Crisis and small business

The impact of crisis phenomena in the economy of the Russian Federation on small businessNATIONAL INSTITUTE FOR SYSTEM STUDIES OF ENTREPRENEURSHIP PROBLEMS

Authors: Litvak E.G., Migin S.V., Nekhaev A.A., Shestoperov A.M.

1. The main features of the small business segment in terms of the impact of crisis phenomena in the economy of the Russian Federation on it

According to the Federal State Statistics Service of the Russian Federation, the number of small enterprises as of January 1, 2008 exceeded 1100 thousand units, and individual entrepreneurs – 3.4 million people. In 2007, trends continued to increase the volume of turnover and investments in fixed assets at small enterprises. The results of the activities of small businesses in 2007 can be considered as positive. It can be stated that the growth trends in this sector have been observed for the past few years. In addition, in 2006-2008, the state policy was activated to create favorable conditions for the development of entrepreneurial initiatives at both the federal and regional levels. Thus, new legislation on the development of small and medium-sized businesses has been adopted, a number of regulations aimed at simplifying the access of small enterprises to financial and property support have been approved. Certain measures are being taken to eliminate administrative barriers.

However, these positive trends in the development of the small business sector can be removed by the impact of both general and specific factors caused by the crisis phenomena in the economy of foreign countries and the Russian Federation recorded in the third quarter of 2008.

The general negative factors affecting the activities of small enterprises include a decrease in liquidity, non-payments, and low investment activity.

Specific factors, in turn, include the following.

Firstly, it is a sharp reduction in access to additional financial opportunities and investment opportunities.

Despite the fact that at the moment the dependence on the banking sector and bank financing of small enterprises, unlike large and medium-sized enterprises, is not very pronounced, the liquidity crisis in the banking sector will reduce the ability of banks to allocate additional loans to small enterprises. As a rule, representatives of small businesses use loans to a lesser extent (compared to larger colleagues) for the implementation of business expansion projects and the creation of new industries. Small business entities use loans mainly to replenish working capital, purchase goods from large manufacturers, wholesalers. In other words, small businesses have a large share (and need) of short- and medium-term loans. However, banks, limited in their resources due to the crisis, will not be able to meet the demand from small businesses for such loans. At the same time, to a greater extent, the impact of the banking crisis will be felt by small enterprises working with small regional banks, which are currently experiencing the most significant difficulties with liquidity and are no longer able to provide loans to the subjects of the MP.

In addition, in conditions of a shortage of funds, branches of large federal and regional banks are likely to tighten requirements for borrowers, including raising interest rates on loans, which will lead to the fact that not all small businesses wishing to obtain a loan and having the appropriate collateral will be able to count on receiving it.

Secondly, it is necessary to pay attention to the high dependence of small businesses on domestic demand. This factor lies in the fact that small business is mainly focused on meeting the needs of the population and enterprises operating in Russia. The share of export-oriented small enterprises is very low. A decrease in effective demand for goods and services of small enterprises will have a significant negative impact on the activities of small businesses. Thus, a reduction in demand will lead to a reduction in working capital, which in turn will force enterprises to cut costs by reducing output, reducing staff, suspending their own development projects and expanding activities.

Thirdly, for small businesses (especially in retail and small wholesale trade, production of building materials), it will become impractical to use the "prepayment for products – shipment of products" scheme when working with large manufacturers and suppliers), since due to the liquidity crisis and difficulty in accessing financial resources, enterprises will not be able to attract borrowed funds. funds for the purchase of necessary goods. This, in turn, will lead to the suspension of the activities of individual small enterprises whose business processes are based on this scheme.

Fourth, crisis phenomena increase the risk of suspension of activities and even the collapse of the infrastructure to support small enterprises. Thus, in the event of a reduction in the activity of small enterprises and their demand for information, marketing, educational and other business services provided by support infrastructure organizations, some infrastructure organizations may cease to exist. At the same time, the activities of only those organizations that specialize in providing financial services to small businesses will continue, for example, microfinance organizations, venture funds, private equity funds, guarantee funds. It is possible that these institutions, in the absence of bank financing, will become the only source of borrowed money for small businesses.

Fifth, crisis phenomena can provoke the departure of small enterprises to the shadow sector. In the absence of funds and effective demand, small businesses will be forced to reduce the scale of their activities. In order to free up additional funds, many enterprises will minimize tax revenues, make maximum efforts to save costs, including hiding their own income. At the same time, in the conditions of the existing tax administration, another risk arises: excessive administrative pressure may be exerted on small businesses in order to maintain the existing level of tax payments from specific enterprises.

In general, it can be noted that due to the existence of crisis phenomena in the economy, small business entities will:

1) freeze all projects aimed at development and expansion (purchase of new equipment, investments in infrastructure, hiring and training of personnel, development of new land plots, opening of new outlets, improvement of management methods, organization of production and sales, etc. are suspended);

2) make every effort to reduce investment and tax expenditures;

3) review the methods of working with contractors (for example, enterprises will refuse prepayment for the purchased goods and make more serious demands on customers to avoid the possibility of non-payments for shipped products)

4) they will increase the attraction of borrowed funds from illegal credit markets (from moneylenders and criminal credit bureaus – "obshchaks") and will stop using credit services of the legal lending market, since access to them will be limited.

Of course, the crisis will not affect all small businesses. The damage from the economic crisis for individual small businesses will not be very strong. Such enterprises primarily include:

• enterprises that produce inexpensive mass-demand products and provide relatively cheap services to the population;
• enterprises producing goods/services with inelastic demand;
• enterprises that do not use borrowed funds in their work;
• companies that have permanent and established relationships with banks that can provide loans at a difficult moment;
• enterprises that have administrative support and work under a state/municipal order.

2. The main painful and vulnerable points of small business

The crisis may cause a significant quantitative narrowing of small businesses, that is, the withdrawal from the market (primarily "into the shadows") of some small enterprises that are forced to temporarily curtail or completely cease their legal economic activities, a reduction in the number of employees at small enterprises, a decrease in turnover and investment in fixed assets at small enterprises.

The analysis of the specifics of crisis phenomena and the specifics of small business allows us to identify the following problematic and vulnerable points of small businesses.

Table 1.

The main existing or possible problems of small businesses are still of a financial nature:

1) lack of working capital;

2) lack of access to bank credit services, both for solving the problem with working capital, and for the implementation of initiated or planned investment projects;

3) lack of free access to loans from state and municipal small business support funds due to the small size of their financial assets and limited budget financing of these funds;

4) a decrease in demand for products, with a constant level of costs, threatens to worsen the indicators of capital turnover, a decrease in the rate of profit and profitability of the business;

5) the risk of non–payments from counterparties - refusal to work with some counterparties, reduced profits, increased risks of "overstocking".

3. Measures aimed at reducing the impact of crisis phenomena on small businessesTo solve these problems and prevent the negative impact of crisis phenomena on the activities of small businesses, measures should be taken to create a financial base for small businesses and reduce the costs of small businesses.

Possible measures aimed at reducing the impact of crisis phenomena on the activities of small enterprises can be:

• measures to increase financial support;
• measures in the field of property support;
• measures aimed at stimulating demand for goods and services of small enterprises;
• measures in the field of information support.

It is necessary to take a number of decisions aimed at increasing financial support for small businesses. Thus, it is possible to increase the volume of lending to small businesses under the programs of state banks (for example, Vnesheconombank), as well as hold a special competition for the placement of state budget funds in non-state banks (lending to private banks), while these resources, in turn, non-state banks will have to spend on expanding lending to small enterprises.

Another measure in the field of financial support may be an increase in funding for small business support programs carried out according to the results of a competition for the selection of subjects of the Russian Federation, whose budgets in 2008 are provided with subsidies to finance activities carried out within the framework of state support for small business by subjects of the Russian Federation. At the same time, additional funds allocated from the state budget can be proportionally divided among the subjects of the Russian Federation-the winners of this competition, and the main emphasis should be placed on increasing the volume of direct financial support for small enterprises and organizations that form the financial infrastructure to support small enterprises, including such measures as subsidizing the costs of small enterprises, the allocation of grants to start-up entrepreneurs, creation and development of microfinance organizations, guarantee funds, investment funds.

Another effective measure in the field of financial support is the creation of new and expansion of existing guarantee funds (surety funds) – special non-profit funds that provide guarantees and liens for small businesses that do not have enough of their own property to fully secure obligations on bank loans. The formation and use of guarantee funds is aimed at simplifying the access of small businesses to credit services of the most reliable credit institutions that place high demands on the financial transparency of borrowers and the economic reliability of funded projects. The experience of creating guarantee funds is available in Moscow, St. Petersburg, Leningrad, Voronezh, Sverdlovsk regions, the Republic of Udmurtia, Khanty-Mansi Autonomous Okrug and other subjects of the Russian Federation. At the expense of the federal budget in 2006-2007, the creation of 23 regional guarantee funds with a total capitalization of 3.3 billion rubles was supported. Guaranteed loans to entrepreneurs in the amount of over 5 billion rubles. It is necessary to continue to create guarantee funds, as well as create conditions for the development of existing funds.

The second group of measures are measures in the field of property support. In conditions of forced cost reduction, rental rates and the price of real estate will remain a significant factor affecting the cost of products and services of small enterprises. Accordingly, a measure aimed at facilitating access to property and reducing the costs of small enterprises may be a reduction in rental rates for non-residential premises and land plots owned by federal, regional and municipal property.

A separate group of measures are special sulfur aimed at stimulating demand for goods and services of small enterprises and import substitution. Here it is necessary to pay attention to the inadmissibility of reducing the volume of federal, regional, municipal orders intended for small enterprises. In accordance with the legislation on the placement of state and municipal orders, the state customer is obliged to place 10-20% of the state order exclusively on togas held for small businesses on a separate nomenclature of goods, works, services approved by the Decree of the Government of the Russian Federation. At the same time, the cost of the order placed at such auctions should not exceed 3 million rubles for works and goods and 2 million rubles for services. In order to attract small enterprises to fulfill the state order, it is possible to increase the upper limit set for the size of the initial (maximum) price of orders. This will allow small enterprises working under government contracts to gain access to additional funds that they could use to maintain and expand their activities, as well as increase interest in participating in public procurement from small enterprises-potential participants in the order. In addition, in order to expand the access of small enterprises to the state order, it is possible to create special electronic platforms that would combine orders intended for small enterprises and placed by various state customers, as well as serve as a means of widely informing small businesses about placing orders for the supply of goods, performance of works, provision of services for state needs, in particular which participants in the order placement are such entities.

The use of import regulation measures for imported goods can also have a certain impact on stimulating demand for goods and services of small enterprises. Such measures may include quotas, as well as the introduction of additional customs duties on goods related to consumption (primarily food).

In times of crisis, it is necessary to pay attention to the implementation of special information events and actions (including the conduct of special seminars, conferences, briefings, posting information on the websites of federal and regional public authorities dedicated to small business issues) aimed at clarifying information:

• about the features of the crisis;
• on the impact of the crisis on the activities of small enterprises;
• about the features of management in a crisis;
• about additional opportunities for small businesses to access financial and property resources.

4. Measures aimed at the development of small business in the conditions of the "crisis"Measures aimed at the development of small business in the context of the economic crisis can be divided into three groups:

• measures in the field of tax regulation;
• measures to reduce administrative barriers;
• measures in the field of personnel support for small enterprises.

Measures in the field of tax regulation may involve the provision of "tax holidays" for newly formed enterprises and industries created as a result of investments in the form of capital investments (for example, temporary exemption from taxes on profits, property, land tax of enterprises operating under the general taxation system, and temporary exemption from paying a single tax of enterprises operating under special taxation regimes).

In order to free up additional funds from small enterprises, it is advisable to reduce the overall tax burden on small enterprises by reducing individual taxes (UST in the first place). In general, tax cuts for small businesses will serve as an incentive to growth and increase production, and will also contribute to the reduction of the shadow sector.

In addition, it is necessary to continue work on the elimination of administrative barriers that hinder the activities of small enterprises. It should be recommended to accelerate the adoption of a package of draft laws aimed at reducing pressure on business by streamlining state and municipal control, replacing licensing with civil liability insurance, limiting the non-procedural rights of the police and ensuring the possibility of replacing mandatory certification with declaration of conformity. First of all, it requires further streamlining of the principles and regulation of the procedure for conducting inspections of small enterprises, reducing the number of control and supervisory measures carried out in relation to small businesses. Real changes must occur not only in ideology, but also in law enforcement practice. In order to streamline the conduct of tax checks, the general procedure for conducting control can be extended to tax control.

In terms of replacing mandatory certification with declaration, the adoption of the relevant law should be supplemented with practical steps to optimize this form of conformity assessment. As a matter of priority, it is necessary to prepare proposals for a significant reduction in the list of certified types of products and clarification of the unified list of products subject to mandatory certification and the unified list of products subject to declaration of conformity.

At the same time, it seems advisable to adhere to the target of reducing the share of products subject to mandatory certification to 50% in 2009-2010 and establish a clear schedule for further reducing the scope of mandatory certification with the consolidation of specific performance indicators of its implementation. Reducing certification costs, which are a serious barrier for small businesses (and certification costs increase significantly for high-value-added products and innovative sectors), will lead to an increase in the available funds of enterprises, some of which can be directed to investments.
[In absolute terms, according to estimates based on the results of independent sample surveys of enterprises and Rostec Regulation data, the total costs of enterprises (with additional calculations throughout the circle) for mandatory certification only within the GOST R system in 2004 amounted to 50 to 85 billion rubles.]

It is also necessary to simplify the access of small companies to the power grid and set low fixed prices for connecting to the power capacities of small enterprises.

Taking into account the release of a large number of labor resources laid off from medium and large enterprises, it is possible to take certain measures to attract these employees to small enterprises and thereby increase labor productivity in the small business segment. Activation of the work of state and municipal employment services with specific small enterprises to employ new employees can play a certain role here.

Portal "Eternal youth" www.vechnayamolodost.ru23.01.2009