be classified as:
1) Staff of 101-250 employees.
2) Annual income ranges from 801 million to 2 billion rubles.
These are the indicators that divide small and medium-sized companies and enterprises. There is no doubt that when opening even the most modest network of workshops or beauty salons in the vicinity of a region or city, legally this will relate to a medium-sized business, since it follows the structure and concepts of a medium-sized business.
What is the fundamental difference between small and medium businesses?
In order to give the correct answer to this question, it is necessary to carry out an analysis from a legal and economic point of view.
From the everyday level, this is, of course, a difference in the scale of doing business. From point of view economic indicator, a small business brings in at least 2.5 times less annual profit than an average one. But at the same time, the staff in a medium-sized business is much larger than in a small one.
It is according to these important criteria that one should distinguish medium-sized businesses from small ones. In addition, the legislation establishes various conditions for the creation of small and medium-sized businesses, quotas and criteria. We should not forget that the law also distinguished these concepts by rule of law.
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Small business |
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Single enterprise or firm |
Network or group of organizations |
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The staff ranges from 15-100 employees |
Works from 101-250 employees |
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Annual income ranges from 120-800 million rubles |
Annual income ranges from 801 million to 2 billion rubles |
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A modern market economy is characterized by a complex combination of industries of varying scale - large ones, with a tendency to monopolize the economy, and medium and small enterprises that arise in industries that do not require significant capital, volumes of equipment and cooperation of many workers. The size of enterprises depends on the specifics of industries, their technological features, and the effect of economies of scale. There are industries associated with high capital intensity and significant production volumes, with a large share of fixed assets among the entrepreneur’s costs. Large businesses are mainly concentrated in these industries. These include the automotive, pharmaceutical, chemical, metallurgical industries, and most enterprises in the extractive industries. The industries that define scientific and technical progress are growing at the highest rates, since they accumulate financial, production and human resources faster than others. According to On the contrary, in industries for which capital costs are not large, where the share of personnel costs in the costs of entrepreneurs is large, small enterprise sizes are preferable.
There are two problems. Why should we differentiate between small and medium-sized businesses and what are the criteria for the differences?
The need to distinguish between small, medium and large businesses is due to the fact that firms of different sizes play different roles in ensuring the sustainability and competitiveness of a market economy, have different risks and benefits, and require different approaches to their government regulation and legal support. All this forces legislators to look for qualitative and quantitative signs of determining, first of all, small and big business and formulate basic approaches to their regulation.
Big business.
The concept of large business does not lend itself to a simple definition. Usually the concept of “large business” is applied to such giants as IBM and General Motors.
According to the expert, the largest companies in the world in 1996 included the following companies: General Electric (USA), Roal Dutch (Great Britain - Denmark), Coca-Cola (USA). Nippon Telegraph & Telephone (Japan). Exxon (USA). This list also included one Russian company - Gazprom, which took 421st place. Among the 500 companies in the world that received the largest balance sheet profit in 1996, according to Fortune, were: General Motors (USA). Ford Motor (USA), Mitsui (Japan), Mitsubishi (Japan), Itochu (Japan) 1
The main element of the capitalist economy, the carrier of the evolutionary process in the economy, is a large, growing corporation. Large firms ensure the stability of the market economy and its main components: prices, production structure. Today they produce most of the mass-driven products. It is thanks to large enterprises that business development is taking place, which is based on mechanisms for reducing production costs. Large firms are carriers of scientific and technological progress; they accumulate and then introduce methods of rational entrepreneurship.
There are four main, fundamental reasons that stimulate corporate growth. The first is the desire to achieve economies of scale in production (technological economies). It is formed by increasing the volume of output of a given product by reducing costs per unit. This reduction is achieved by changing the nature of the resources used, which is manifested in increased specialization of the labor used, the introduction of automatic equipment, including automatic assembly lines, etc. This contributes to the development of concentration of production in large enterprises, the formation of multi-factory and industry monopolies.
The second reason is the desire to save on the scale of the field of activity (another term is saving on the variety of production products and sales markets). This type of economy, called the economy of growth by the English economist E. Penrose, is formed due to the unbalanced growth of the company, in which new unused resources constantly appear. this moment time production and financial resources. Savings from the use of these resources become an incentive to expand the scope of the company's activities. It depends on the specific set of production resources that the firm has, so most firms strive to penetrate those areas in which technological and market factors are common to the firm's core production. Thanks to economies of scale, large multi-product, multi-industry and multinational companies have emerged. The tools for their formation were vertical integration (combination), diversification (including conglomeration) and internationalization with its highest form - globalization.
The third driver of corporate growth is savings on transaction costs. These costs are associated with the implementation of market contractual relations and arise when a product or service is transferred from one technologically isolated structure to another, that is, when a transaction takes place - a deal, an operation, a contract, an agreement. Transaction costs are the costs of operating a market system. Reducing these losses is achieved by limiting the scope of market relations through vertical integration, diversification and internationalization. O. Williamson, based on studies of changes in the organizational forms of corporations in the United States over the 150 years that led to the formation of the modern company, called these costs “the main factor in the organizational evolution of corporations.” A modern corporation, in his opinion, is the product of a series of organizational innovations, the purpose and result of which is savings on transaction costs. In other words, a modern corporation is a means of reducing these costs.
In addition, most modern large firms are international companies operating in global markets, which allows them to take advantage of the relatively cheap resources of the global economy by locating different stages of production in different countries.
IN modern conditions large firms actively influence not only the internal business environment, creating effective business routines, but are also able to actively modify the external environment, providing them with the most favorable conditions for functioning. These properties of big business are most clearly manifested in the activities of modern transnational corporations (TNCs). The latter, thanks to the enormous concentration of resources and centralization of financial and material flows within the corporation, are able to create for themselves an effective market and social infrastructure. Coming to less developed countries, TNCs themselves create communications, shape the behavior model of employees and consumers, and actively influence domestic and international legislation.
Along with competitive advantages, large businesses also have weaknesses. The growth of a company is often accompanied by a decrease in the efficiency of its management. Very often, large firms have the ability to regulate demand and prices for their products, which reduces incentives to increase efficiency and makes large businesses inflexible. These features of large firms create opportunities for sustainable business development in medium and small sizes.
Table 2.4.
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Strengths of big business |
Weaknesses of big business |
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Ability to actively change external environment entrepreneurship |
Reduced incentives to increase production efficiency |
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Opportunities to create and accumulate scientific and technical progress achievements and procedures and rules of rational business |
Opportunity to limit access of other firms to the achievements of scientific and technological progress and rational business |
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Economies on production costs (technological economies, economies of scale, economies of transaction costs, use of global markets) |
Decrease in management efficiency with growth of firm volume |
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Sustainability |
Inflexibility, lack of timely response to changes in the market situation, loss of contact with the consumer |
State regulation of large business as a special type of business aimed at reducing the risks associated with its operation. Since the greatest risks for society are created by the ability of large firms to monopolize production and industries, government regulation of large businesses is mainly limited to problems of monopolization, aimed at limiting the merger of large firms, price manipulation, various forms of discrimination against small firms, and non-use of patents.
Russian big business.
Large Russian business acts as the engine of the national economy. It is still much more efficient than the majority of medium and small companies in terms of labor productivity, profitability, and, finally, growth rates. Due to its special position, over the years of reforms, large Russian businesses have concentrated the main cash flows in their hands. As a result, he was able to form fairly strong teams of highly paid, highly qualified managers.
According to Expert magazine, the two hundred largest Russian companies account for more than half of all industrial production in the country. The total sales volume of the two hundred largest enterprises in 2000 reached 3.67 trillion. rub. or 130.4 billion dollars.
Small and medium-sized businesses (SMEs) are a social, legal and economic category that includes companies and individual entrepreneurs with a small number of employees and profits. Entrepreneurship of this type reacts flexibly to changes in market conditions, but requires additional support for development
Small business is a type of entrepreneurship that is characterized by a small number of employees (up to 100 people), average revenue (up to 800 million rubles per year), and an emphasis on equity capital. This is not only an economic, but also a socio-political category, whose representatives are characterized by a special worldview.
Businessmen of this type quickly adapt to new changes and are highly adaptable to any working conditions. SMEs often open up those facets of the market that look too risky and dangerous. Import of Chinese goods, long-term nail coatings, making sushi - small companies first mastered all this, and only then tried to take over large businesses.
There are over 6 million small businesses in the United States, each generating revenues of up to $10 million annually. These organizations employ approximately a third of the total working population with permanent or temporary work. It is from here that the notorious “ middle class", which forms the backbone of the country's economic well-being
Russian Federation: legislative support for small businesses
In our country, Federal Law No. 209 of July 24, 2007 “On the development of small and medium-sized ...” is in force, which defines the basic principles for classifying a company into this category. There are requirements for organizational form, average number of employees and revenue (maximum). The maximum income that an organization can receive is subject to revision by the Government of the Russian Federation; the current Resolution has been in effect since August 1, 2016. Information about all individual entrepreneurs and organizations belonging to this category is collected in a special Register.
Main features of a small business
In the above Federal law lists the various requirements by which a particular enterprise falls into the desired category. Legal entities cannot have a total share of participation of constituent entities of the Russian Federation, foreign companies, religious charities, and public associations exceeding 25%. In addition, the company cannot be owned by other companies that are not SMEs in an amount exceeding 49%.
In the first half of 2016, about 218,500 small enterprises were created in Russia, while 242,200 companies left the market. Just a year ago, the trend was different: instead of one organization that left the market, two new companies appeared. The largest number is in the Central Federal District - 1,636,987. The record holder for the number of SMEs is Moscow: 451,979 micro-organizations, 170,000 entrepreneurs: comparable to the population of a small European country.
Who is the driver of small business in Russia?
Approximately every 10 able-bodied people in the Russian Federation work for themselves. Moreover, the vast majority of self-employed people (about 70%) are not registered as individual entrepreneurs and operate illegally. The reluctance to formalize the status is associated with bureaucracy, high contributions to the Pension Fund and uncertainty about one’s own future. Another factor is that people simply do not see where their money is going, which causes legal nihilism.
Small and micro businesses are based on the following areas:
- Construction, repair and finishing (at least 20%);
- Programming, computer repair and related industries (about 11%);
- Interior design (10%);
- Hairdressing and beauty services at home (6%);
- Tutoring (5%).
Small business in Russia - powerless and illegal?
In the Russian Federation, approximately a third of the population are citizens who are of working age, are not registered as unemployed, but are not employed at any enterprises. Approximately half of these people do odd jobs; people have been employed in organizations for years, but receive “salaries in an envelope.” This is more typical for the province, where there are no other conditions for employment and employment.
However, another 8-9 million are representatives of small “gray” businesses who work either in splendid isolation or in small teams. Let's compare this with the number of legal individual entrepreneurs - 3.7 million people - and we get the real figure of the shadow market. After all, all the money that the self-employed earn is in the economy, but for objective reasons cannot be invested in banks, equipment and further development own business.
Problems of small business in Russia
- Difficult access to support, subsidies, loans, new technologies;
- Administrative measures from outside government agencies(high fines for violations of the law);
- Difficult competition with large organizations in certain areas (trade, production, transport);
- Incorrect tax policy, leading to too much withdrawal from the new enterprise large quantity resources.
Differences between small and medium businesses
MB - mainly self-employment or seasonal recruitment of workers to perform unskilled tasks: harvesting, transportation, packaging. The company or individual entrepreneur is localized in one locality and collects a small profit. Medium-sized business is a must to attract more personnel (both qualified and unskilled workers), investments, and active investment in the development of the enterprise.
Summary
So, small business is a pioneer in those areas in which it is difficult and risky for the state and large companies to invest. People come up with original models, and although many entrepreneurs “burn out,” some businessmen make money start-up capital For further growth.
Real help The state should be to create conditions under which it will be easier for the self-employed to legalize themselves than to work “in the gray way.” In other words, people just need to be left alone for a while and wait to see what happens.
The main indicator that allows an enterprise to be recognized as small is the number of employees for a specific period of time. Criteria such as the size of his assets, size authorized capital and annual turnover.
In Russia, a small enterprise is commercial organization, in the authorized capital of which there is a share of participation of constituent entities of the Russian Federation, charitable and other foundations, as well as religious and public organizations no higher than 25 percent. In addition, a share that belongs to several legal entities or one legal entity person, should also not be more than 25 percent.
The number of employees for a certain period should not exceed the standard established in a particular area. If it is construction, industry or transport, the number of employees of a small enterprise cannot exceed 100 people. If this wholesale- no more than 50 people, if household services or retail- no more than 30 people, if any other activity - no more than 50 people.
Medium enterprises
The definitions of medium and small businesses around the world are quite similar. What generalizes them is economic entities that do not exceed a specific indicator in terms of the number of employees, the amount of gross assets and turnover. Medium-sized enterprises are also entitled to simplified reporting. In order to understand the scope of the number of employees - after all, this criterion is most often the main one - it is worth considering several examples.
If we take a consulting or research agency, it can be classified as a medium-sized enterprise when the number of its employees ranges from 15 to 50. If we talk about travel company, then it can be classified as a medium-sized enterprise when the number of its employees is in the range from 25 to 75. An average print media will be an editorial office with the number of employees not exceeding 100. Just as with small enterprises, medium-sized enterprises are considered from the turnover perspective and the market share they occupy.
Large enterprises
A large enterprise is one that produces a significant share of the total commodity volume of any industry. It is also characterized by the number of people employed, the size of assets and sales volume. To classify an enterprise as a large business, it is necessary to take into account territorial, industry and state specifics. For example, for the field of mechanical engineering, the main factors are the volume of output, the number of workers and the cost of fixed assets. If we take the agro-industrial complex, we can only focus on the number of livestock or the area of land.