Статья:

Characteristics of business and entrepreneurship

Журнал: Научный журнал «Студенческий форум» выпуск №14(150)

Рубрика: Экономика

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Babenko A. Characteristics of business and entrepreneurship // Студенческий форум: электрон. научн. журн. 2021. № 14(150). URL: https://nauchforum.ru/journal/stud/150/90318 (дата обращения: 11.08.2022).
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Characteristics of business and entrepreneurship

Babenko Alena
Student, Belgorod State National Research University, Russia, Belgorod
Bogachev Roman

 

Abstract. This article compares the concepts of «Business» and «Еntrepreneurial activity», highlights and describes their characteristic features and advantages. The author gives a generalized description of these two concepts and touches on the history of their origin.

 

Keywords: entrepreneurial activity, individual entrepreneur, legal entity, entrepreneurship, market economy, business, profit making, modern economy.

 

Essence of the concept of entrepreneurship.

The term ‘entrepreneur’ appeared in the 8th century. Adam Smith defines an entrepreneur as an owner who takes economic risk with the aim of implementing a commercial idea and making a profit. Entrepreneurship is a free management in various fields of activity in order to satisfy the need for products, work and profit for the self-development of the enterprise and its relationships with partners and budgets. Entrepreneurship is one of the most important components of the modern economy. In the countries of market economy, entrepreneurship has become widespread and constitutes the overwhelming part of all forms of organizations.

Over the past ten years, millions of entrepreneurs and property owners have appeared in Russia. In connection with the privatization, only a part of organizations and enterprises remained with the state, and the rest passed into private ownership. The bulk of Russian entrepreneurship is small and medium-sized businesses. The main task of an entrepreneur is enterprise management, which includes the rational use of resources, the organization of the process on an innovative basis and economic risk, as well as responsibility for the final results of their activities.

The social nature of entrepreneurship means not only the activities of the agents participating in it, but also the presence in the public economy of certain conditions that make it possible to realize the functional characteristics inherent in entrepreneurship. The totality of such conditions constitutes an entrepreneurial environment, the most important elements of which are economic freedom and personal interest. The transition to a market economic system is a transition to an entrepreneurial economy. The creation of conditions for the development of entrepreneurship is the most important component of the transformational changes in the transitional economy. In this regard, the identification of essential features and patterns of entrepreneurship development is extremely important.

What does the word ‘business’ mean?

Business and entrepreneurship are one of the main elements of a market economy, without which the state cannot develop intensively. Entrepreneurship and business affect the rate of economic growth of the state, the volume, structure and quality of the gross national product. Recently, these concepts began to mix and lose their original meaning. One of the most common definitions today says that a business is any activity that is aimed at making a profit and is carried out by selling goods and services in demand.

However, there are other concepts of business, for example: business is an entrepreneurial activity that is carried out by subjects of a market economy and government agencies at the expense of their own or borrowed funds under their own responsibility and the main goals of which are the development of their own enterprise and making a profit.

Entrepreneurship or entrepreneurial activity is an independent activity of citizens and their cooperatives, which is associated with risk and is carried out under their own responsibility, aimed at generating income from the sale of goods, the use of property, the performance of work or the provision of services by persons, in accordance with the law.

The difference between ‘business’ and ‘entrepreneurship’.

Since these concepts are equivalent, it is difficult to separate ‘business’ and ‘entrepreneurship’, however, of course, there are differences. According to the size of its implementation, business, as well as entrepreneurial activity, is divided into large, medium and small. They differ significantly in the size of fixed assets, and in production volumes, and in financial and labor resources. Big business is one of the foundations of the modern economy, and small and medium-sized businesses are an important indicator of its development and condition. Entrepreneurship presupposes your own business, since it is the basis of business. In turn, own business is associated with the danger of losing it and losing the spent intellectual and material resources.

Successful business and entrepreneurship.

For the intensive development of business and entrepreneurship, certain conditions and factors are necessary: ​​

1) creative ideas, personal interests, benefits, entrepreneurial ability;

2) the likelihood of market expansion or the existence of free market space;

3) the possibility of increasing profits;

4) the introduction of innovations, the ability to use resources economically;

5) the ability to predict crisis situations and ways to resolve them.

An individual entrepreneur is a citizen who has decided to conduct entrepreneurial activity without forming a legal entity and registered in the prescribed manner. An individual entrepreneur is responsible for his obligations with all property belonging to him, that is, by a court decision, foreclosure can be levied on all property, except for the property on which, in accordance with the law, foreclosure cannot be levied. The founder of a legal entity (LLC and JSC) bears property responsibility only within the limits of the contribution made to the authorized capital of the company.

The advantages of individual entrepreneurship

The main advantage at the moment is a simplified procedure for registering and terminating the activities of an unincorporated business. In second place is the simplified system of accounting and tax accounting. Accounting is carried out in the book of accounting of income and expenses by the boiler method, that is, in fact, no special accounting education is required. Thirdly, a legal entity can also switch to a simplified taxation and reporting system if it is a small business entity. The tax burden for an individual entrepreneur is relatively light compared to the traditional taxation system for legal entities.

Who can become an individual entrepreneur?

An individual entrepreneur has the right to use the labor of other citizens in his activities, but only by involving them on the basis of civil contracts (work contracts, paid services, etc.). Engaging in entrepreneurial activity is included in the total length of service, which gives the right to receive a pension. Any fully capable citizen can become an individual entrepreneur, that is, a minor who has reached the age of majority or an emancipated minor from the age of 16. The exception is civil servants, as well as military personnel. Persons with limited legal capacity (alcohol or drug abusers, as well as minors between the ages of 14 and 18) can engage in entrepreneurial activity only with the consent of their legal representatives. Foreign citizens and stateless persons permanently residing in the territory of the Russian Federation, that is, having a permit for this and a residence permit issued by the internal affairs bodies, have the right to obtain the status of an individual entrepreneur and engage in entrepreneurial activity at the place of permanent residence. A citizen has the right to engage in entrepreneurial activity without forming a legal entity only from the moment of state registration as an individual entrepreneur.

 

Literature: 
1. Course of Economics: Textbook 2nd edition, revised / Ed. B.A. Raizberg. –M.: Infra-M, 1999.–716s. 
2. Course of economic theory: general foundations of economic theory. Microeconomics, Macroeconomics, Transitional Economy: Textbook / Head of the team of authors and scientific editor Professor A. V. Sviridovich – M .: Moscow State University. M.V. Lomonosov. Publishing house DIS, 1997. – 736s.