Methodological Foundations for Managing Commercial Activities of

Small Businesses

Aleksander Aleksandrovich Popov, Elena Vladimirovna Lapteva

and Aleksandra Vyacheslavovna Kuzmicheva

Orenburg branch of the Plekhanov Russian University of Economics, 50/51-53, Leninskaya Ul./Pushkinskaya Ul.,

Orenburg, Russia

Keywords: small business entities, business management, management principles

Abstract: The article reveals the factors that affect the effectiveness of the management of the commercial activities of

small businesses; gives the legal basis, brief characteristics and advantages of small businesses; considers the

essence, goals, objectives, principles and methods of managing the commercial activities of small businesses;

reveals the content of the main elements of the commercial management process.

1 INTRODUCTION

Currently, the problems of effective management of

the commercial activities of small businesses are

caused by:

1. Business globalization. In these conditions, the

competition of small businesses with large

diversified companies operating, sometimes in

different regions (countries), in many cases

leads to disappointing consequences for small

businesses and even to the bankruptcy of some

of its representatives;

2. The lack of methodological unity in

understanding the essence and content of the

process of managing the commercial activities

of the organization;

3. The neglect on the part of many leaders of

small businesses to the most important aspects

of the organization's commercial activities and

to the vision of the prospects for commercial

development, etc. (Bagiev, 2016).

In Russia, the activities of small businesses are

regulated by Federal Law No. 209-FL dated July 24,

2007 "On the development of small and medium-

sized businesses in the Russian Federation", which

specifies the criteria by which you can determine

whether an enterprise belongs to a small business.

Among these criteria are: the maximum number of

employees of the organization; the maximum amount

of annual income; compliance with the requirements

for shareholders of enterprises.

In some cases, the process of creation of small

business enterprises is greatly facilitated, they are

allowed simplified accounting, they are given

benefits and supported by the government.

2 MATERIALS AND METHODS

Currently, small businesses in Russia are represented

by the following structures:

- joint stock companies;

- limited liability companies;

- individual enterprises that carry out their

production and commercial activities without

forming a legal entity;

- consumer cooperatives;

- farming enterprises.

At the same time, for example, depending on the

number of employees, small business enterprises are

divided into:

- microenterprises with no more than 15

employees;

- small enterprises with at least 16 employees

and no more than 100 employees;

- middle-size enterprises with at least 101

employees and no more than 250 employees.

Among significant advantages of small business

there are: he possibility of self-registration, moreover,

it can be done remotely or in a simplified form; the

possibility of using simplified, including electronic

Popov, A., Lapteva, E. and Kuzmicheva, A.

Methodological Foundations for Managing Commercial Activities of Small Businesses.

DOI: 10.5220/0010697800003169

In Proceedings of the International Scientiﬁc-Practical Conference "Ensuring the Stability and Security of Socio-Economic Systems: Overcoming the Threats of the Crisis Space" (SES 2021),

pages 241-245

ISBN: 978-989-758-546-3

241

document management; exemption from certain

types of scheduled inspections, etc.

The activity of any enterprise does not happen

spontaneously, it is managed by specific people

(managers). The management of commercial

activities contributes to the improvement of the

effectiveness of all commercial and trade processes,

allows to direct the joint efforts of the employees of

the organization in order to achieve the planned

objectives.

Thus, the main objective of commercial

management is the rational use of the available labor,

material, technical, financial and other resources in

the organization to achieve the intended commercial

result of its activities (for example, increasing sales,

obtaining a certain profit, etc.) (Popov, 2019).

Specialists in the field of commerce among the

priorities of modern management of commercial

activities of the organization often include:

1. Study of goal market conditions and

forecasting of market demands;

2. Analysis of existing and potential producers

and resellers;

3. Optimization of procurement activities in the

organization based on the rational selection of

suppliers of necessary products and

establishment of economic relations with them;

4. Development of a system of measures aimed at

improving the effectiveness of the pricing

policy;

5. Analysis of the existing product range and its

rationalization taking into account consumer

demand;

6. Taking effective measures to improve the

organization's inventory management process;

7. Development of measures to improve the

efficiency of the sales process of goods;

8. Improving the quality of the offered services;

9. Search for efficient ways of positioning and

promotion of goods (services), including

advertising and information activities to

implement them and create a positive image of

the organization itself, etc.

3 RESULTS AND DISCUSSION

Commercial management is considered as a specific

type of activity or an integral part of the entire

management system¬ of an organization. Such

activities are closely interconnected with economic,

technological and financial¬ processes. That is why,

when creating an effective commercial management¬

system, it is necessary to find a harmonious

combination of all its elements within the overall

management system.

Successful implementation of commercial

activity management processes is hardly possible

without relying on scientifically based and verified by

modern practice principles¬ and methods of

commercial management.

Recently, such principles¬ of management in the

field of commerce as (Buneeva, 2017) have become

increasingly widespread in the practical activities of

small businesses:

- the principle of reliability of sources of

information necessary for analysis and

management decisions on commercial issues;

- the principle of purposeful aspiration in

achieving the final results of commercial

activities;

- the principle of elasticity in commercial

management, timely adaptation of the system

to dynamically changing environmental

conditions and the requirements of the target

market;

- the principle of objectivity of forecasts and

timely response to possible manifestations of

commercial risks;

- the principle of concentration (focusing) of

efforts on priority aspects of commercial

activity;

- the principle of high responsibility of all

personnel for the fulfillment of their

obligations to ensure commercial transactions;

- the principle of effective coordination

(ensuring the required level of interaction) of

commercial activities¬ with the main activities

of the organization. It should not be forgotten

that commercial activities¬ are formed and

implemented taking into account the interests

of consumers and the needs of the market;

- the principle of complexity in commercial

management, taking into account all factors of

the external and internal environment of the

organization in question in the interests of

developing sound management decisions

aimed at optimizing commercial work, etc.

The methods of management (administrative,

economic and socio-psychological), through which

the impact on commercial processes is carried out,

should not be in dialectical contradiction. They

should be harmoniously combined and take into

account the existing conditions of the functioning of

the organization. The essence of the listed methods is

analyzed in (Popov, 2013).

The specific function of managing the commercial

activities of a small business entity is a continuous

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process of influence of the organization's

management on its personnel. All procedures of

management of commercial activities of the

organization should be reflected in this process.

In its turn, implementation of each management

procedure involves the execution of a certain

sequence of actions (operations) on the part of the

governing bodies, aimed at the formation and rational

use of the organization's resources. The content of the

procedures for managing the commerce of small

business entities is shown in Figure 1.

Figure 1: Procedure of management of commercial

activities of a small business entity

Management procedures of commercial activities

of an enterprise

Study of demand and determination of the needs

for goods

Formation of commercial policy

Expansion of the scope of target markets

Choice of suppliers and establishment of business

relations with them

Management of buy/sell of goods (services)

Stock management

Accounting for handling costs, etc.

Let us describe in detail each procedure for

managing the commercial activities of small

businesses.

The purpose of studying demand and determining

the needs for goods is to identify problems and make

timely management decisions to fully or partially

eliminate emerging problems in order to increase

success in the field of commerce (Zhukova, 2017).

Study of demand may be carried out in two

directions:

- analysis of the group assortment and the overall

level of demand;

- analysis of the intra-group assortment and

quality ratings of consumers.

Information about customer demand is necessary

for the rational formation and timely product

extension.

The analysis of customer demand can be carried

out using various methods. For example, in retail

enterprises, such methods as those listed below are

widely used:

1. Assessment of turnover of goods and stocks;

2. Analysis of realized (unrealized) consumer

demand from the population.

Turnover is an expression of demand that reflects

only the realized customer needs. However, there are

objectively unfulfilled needs, that is, unmet demand,

the main reasons for which are the lack of the

necessary goods on sale, the excessively high price of

the goods, etc.

In order to study the unsatisfied demand, the

following can be used: lists of unsatisfied needs;

control sheets that are filled in by customers; counting

orders for goods that are not available for sale;

holding days of accounting for unsatisfied needs, etc.

Methods of analysis of realized demand include:

continuous statistical survey; sample survey; balance

method (the most used method of demand analysis).

Demand is a form of manifestation of needs in the

market. That is why, commercial organizations

should not only monitor changes in customer

demand, but also actively influence them using

effective marketing techniques (depending on the

current market situation).

The formation of a commercial policy should, first

of all, be aimed at developing correct long-term and

current goals and objectives of commerce, identifying

effective ways to achieve them. Such a policy is

developed taking into account the state of the

commodity market and its characteristics, as well as

on the basis of the formulated general goals, strategies

and real capabilities of the considered small business

entity.

We believe that the main content of developing a

commercial policy for a small enterprise is:

- formulation of reasonable goals and objectives

of commercial activity;

- development of assortment policy (product

strategy);

- formulation of pricing policy (strategies of

pricing);

- development of a policy (strategy) for the

promotion and sale of goods.

The main goal of commercial work is to ensure

the process of product distribution to consumers and

improve the quality of their customer service, taking

into account the established requirements of the target

market.

The main tasks of commercial activity for small

businesses include:

- study of consumer demand;

- increasing influence and penetration into new

markets;

Methodological Foundations for Managing Commercial Activities of Small Businesses

243

- maintaining its position in this market;

- expansion of the product range;

- rational organization and management of the

processes of purchase and sale of goods, etc.

Another procedure for developing the

management policy of small businesses is the

formation of an assortment policy. Its role in the

competitive struggle of rival parties is constantly

growing, since with the increase in the variety of

goods sold on the market that can satisfy the needs of

buyers, the company's competitive position is

strengthened.

The objective of forming a product range is to

establish a balanced product range. At the same time,

the balance of the company's product range becomes

one of the most important requirements. Since

changes in demand lead to the need to adjust the

assortment in order to ensure its balance, there is a

tight connection between demand and the product

range.

In order to carry out effective assortment policy,

it is advisable to pay attention to the rationality of

using the following types of product strategy:

- strategy for the development and introduction

of new products to the market, which involves

a certain sequence of actions, starting with the

development of a commercial idea and ending

with the commercialization of the innovation;

- strategy of product variation, within which it is

possible to modify it, change its individual

properties and quality parameters;

- strategy of elimination or withdrawal of the

good that lost its its competitiveness from the

market.

The goal of formulating a pricing policy and

choosing an effective pricing strategy is to achieve

the organization's planned profit level, to expand

(maintain) the market share by setting optimal prices

for the products sold. A "fair" price contributes to the

maximum attraction of buyers to the goods, forms

stable consumer preferences for both existing and

potential buyers. In the end, a competent pricing

policy allows you to achieve the required level of

return on investment.

The main stages (content) of the process of

formation of a pricing policy by small business

entities are (Popov, 2010):

- carrying out organizational measures to

develop a pricing policy (establishing

responsibility, clarifying the duties of officials,

etc.);

- formulation of objectives, goals and principles

to develop a pricing policy;

- development of a pricing strategy, the order of

actions of the organization in this aspect,

depending on changes in market conditions;

- determination of effective methods of price

competition;

- selection of an expedient method for

monitoring the price situation, etc.

The point of the product promotion process is to

convince potential buyers to make their first purchase

and remind regular customers to make regular

purchases.

The procedure for promoting a product involves

its positioning in the market and the use of effective

means of influence.

Product positioning on the market is ensured

through the use of such marketing techniques as

intensive or passive marketing, selective or wide

market penetration, etc.

The "driving tools" of influence include: "public

relations", advertising, sponsoring, direct marketing,

personal selling, branding, product placement.

Sales as the final procedure of commercial

activity of a small business entity is aimed at directly

providing consumers with the necessary goods

(services). Its goal: formation and maintenance of

rational system of goods movement from the

manufacturer to the consumer. Such a system

involves timely planning and reasonable choice of

ways to sell goods.

In general, a rationally formulated commercial

policy allows small businesses to expand their

influence in the market, find new market segments,

balance the trading range, improve the level of service

to the people.

Expansion of the scope of target markets involves

searching for new sales markets in order to increase

sales. There are several ways to achieve this goal:

- capture of new segments in the existing market;

- extension of the scope of small business entities

to other regions;

- search for new channels of distribution;

The correct choice of suppliers and the

establishment of economic ties with them allows a

small business to carry out mutually beneficial

commercial transactions and trade operations related

to the purchase and sale of goods, as well as to form

and maintain the required level of product assortment.

At the same time, the reliability of economic relations

depends on the ability of the interacting parties to

strictly comply with their contractual obligations.

The process of managing buy/sell of goods

(services) consists in the implementation of

commercial operations (transactions), commodity-

money exchange with suppliers and consumers and in

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SOCIO - ECONOMIC SYSTEMS: OVERCOMING THE THREATS OF THE CRISIS SPACE"

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the sale of goods and services provided in the target

market. At the same time, purchasing activity is

becoming one of the most important commercial

functions, the essence of which consists in purchasing

goods that are intended for the subsequent sale.

Effective organization of procurement activities

by a small business entity allows to significantly

reduce commercial risks (Ivanov, 2016).

An element of commercial work is also the sales

service and provision of additional services to clients.

The provided services accompany the process of

purchase of goods and can include after-sales service

of the sold goods. It is necessary to pay special

attention to the quality of provided services and the

prospects of their diversification in customer service.

Inventory management contributes to the solution

of an important commercial¬ problem: the formation

and maintenance of the range of goods at the proper

level in order to meet customer demand.

Inventory management¬ involves: determination

of the optimal size of the inventory; operational

inventory accounting and effective control over their

condition; regulation of inventory at the enterprise.

The need for inventory management¬ is due to the

fact that the demand for goods is influenced by

many¬ factors. Therefore, there are errors¬ that take

place, which lead to the formation of surplus or lack

of the inventory, which is undesirable. When there is

the surplus of goods, the organization's¬ costs for

their storage, lending, etc. increase. Shortage of

inventory leads to unsatisfied customer demand and,

as a result, to a deterioration in the economic¬

condition of the organization.

Accounting for the costs associated with

commercial activities is the basis for the commercial

success of a small business entity and is determined

by the ratio between expenses and income received

from commercial activities. And this, in turn, is

associated with mutually beneficial transactions, with

the competence and enterprise of the organization's

leaders.

4 CONCLUSIONS

Thus, small business is a part of entrepreneurial

activity, which is based on small organizations, small

enterprises that are not formally included in any

associations.

Management of the business activities of an

organization is quite a complex process that can

create many problems for small businesses if there is

insufficient attention to it on the part of entrepreneurs.

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