Some environmental factors crucial for an entrepreneur are:
Political factor: Political factors is the outcome of a combination of various ideologies advocated by different political parties. The rules and regulations and the laws that monitor and regulate the market forces are framed and promulgated by the government. This include the political factor. These policies generated aims at improving infrastructural facilities which encourage new business ventures. For example, After relaxation of import-export policies, an entrepreneur who exported textile material used its earning to import heavy industrial machines. Socio-Cultural factor: Business is bom and develops in society and in it various social factor exists. It involves a close study of the life styles, beliefs, customs, conventions, practices, etc. Expectations of individuals their preferences on the basis of their family background, age group and education will also form a part of this study. The main of an entrepreneur is to satisfy the need of all individuals of a society. Ex. An entrepreneur wants to open a showroom of branded footwears. Hence, he will target the high income group of society.
Economic factor: It includes the close study of important variables like supply and demand. Details of consumer trends, economic preference, costing, discounting, etc. are all economic decisions. Economic details will also help the entrepreneur in determining the size of the project and the reasons of finance. Legal and Finance factors: Legal scanning of the environment demands analyzing the legal requirements in the establishment of a project. Managing of the project and also in getting assistance from different sources, e.g. welfare of employees, safety, simple contracts entered into with suppliers of raw materials financer’s, real estate owners, etc. require legal assistance.
