THE STATE AND CHALLENGES OF BUSINESS ENVIRONMENT FOR SMALL BUSINESS ENTITIES

Abstract

Small business entities are an important pillar of contemporary economies in terms of contributing to employment, income, innovation, and economic diversification. Quality of the business environment determines the performance and sustainability of small businesses. This paper presents an overall assessment of the current state of the business environment for small business entities and examines the major challenges to their development. The paper specifically analyzes a number of institutional, legal, financial, infrastructural, and socio-economic factors that condition small business operations. Based on descriptive, comparative, and analytical research methods, the paper evaluates existing regulatory frameworks and government support mechanisms. The article finds that although several reforms have been continuously pursued to improve the business climate, small business entities still face significant barriers, including limited access to finance, regulatory complexity, administrative burdens, and poor infrastructure. Some policy-oriented recommendations are given that might improve the business environment and foster sustainable small business development.