PROVIDING THE DEVELOPMENT OF SMALL BUSINESS AT THE BEGINNING OF THE LIFE CYCLE: THE RETURN CAPITAL AND SOURCES OF ITS FORMATION

Abstract

An important problem for small businesses in the early stages of the life cycle is the scarcity of resources due to excessive riskiness and low profitability of small business entities at the stages of their startup and development. The article defines the essence of the concept of the life cycle of the enterprise and generalizes the thoughts of scientists regarding the phasing of the life cycle. A brief description of each stage (creation, growth, stabilization, restoration or decay) is provided. The sources of ensuring the development of small business entities, their accessibility and features of attraction at each stage of the life cycle are considered. The characteristic features of management models, organizational structure and mechanisms of financial support for each stage of small business development are presented. The emphasis is placed on the priority of start-up capital in ensuring the activity of small business in the early stages of development and it is determined that the main sources of full self-financing are: authorized capital, share, reserve, additional capital and retained earnings. Interconnection of stages of the life cycle and target benchmarks of the use of equity capital of small business entities is proved. The following characteristic advantages of attraction of own capital over other sources of development of development as the irreversibility of funds are determined; independence in making decisions about use; unlimited period of staying at the disposal; financing of risky investments, which lenders do not agree on. It has been determined that in the conditions of the unstable economic situation in the country and the imperfections of the Ukrainian legislative framework in the field of regulating small business, the use of profits and depreciation deductions as the main source of development support is currently problematic.