Despite the need for the development of small business in Russia, at this period, the state has not established mechanisms to ensure favorable conditions for small business. Therefore, the actual number of small businesses is low and, as a result, society is not able to use the full potential of the market. The main functions of a small business can be attributed to maintain a competitive environment, providing a large number of jobs, the formation of the middle class and creating innovation.

There are many factors that hinder the development of small business: limited resources; high rental of premises; low wage; racketeering; rising prices for raw materials; lack of working capital. However, the state has the greatest impact on small businesses. It introduces high taxes and sets the administrative barriers. For a small enterprise it is difficult to obtain credit, because the credit and financial institutions in Russia are insufficiently developed.

Also difficult economic situation in the country makes banks charge very high interest rate for borrowing. Small business lending is risky for the bank. Taxes and administrative barriers force businessmen to bribe. According to the statistics, Russia took the 136th place in the list of Corruption Perceptions Index (CPI) [4]. Frequently corruption enables larger players displace small and medium-sized enterprises from the market. Corruption also makes business go into the underground economy. This situation prevents the further economic development of the country.

The existing system in the country is not able to protect small businesses and direct it to the path of development and prosperity. Therefore, the government should develop some programs for the development of small businesses and generate concrete measures for combating administrative barriers and corruption.