Effects of external business environment on your business are inevitable because they are not under your control to stay safe from them. You just have to operate facing all the external factors and you can’t entirely change them. That is way one has to be so careful about all the external factors of one’s business. We already have discussed what is external business environment? Therefore, now would just discuss its effects on your business.
Economic effects of external business environmentIf economy is on rising path your business would be impacted positively by it. In case of otherwise you have to suffer its bad impact. You cannot run your business in isolation. You have to interact with the external world. The economy of the country where you run your business reflects the overall business conditions of that country. If businesses are collectively growing you would obviously be growing. Even if they are quite stable but overall business environment of that country is fragile it would also sooner or later negatively affect your business. Hence whatever mood and trends an external business environment has it would eventually influence your internal business environment.
Political effects of external business environment
If political conditions in a country are not good it means it is so risky to run the business in such country. Political stability ensures good governance which would ultimately brings on stable business environment. If political chaos in a country is so huge then it will put bad impact on its overall business scene. People would fear to invest. Those who are already investing would avoid expanding their business. There would be lack of business confidence because of the political uncertainty. That is why most of the foreign investors first examine the political system of the country and its stability before venturing into such countries.
Social effects of external business environment
In intensity these are not as huge as two of the above but they cannot be overlooked. If you run a fashion business in a country you have to see how is the social environment of that country. Isn’t it so conservative that you can’t sign bold and beautiful models to launch your lingerie products? This factor you have to keep in mind. You cannot run a franchised undergarment outlet in a backward or fanatic country without any risk. Therefore, you have to thoroughly examine the social effects of the external business environment before starting a new venture.
Weather effects of external business environment
That is one of the quite uncontrollable effects of business environment. You can just adopt precautionary measures to stay safe from it. Otherwise there is no any tip to avoid them. As a matter of fact you should not run a business in a weather condition that is adverse to the type of business you want to do there.
So these are a few of the effects of external business environment you have to take full care of them while starting a new business.