ACADEMIC RESEARCH IN MODERN SCIENCE
International scientific-online conference
147
ECONOMIC SUSTAINABILITY OF SMALL BUSINESSES: PROBLEMS
AND SOLUTIONS
Juraboev Haliljon Xamidjon ugli
Management Development Institute of Singapore in Tashkent lecturer,
Namangan State Technical University researcher
ORCID: 0009-0003-5316-7955
e-mail: juraboevhaliljon@gmail.com
phone: +998-93-596-05-94
https://doi.org/10.5281/zenodo.15752857
Abstract:
This article provides an in-depth analysis of the problems of
economic sustainability of small businesses (SBEs). The importance of SBEs in
the national economy, the main difficulties associated with them, and the
proposed measures for sustainable development are discussed. The analysis was
conducted on the basis of previous studies, statistical data, and world
experience. At the end of the article, effective mechanisms for supporting small
businesses were proposed.
Keywords
: small business, economic sustainability, business problems,
financial risk, government programs, foreign experience.
Introduction
. Small businesses (SBEs) are one of the main engines of
economic development of each country. They play a major role in attracting
labor, transferring tax revenues, introducing innovations, and strengthening the
local economy. At the same time, SBEs often face important financial,
management, competitiveness, and legal issues. This leads to the destruction of
their economic stability.
Today, factors such as global economic uncertainty, pandemics, geopolitical
crises are further complicating the activities of CSOs. Therefore, scientifically
based approaches are required to ensure their sustainable development.
The importance of small business entities
. Small business entities are
businesses that have a small number of employees, operate with limited capital,
and can control rapid financial flows. Their economic stability is directly related
to the overall stability of the country. For example, in the United States, small
businesses account for approximately 44% of GDP and create 60-80% of new
jobs (U.S. Small Business Administration, 2023).
The importance of small businesses in Uzbekistan is also growing.
According to the resolutions adopted by the President of the Republic of
Uzbekistan in 2023, in accordance with the National Plan for the Development of
Small Business and Individual Entrepreneurship, it is planned that small
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businesses will contribute 35% to GDP (Entrepreneurship Development Agency
under the Prime Minister, 2023).
The concept of economic stability and its importance.
Economic
stability is the ability of an organization to withstand external economic factors,
ensure a constant sufficient level of income, and be protected from financial
risks. In other words, a sustainable business is an organization that has the
ability to continuously make a profit and is able to survive in changing
conditions (Sharpe, 2021).
For small businesses, sustainability means, first of all, financial stability,
that is, the ability to repay debts to the bank, maintain sales volumes, and find
investment.
Key problems
1. Financial constraints
The most common problem is the lack of sufficient financial resources.
Small business owners find it difficult to get loans from banks because they
cannot provide guarantees. Also, the process of getting loans from banks is
complicated, and documentation takes a lot of time (Tadjibaev & Khudaiberdiev,
2022).
2. Lack of financial knowledge
Many small business owners have difficulty in correctly compiling financial
calculations and controlling income and expenses. As a result, they make
financial mistakes. Due to lack of financial knowledge, the business cannot
achieve stability (Karimov, 2021).
3. Lack of competitive tools
Small businesses remain in direct competition with large enterprises, but
have little experience and resources in the field of marketing, advertising, and
brand creation. This weakens their position in the market (Ahmedov, 2020).
4. Uncertainty of the legal environment
Legal uncertainties, changes in the taxation procedure, and inspections that
occur during the implementation of business activities add additional pressure
to small businesses. In many cases, businesses are forced to close due to this
uncertainty (Khojiyev, 2021).
5. Inadequate government programs
In some cases, the programs provided by the government to small
businesses are not effective enough. The process of providing financial grants
and subsidies is formalized, but practical results are lacking (Bukhoro
Usmonova, 2022).
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Solutions
1. Expanding access to finance
It is necessary to provide small businesses with affordable sources of
finance. This problem can be solved by developing microfinance institutions,
introducing special credit programs for small businesses, and introducing
mechanisms for providing unsecured loans.
For example, the South Korean "Small and Medium Business
Administration" system is known worldwide for providing financial assistance
to small businesses (OECD, 2022).
2. Improving financial literacy
It is necessary to introduce training programs for small business owners on
financial
management,
accounting,
and
budgeting.
Establishing
entrepreneurship schools in cooperation with local authorities and higher
education institutions will also yield good results.
3. Developing a marketing strategy
It is necessary to provide small businesses with advice on creating a brand,
advertising on the Internet, and being active on social networks. It is also
important to promote local tourist products and help local brands become more
integrated.
4. Improving the legal environment
It is necessary to simplify the business environment by simplifying the
processes of taxation, registration, inspection checks, and introducing e-
government systems.
5. Improving state support mechanisms
It is necessary to develop clear, transparent, and easily accessible programs
to support small businesses. Business sustainability will be strengthened by
reducing grants, subsidies, and tax restrictions.
Conclusion.
Thus, the economic sustainability of small businesses is a
critically important issue for the stability of the country's economy. In today's
modern conditions, small businesses face many problems: financial constraints,
lack of competitiveness, legal uncertainties, and lack of financial knowledge.
However, there are solutions to these problems: strengthening the microfinance
system, increasing financial knowledge, improving marketing strategies,
improving the legal environment, and improving state programs.
Let's support the sustainable development of small businesses through
business community, government and international cooperation. Because
sustainable small business is the foundation of a sustainable economy.
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References:
1.
U.S. Small Business Administration. (2023). Facts & Data .
https://www.sba.gov
2.
Entrepreneurship Development Agency under the Prime Minister. (2023).
National Plan Documents.
3.
Sharpe, A. (2021). Economic Stability and Sustainable Development .
Journal of Business Economics.
4.
Tadjibaev, S., & Khudaiberdiev, J. (2022). Financial Problems of Small
Businesses and Ways to Solve Them . Journal of Economics of Uzbekistan.
5.
Karimov, A. (2021). Fundamentals of Financial Management for Small
Businesses . Tashkent: Fan.
6.
Ahmedov, R. (2020). Marketing in small business development .
International Journal of Entrepreneurship.
7.
Khojiyev, N. (2023). Legal environment for SMEs in Uzbekistan. Law and
Business Review.
8.
Bukhara Usmonova, G. (2022). State support mechanisms for SMEs in
Central Asia. Central Asian Economic Journal.
9.
OECD. (2022). Supporting SMEs in South Korea. OECD Publishing.
