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Factors affecting business success Note 11. Introduction to Business BBI2O1 March 2012. Factors affecting business success. Business success is NEVER a given Depends on several factors including: Personal factors Economic conditions Government influence. Personal Factors.
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Factors affecting business success Note 11 Introduction to Business BBI2O1 March 2012
Factors affecting business success • Business success is NEVER a given • Depends on several factors including: • Personal factors • Economic conditions • Government influence
Personal Factors • To be successful an entrepreneur must be able to both plant and grow his/her business • The following list of personal traits are generally required: • Desire for control • Vision • Passion • Perseverance • Teamwork • http://www.neptec.com/
Economic conditions • Economic conditions that affect business include: • Supply and demand • Marginal businesses have difficulty in periods of heavy competition with decreased prices • Price fixing • Supply quotas • Cartels • OPEC Organization of Petroleum Producing Countries • Labour market conditions • Labour force • Unemployment rate Participation rate • Subsidies • Inflation • Purchasing power • Deflation
Government Influence • In a “mixed market economy” like Canada’s, the government can influence business by: • Imposing taxes • HST (PST / GST) – on the purchase of goods and services • Customs duties – on imported goods • Excise tax – on spirits, wine and tobacco • Control the distribution of goods and services • Licenses and permits • Marketing boards – control the supply of goods - Milk Marketing Board, the Egg Marketing Board • Money Supply – The Bank of Canada regulates the supply or money and the cost of borrowing for major banks • Anti-trust legislation – to oppose the control over supply by any business – Competition Act • Enforce regulations • Health and Safety regulations – child car seats, inoculations for school children • Quality control legislation – new home inspections • Control unethical business practices – through Business Practices Act and the Consumer Protection Act – price fixing, bait and switch tactics