Overview of modern digital practices for small business management

Prygunova Mariya Igorevna ORCID: 0000-0003-4290-6487 PhD in Economics Leading Researcher of the Department of Qualitative Research of GBU "Center for Advanced Economic Research of the Academy of Sciences of the Republic of Tatarstan", Associate Professor of the Department of General Management of Kazan (Volga Region) Federal University 420111, Russia, respublika Tatarstan, g. Kazan', ul. Karla Marksa, 23/6, of. 1004 mariya.prigunova@tatar.ru Other publications by this author

Tumakov Il'yas Kamilovich Student, Department of General Management, Kazan (Volga Region) Federal University 420111, Russia, respublika Tatarstan, g. Kazan', ul. Butlerova, 4 iktumakov@stud.kpfu.ru

IntroductionOne of the most important components of the market economy is small business.

The development of small businesses contributes to economic growth, reducing unemployment and saturating the markets of the economy as a whole. A large number of subjects of small enterprises increases competition between them, which is why each subject tries to increase competitiveness and take the most advantageous position for itself. Therefore, the application of various business management strategies is especially important for a small enterprise. Management needs to choose one or even several strategies that ensure the survival of the company in a tough competitive environment ^[1].Federal Law No. 209-FZ of July 24, 2007 "On the Development of small and Medium-sized businesses in the Russian Federation" provides a single definition for small and medium-sized businesses.

The Law states that small and medium-sized businesses are business entities (legal entities and individual entrepreneurs), classified in accordance with the conditions established by this Federal Law, to small enterprises, including microenterprises, and medium-sized enterprises, information about which is included in the unified register of small and medium-sized businesses ^[2].

Small business is one of the most complex and interesting socio-economic phenomena in science. At the same time, its importance cannot be overestimated, since small and medium-sized entrepreneurship is the leading sector that determines the economic growth rates of the region and the country as a whole, as well as the structure and quality of the gross national product ^[3].  In the current socio-economic conditions, small entrepreneurship is a key factor in social development and ensuring a consistently high level of employment of the population ^[4].

In the digital world, the main advantage of any enterprise is not its possession of a sufficient number of production factors, but the timely receipt of reliable and up-to-date information. Information in the global world is the main resource on the basis of which an enterprise must competently, rationally and timely make management decisions. That is why organizations, especially small businesses, should implement the most advanced and innovative management and control methods in their activities ^[5].

In 1996, the first popular science book dedicated to the concept of digitalization of the economy was published, the author of this work is Nicholas Negroponte, who in his work presented his proposals for the development of digital technologies and their further possible application ^[6].

The main partThe introduction of digital platforms and business models has formed the basis of sustainable competitive advantages by reducing costs and providing a better quality of "consumer experience".

While in 2018, companies that implemented digital transformation accounted for 16.6% of global GDP ($13.5 trillion), by 2023, their contribution is projected to be more than half ($53.3 trillion). Such potential benefits encourage businesses to use digital technologies more actively. It is expected that only the introduction of artificial intelligence in key sectors of the economy and social sphere will give an increase in value added from 3.5 to 5.8 trillion dollars ^[7].As part of the implementation of Decrees of the President of the Russian Federation dated May 7, 2018 No. 204 "On national goals and strategic objectives of the development of the Russian Federation for the period up to 2024" and dated 07/21/2020 No. 474 "On National Development Goals of the Russian Federation for the period up to 2030", including in order to solve the problem of ensuring accelerated introduction of digital technologies in the economy and social sphere, the Government of the Russian Federation has formed the national program "Digital Economy of the Russian Federation" approved by the minutes of the meeting of the Presidium of the Council under the President of the Russian Federation on Strategic Development and National Projects dated June 4, 2019 No. 7 ^[8].

The main obstacles to the digitalization of medium and small businesses in Russia are the disinterest of company managers in the transition to digital format and the lack of funds for the introduction of digital technologies. This conclusion was made as part of a study conducted in 2019 by Otkritie Bank, Google, Mail.ru Group, the Moscow School of Management Skolkovo and RAEC, its operator was the Analytical Center NAFI. The first reason was indicated by 21%, the second by 20% of entrepreneurs interviewed during the study, in total, 580 senior employees of enterprises were interviewed during the All—Russian representative survey.

Also, among the advantages of digitalization, 34% of respondents indicated the convenience of controlling processes, and 33% — an increase in the speed of work. Despite the difficulties, 92% of entrepreneurs believe that digitalization gives business advantages ^[9].

A year later, a similar measurement of the business digitalization index was carried out, and it is equal to 50 points on a scale from 0 to 100 – this value has been maintained since February 2020. At the same time, 8% of companies in Russia as a whole have a high level of digitalization. Among medium–sized businesses, this share reaches 20%, among sole proprietors and micro–companies - 7-8%, among small enterprises - 17% ^[10].

Throughout 2021, many small businesses had to overcome enormous difficulties in order to continue their activities.  This year has become one of the most difficult for small businesses in history (Figure 1).

Figure 1 – Number of registered small business entities in Russia, units ^[11]

From this figure, it can be seen that the number of registered subjects of small structures in Russia during the study period has been constantly decreasing. In 2021, the smallest number of successfully functioning small-format enterprises was recorded, which amounted to 212,429 units, which is 21.34% less than in 2015.

Since the beginning of the pandemic, small businesses have faced a number of problems. Figure 2 shows the main ones.

Figure 2 – Small business problems since the beginning of the pandemic, % ^[12]

Many business owners say that the COVID-19 crisis has led to a loss of income (23%), while others complain about budget cuts (11%) and temporary closure (11%). Some enterprises had to reduce the salaries of their employees (10%).

Businesses seeking to recover from the pandemic should take into account new small business trends that are likely to persist. To fulfill this requirement, small business owners can take advantage of the listed areas of development, because continuous improvement helps the enterprise to function stably and successfully, increasing its key indicators.Researchers note that big business in Russia is actively engaged in digital transformation, but small and medium-sized businesses are not yet fully aware of the benefits of the digital economy for business processes, and also do not understand what place it occupies in the state program of digitalization of the economy.

Modern small business management tools include a large number of advanced technologies, consider the most common of them:1. Customer relationship management tools.

CRM programs can track almost every detail of the business that happens between a company and its customers, from their billing address to their preferred delivery day. CRM systems were first developed for large businesses with large sales departments, but now these systems are also available for small businesses. 

2. Cloud collaboration tools. Over the past decade, enterprises have realized that it is easier and cheaper to store information necessary for doing business on the Internet than on their own servers. This use of the Internet has become known as "cloud computing" or simply "cloud storage". If Gmail is used for email or files are stored on Google Drive, then the company's data is already in the cloud. Quickbooks offers accounting software that does not need to be installed on your computer, it has a version in the cloud. Newer accounting software such as Freshbooks and Xero are designed for cloud computing only. 

3. Electronic billing tools. Electronic billing tools can be used from a computer, tablet or smartphone, and many of them are based on cloud technologies, for example, an online checkout. This allows employees to send an invoice from the work site at any time, which reduces the time spent on interacting with counterparties. Electronic billing tools offer different options for small businesses and allow customers to send payments directly to the bank or through a specialized electronic payment system.

4. Social media management tools. Today, social networks are one of the platforms for promoting the company's products, finding new customers, increasing awareness and monitoring demand. There are many free or inexpensive social media management tools, such as Hootsuite and Buffer. Many of the best social media management tools are free at the level of use and most common in small businesses ^[13].

There are also specialized software for managing a small enterprise, which includes many controlled processes, namely:

1. Marketing. Small business marketing software can multiply the results of an ordinary marketer with the help of powerful tools that provide a deep understanding of customer data, which ultimately leads to an increase in potential and regular customers.

2. Accounting. If a small business manager needs to track transactions and the movement of incoming and outgoing money, modern accounting software and tools will help a small enterprise in this. With the help of such programs, it becomes possible not to keep an accountant on staff, the business owner will be able to generate all the necessary reports himself.

3. Project management. The main purpose of project management tools is to monitor teamwork and achieve an optimal level of productivity. Project management software and tools provide small businesses with services to ensure a balanced workload for teams and allow them to complete tasks at the appointed time ^[14].

In the modern era, the concept of virtual workplaces and remote work is developing. Small business programs guarantee that the entire organization of the company will be synchronized, and the company's activities as a whole will be effectively optimized ^[15]. This fact is confirmed by the analysis of existing programs both for very small companies that are just starting their activities, and for businesses that have decided to start scaling.

ResultsAs part of the study, the classification of the most common software products for small businesses with the possibility of obtaining a free or shareware trial version was carried out.

  Programs that are currently unavailable on the territory of the Russian Federation are excluded from the study. The results are summarized in table 1.Table 1 - Popular Small Business Management Software*

*compiled by the authors

 Another tool for small businesses is currently the Zoom video conferencing application, which is often used in the educational process or as part of interpersonal interaction. This program provides small businesses with the opportunities and means to conduct online meetings and webinars using video conferencing software built directly into the main messenger. The free Zoom plan allows you to hold an unlimited number of meetings in which up to 100 people can participate with a 40-minute limit.Conclusion

Based on the review of modern ideas about the state and problems of small business, we have once again confirmed the need to focus the attention of small business leaders on advanced management practices using digital technologies.

  The introduction of digital platforms and business models can form the basis of sustainable competitive advantages by reducing costs and improving quality. However, the disinterest of company managers in the transition to the digital format and the lack of funds for the introduction of new technologies may continue to restrain their development.Thus, having considered modern tools for managing a small enterprise, we can conclude that small business does not lag behind large ones in the possibilities of using advanced technologies for managing business processes.

To ensure a competitive advantage, rapid and stable development of the company's activities, it is necessary to switch to digital management. The table above contains a significant number of applications and programs, including from domestic developers, which can be used in small companies. In addition, due to the fact that small enterprises employ a small number of employees, such companies can use free or shareware programs as part of their activities. For small enterprises, there are many such approaches and tools based on the effective management of the firm, both foreign and Russian analogues.