Question

What economic factors must be considered when starting your own business ?

Answer 1

The economic factors one must consider while starting your own business are -

Credit- the most important one must consider is the availability of credit.One can put his own capital in the business but it's very limited so one must look for external options such as bank loans and from various other institutes.Setting up and running the business while carrying out its day to day activities requires huge amount of funds and if one is not careful in planning for its finances then one may face very adverse situations like huge debts or shutdown.

Resources- the resources required to run the business such as raw materials,labor and machinery are very important factor. The business cannot run if it doesn't have availability of these basic resources which is required.

The business owners hould anticipate it in advance and plan for it,set up their supply chain and distribution network so that it may never get shortage of these resources in its day to day running.

Market- the business owner should do a competitive analysis of the market in which he is going to setup his business. A careful planning and analysis of the demand for its products, present situations,the supply,the competitors,the rules and regulations and the expectations of the customers will save costs and bring more revenue as the business will effectively study and plan for. all the factors in advance.

Skills- one should also consider that if he really wants to run a specific business and that if he is technically capable, really passionate and committed to run it. He should also look for the people to add to his business as partners and employees who shares his vision and commitment regarding the particular business.It will increase efficiency and specialization and bring success to him if he really puts his heart into it.