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