Today, working "for uncle" is considered almost a bad manners. Lots of people have recently been thinking about starting their own business in order not to depend on orders from above, to control their own workload, and just to do what is really interesting. At the same time, business is in any case risks, which, however, can be minimized by knowing the basic principles of entrepreneurship.
Entrepreneur
Before proceeding to the specific rules and norms that govern one's business, one should give a definition of who, in principle, can be considered an entrepreneur. To begin with, a business can have both a legal (organization) and an individual (specific citizen) person. This person is obliged to engage in economic activities: to produce or sell goods, perform some work, provide services. Moreover, this activity should be the main occupation, and its main goal is to make a profit.
Well, of course, a person who is engaged in such activities should be legally registered in the appropriate status. Separately, it is worth noting that military personnel and officials cannot have their own business.
An entrepreneur can provide his organization with hired workers (this category includes people working for a commercial organization and receiving income for fulfilling certain obligations within this organization). And to start a conversation about what the basic principles of entrepreneurship are, it follows from the main thing: any businessman works to meet the needs of customers in a particular product.
Terms of business
It's time to move on to what conditions and principles of entrepreneurship exist. Let's start with the first one.
All the conditions that arise in a particular market are divided into several groups. Geographical conditions are not regulated by the entrepreneur himself. These include the nature and climate of the region where activities are carried out, the availability of resources, the availability of infrastructure - both logistics and the use of labor depend on all these factors (after all, throwing all workers to production where there are no suitable conditions for the implementation of a particular product, at least illogical).
The next group is technological conditions, that is, the enterprise is provided with the necessary equipment, which allows to increase labor productivity and reduce labor costs. Socio-cultural conditions are any changes in the needs of society, such as quitting smoking in some regions of the world because of an interest in a healthy lifestyle: such changes have led to a decrease in the share of tobacco factories in the general market.
Speaking about economic conditions, it is necessary to note the purchasing power of the population (what and how much people can get), the level of employment, and the tax policy of the country, in addition, here you should talk about all the institutions that directly or indirectly support business: banks, procurement markets, consulting companies and so on.
And perhaps the most important group of conditions is legal. This includes all laws and regulations in any way relating to business.The entrepreneur in his freedom of action depends entirely on state policy: it is the government that creates the rules for doing business, and the investment climate, and regulates the tax policy, therefore, it is impossible to ignore such factors in any case.
Freedom and Planning
Well, now is the time to do business principles. Fundamental is the principle of freedom of enterprise, according to which a person can engage in any activity that does not contradict the law. In addition, the businessman himself can make any economic decisions, without depending on anyone. The next important principle is planning. An entrepreneur should have at least the slightest idea of how his brainchild will develop further, drawing up business plans for better planning. This form of forecasting your own activities will help to calculate possible risks and avoid them.
Modernization, mobility and commitment
Businessmen are also interested in improving the quality of their products, for this they are forced to invest in scientific and technological research - the more modern the equipment, the better the product is output, in addition, the latest developments can reduce labor costs, which positively affects the price of the goods: its cost is gradually is shrinking. The one who ignores the principle of mobility - the need to quickly adapt to changing market conditions and the needs of customers, will not stay on the market. Any businessman should be able to make changes to his product, modernize production, and reorient to another market in the shortest possible time. And perhaps the key principle of entrepreneurship is a personal interest in profit, without it, I must admit, few will continue to do their own thing.
Business regulation
As mentioned above, entrepreneurship is always within the law (unless, of course, this is a legal activity), hence it is logical to assume that there are certain principles for regulating entrepreneurship. State intervention in entrepreneurship is carried out by several methods. The first of these is an autonomous approval solution. According to him, the entrepreneur initially makes any decisions regarding his business, but as soon as he enters into a deal with another business entity, he is obliged to listen to his opinion on this issue.
The next way is mandatory regulations: the state imposes certain rules that are mandatory for implementation (for example, deduction of a share of profit in the form of taxes to the budget). The third option is the recommendation method, in which the entrepreneur receives some advice on conducting his own business or relations with the state (for example, the recommendation to purchase raw materials from some state-owned enterprise, rather than contact a third party). And the last one is the prohibition method, in the framework of which the government prohibits certain actions for the businessman (the same trade in arms or drugs).
Free enterprise
An economy based on the principles of free enterprise is the dream of many businessmen. In fact, no other country in the world can offer something like this: in any case, their own business will be regulated to some extent by law. The principles of free enterprise include such concepts as freedom of business (discussed above), freedom of competition and the absence of monopoly (still exist on the market when one company owns its main share, and this company can impose its own rules for doing business , not very comfortable).
Any manifestations of a monopoly are considered by the antimonopoly committees, by which a monopoly enterprise may be forced to reduce its market share), as well as the legal equality of all forms of ownership (it does not matter if there are specific premises, for example, the lease or the entrepreneur owns them, the laws apply to they are the same).
Entrepreneurship development
It is worth noting that the principles of entrepreneurship are darkly associated with the previous group of principles. Economic freedom is the main condition for successful activity in the market, otherwise your own business will not be any different from such “uncle” work hated by many. The problem is that many entrepreneurs are faced with the fact that some sectors of the economy are monopolized by the state, such as the production of alcohol or tobacco products. You can’t reach for such monopolies even through the Antimonopoly Committee. A huge role in the development of business is played, as already mentioned, by legal regulation.
It is the state that can establish such laws under which entrepreneurship will only incur losses (for example, an obligation to pay a fixed tax regardless of profit). Of course, today there are tendencies for government assistance in small businesses, for example, providing subsidies, legal support, “tax holidays” for foreign investors (this is the name of the time during which the investor can not pay taxes for creating jobs in the country) . Simply put, the principles of development gather rules from almost all groups of basic principles.
Features of small business
In terms of volume, entrepreneurship can be divided into small and large. If the second category is still more or less clear, then what are the basic principles of small business, which sometimes because of its small size cannot compete on equal terms with leading organizations? It is worth noting that small business has its own regulation rules, which, of course, overlap with the generally accepted, but still having some differences.
The state is trying to support this category of entrepreneurs by helping to develop infrastructure, by introducing certain benefits for businessmen working in sectors of the economy necessary for the country (for example, those who work in the agricultural sector are sometimes compensated for the costs of developing the farm sector), by creating databases from which all market participants can obtain information about potential partners, suppliers and likely markets.
Additional Benefits for Small Businesses
Small business has a simplified system of taxation and accounting, certain advantages when it acts as a supplier of raw materials for state enterprises and other bonuses from the state that spur its development. Thus, sometimes having your own business, despite all the possible risks, is much more profitable than just working for the state or a certain company. This is confirmed by numerous principles of entrepreneurship.
Business organization
And what do the principles of business organization mean by themselves? One of the main ones is economic independence in the field of finance, that is, the enterprise independently manages its own financial resources. The financial correlation of terms is darkly connected with this principle - a minimum amount of time should pass between using the funds and making a profit from them. Any financing, according to the principle of minimizing financial costs, should occur at the lowest financial costs.It is impossible to imagine the principles of entrepreneurship without material liability - each businessman is responsible for the results of his activities both to the client and to the state, in addition, the entrepreneur is obliged to pay on time for his loans, pay the work of suppliers, pay wages - that is, support not only the consumer, but also all those who are employed in this enterprise.
The company must have certain financial reserves, that is, additional funds in case of risks that can keep the business afloat. And, of course, one of the main principles of the organization is rationality - investing should bring more income than the amount of capital invested in the enterprise, while the risks should be minimal.
Conclusion
The principles of entrepreneurship - this is a certain set of recommendations, guidelines, obligations to conduct their own business. Based on them, it is clear that starting a business is not so difficult. The main thing is to keep it in the market. And rely in this difficult matter again on the principles of entrepreneurship.