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The article deals with the study of conceptual foundations of the development of the potential of small business in the region. The purpose of the article is to study the essence and features of small business potential and to form conceptual foundations of its development at the regional level. The subject of the research is theoretical, methodological, and practical aspects of the potential of small business in providing a sustainable economic growth. In the course of the research, the following general scientific and special methods are used: dialectical, system analysis, graphical analysis, matrix, mathematical modelling in economics, and logical generalization of results. The essence of the category “small business potential of the region” is studied; it should be understood as a complex system of balanced and mutually related elements in the form of conditions, resources, and opportunities for small business enterprises in the region to conduct production, economic, commercial, and other activities in order to ensure public needs in terms of sustainable economic growth. Methodological principles for forming a conceptual model for the development of small business potential and the scheme of generalized stages of its implementation (preparatory, analytical, operational stages and stage of introduction and implementation) are determined, the implementation of which will help to determine the preconditions for the formation of strategic potential, assess its modern quantitative and qualitative composition, and make a forecast of prospects of the use in ensuring sustainable economic growth. It is proposed to use economic and mathematical models, by means of which it is possible to quantitatively describe the connection between the input indicators of the economic system and the performance indicator. In order to substantiate directions of development of the potential of small business in the region in view of its role in creating new jobs and increasing employment as one of the important indicators of sustainable economic growth, it is proposed to build an economic-mathematical model, the main parameters of which are generalized indicators of the level of labour potential, material-technical potential, financial potential, innovation and infrastructure potential. The use of the proposed methodological approach to the substantiation of directions for developing small business potential will determine possibility and probability of selecting necessary measures to improve certain of its structural elements and their consideration in the development of small business development programs, the selection of sources of its financing, which should facilitate the intensification of business activity as an important factor of flexibility of the regional economy, ensuring competitive activities, capable of becoming a foundation for the renovation of economic growth.

THE CONCEPTUAL BASIS FOR THE DEVELOPMENT OF SMALL BUSINESS POTENTIAL IN THE REGION