When setting up a business you must consider the different factors that might affect the performance of your business; as you can imagine, one of the most important is competition and the different factors that should be considered in order to take advantage of them and reduce the chances of been negatively affected by those that are not favourable.
The main factors to consider are:
1. Economic Factors: probably the most important factor to consider as it includes the different finance aspects that will undoubtedly has an impact on the performance of your business. The most important are those with a bigger incidence for the type of business you are working on; for example, if the costs your raw material is too high then you should evaluate inflation rates in particular those affecting your input goods as it will have an impact on the output or finished product. Also, if you import or export some of your products you should consider the future of the exchange rates in the country you are dealing with.
2. Political Factors: this is particular important if you export or import from countries that tend to be unstable not only economically but also politically; for example, there are many problems with foreign companies in countries in south America at the moment; how this will affect your business? Also, you must consider the law within your own country in terms of laws or regulations being studied at the moment.
3. Social Factors: this particularly relates to the change in lifestyle of your customers; do you work in fashion? You must follow future tendencies if you want to be running in the long term. Economic factors might also affect social factors; if your business sells luxury goods and the country of residence is one with an increasing number of unemployment then this will has an impact in the sales and profit of your company.
4. Environmental Factors: an increasing number of people are now considering companies that tend to be green; this mean, companies that use raw material that are good for the environment. Have you considered this kind of materials?
5. Technological Factors: online marketing, web marketing, internet marketing or whatever you want to call it might be the best example of this factor; the use of the internet is causing a revolution in all companies and those who ignore to grow with it will probably not be around for much longer.
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