The factors that are hurting and helping other players in the industry will also impact your business. In fact, the way your business responds to them might constitute part of its competitive advantage.
Trends in policies set by government agencies and leaders can affect the legal framework within which small businesses operate, the market conditions that affect consumer behavior and the amount of assistance offered to small businesses by the government.
Being aware of political trends at the national and local level is an essential part of planning and strategy development for your small business. Economic Trends Different political parties or individuals enact different policies to guide national and local economies to prosperity, based on their own economic ideologies.
This means that political trends can have an impact on taxes levied on businesses and individuals, leaving your customers and yourself with more or less money to spend in the marketplace. Economic policies can also influence interest rates throughout the economy, including rates for small business loans.
The sentiment of all economic actors in society can be affected by the government's ability to control economic conditions.
For example, in a struggling economy, consumers may spend less in the marketplace, causing banks to offer fewer and smaller loans to businesses. National Security National-security concerns can have an impact on consumers' buying and saving habits throughout the economy, and trends in politics can do much to heighten or calm security fears.
The people and parties in power at any time have a direct influence over the relationships of a nation with its neighbors in the global community, including hostile rivals. A nation at peace can encourage people not only to spend more overall, but to invest more in long-term assets such as homes and businesses.
Labor Laws Changes in labor laws can be anticipated by keeping an eye on political trends. Political candidates are often vocal on their stances regarding minimum wages, insurance requirements, labor-related taxes and regulation on the terms of employment. Any change in labor laws can mean a change in expenses for a business, and these expenses can be significant for small businesses without large cash reserves.
A change in the minimum wage, for example, can cut directly into a small company's profitability.
Small Business Assistance Small businesses in the United States can take advantage of a wide range of free or low-cost services from federal and state agencies, including grant funds, insured loans, advisory services and even tax breaks. Trends in legislative politics can serve to increase or decrease the number and amount of these services, which can impact the opportunities that small business owners have to build a sustainable and profitable enterprise.
As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. He has earned a Bachelor of Arts in management from Walsh University.Business is affected by different factors which collectively form the business environment.
These include economic, social, legal, technological and political factors.
Business environment is therefore, the total of all external forces, which affect the organization and the business operations (Kotler &Armstrong ). The political environment of the country influences the business to a great extent. The legal environment refers to the principles, rules and regulations established by the government and applicable to people.
These regulations come through various legislations. The government has passed and enacted various Acts. Effects of political factors on businesses. Government changes in their rules and regulations could have an impact on business. The political condition of a country affects its commercial setting.
The economic environment affects the business presentation.
Governments and politics play a large role in international business. In this lesson, you'll learn about the political environment in international business, some of its key factors, and its impact.
Political and Legal Environment of Business For many businesses, non-market forces are as significant as market factors: the interaction between government institutions, elected officials, policy-oriented activists and NGOs shape the legal environment for firms in ways that have direct implications for their bottom line.
The political environment of the country influences the business to a great extent. The legal environment refers to the principles, rules and regulations established by the government and applicable to people.
These regulations come through various legislations. The .