Theoretical issues and growth prospects for small businesses in Ukraine

Abstract

In the article, the status of small businesses in Ukraine is analyzed, the factors hindering their growth are identified, and possible ways to address the difficulties in the current business model are suggested. The key functions of small businesses are identified, and some proposals for the inclusion of small enterprises into implementation of the general strategy of economic growth in Ukraine are brought forward. Small businesses are viewed as the most dynamic component within the framework of the national economy and an essential part of the system of economic relations. Small businesses contribute to creating a competitive environment since they are naturally antimonopoly. Small businesses are a leading sector of the market economy which provides the market with goods and services. They are self-contained in performing their operations and managing manufactured goods and profits left after paying taxes and other financial obligations. Therefore, in order to ensure better functioning of small businesses, it is necessary to improve the research agenda on entrepreneurial issues. An important aspect of running a small business is dissemination of best practices through holding conferences, seminars, round tables, forums and international meeting. Given the processes of decentralization, the creation and efficient use of the network of regional and trust funds for supporting entrepreneurship in local communities, and the introduction of an innovative mechanism of credit guarantee and financial assistance are urgent. A key factor hindering the growth of small businesses is a lack of resources, namely, material, technical and financial.It is stressed that for a long time, the development of small businesses has been slowed down by the following negative factors: crisis conditions in the domestic commercial production, price increase, inflation, low paying capacity of the people, corruption. Particularly, the cumbersome system of accounting, financial and tax reporting result in additional costs for enterprises. Other constraining factors for small businesses growth in Ukraine include the imperfect legal and regulatory framework, as well as a labour-intensive process of official registration of small enterprises, which requires significant financial resources. A particular attention is paid to issues related to simplification of regulatory acts in the field of small businesses in order to reduce corruption, improve the investment climate and create conditions for economic growth.