Business Economics - 5 Factors to consider when starting up a business.

in hive-175254 •  14 days ago 

There are plenty of Businesses in this world ranging from small-size to large-sized businesses. These have different dynamics of operation that keep them sustained as they pursue the achievement of their set goals and objectives. What is a business? A business is any legal gainful economic undertaking that people get engaged in for the purposes of making profits.

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Availability of Labor

Businesses need labor that includes human beings to help out in the running of its day to day business operations. These can be employed as accountants, marketers, managers, secretaries, and so on. These are very important in the business as they help in the formulation and sustenance of the business chain. Businesses will want to employ cheap labor as a way of minimizing on the cost of production so as to maximize profits.

The Infrastructure

A business needs good roads in a nation where it hopes to operate for the purposes of easy transportation of its goods from the area of production to the area of demand. Storage facilities such as warehouses are also part of the infrastructural requirement required by the business. These are needed in storing of the goods before transporting them to where they are demanded.

Perishable goods such as flowers need a faster means of transport such as airplanes for their transportation from one country to another.

Availability of the Market

Companies need a ready market for their products and services rendered. A company generates income from selling of goods to its customers and without them it is bound to making losses. A market can be an area where the exchange of goods and services are conducted from. It can also imply the people who are willing to buy the business products.

When starting up a business it’s important to first conduct a thorough market survey entailing finding out what sort of goods are needed by the different categories of people. Are they willing to purchase the goods and what affordable price?

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Forces of demand and Supply

Businesses/companies heavily rely on the forces of demand and supply for their survival and growth. When the demand is high, the company has to maximize the profits by producing more to cater for the high demand of its goods and services.

However when the demand is high and the business does not have the capacity to cater for the high demand, it eventually raises the prices of the goods being offered which can eventually discourage the customers in the long run if the prices for a particular product keep going high.

Businesses have to regulate their level of production in order to keep availing its products to its clients at an affordable price so as to maintain its clients as well as maximizing the gains.

Land/location

Businesses need land which can also be described as an area/space for running its operations. The business needs to have a location/address where clients can always come to for inquiries. People trust businesses that have addresses.

A business with an address shows professionalism and transparency in its operations. Businesses with an address are often times well regulated by the government where they are situated which is something that gives it credibility.

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