Importance The Russian small businesses demonstrate an insufficient competitive ability since many entities have to tackle their current financial difficulties standing on the edge of survival, rather than activating their efforts and attempts for strategic development and production expansion. It is the value management process that identifies alternative approaches and determines which of them ensure the effectiveness of a small business and therefore high market value. This research focuses on strategic business management in a constantly changing environment. Objectives The objective of the research is to identify how financial indicators influence the value of small businesses. Methods The methodology comprises the formation of a financial mechanism for effective operation of small businesses. The mechanism includes a logical arrangement of an adaptive system of corporate finance management designated to increase market value. Using econometric methods, we devise techniques for calculating each of the proposed financial indicators. Based on the financial indicators, we formulate conditions for sustainable development of small businesses. Results The article indicates that corporate value measurement is needed in various circumstances: in analyzing the quality of corporate management, attracting investors, securing loans, and carrying out mergers and acquisitions that are very common in the small business segment. To identify small businesses, we propose differentiated criteria for qualifying an entity as a small business, considering the economic substance of operations. The article mentions that in real circumstances the financial market does not determine small business value publicly, making it difficult to measure the value. Based on the systems approach, we articulate the main purpose of a small entity and financial indicators to achieve the goal, i.e. maximizing returns on capital, mitigating financial risks and capital expenditures, reaching a necessary level of sustainable growth, increasing the economic added value. The article describes an algorithm for calculating indicators of small business's financial standing. In the practical part of the research, we present how the indicators are computed using specific case studies and examples. Conclusions As a result of the research, we offer our recommendations that prove that value management reflect the quality of management decisions in the long run, thus enabling small businesses to overcome possible crises and operate in the market sustainably.
Keywords: small business, value management, criterion, small entity, systems approach, financial indicator
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