Essay: Factors That New Businesses Should Consider

24 Oct

Essay: Factors That New Businesses Should Consider

Sample Essay

Among the key factors that a new business entity must consider when entering into an industry while the economy is recession or boom is the target market. It is important to segment the market in terms of the age, region, population density, religion, level of income, gender and level of education among others, (Croft, 1994). Irrespective of the level of market segmentation, the economy is negatively affected meaning all the target market is negatively affected. This means that the new firm will have a hard time to win a market share that can break even. Based on the above-mentioned fact, a new business should not begin its operation in a poor economy.

            The government interference in a poor economy affects the success of a new firm. The new firm may be engaging in a business in a foreign economy while the government may protect its industries from external competitors making it unfavorable for a new firm to operate in the new economy. Additionally, the government monetary and fiscal polices determines the rate at which the economy will recover, (Buti, 2003). However, it is not the only the government that plays a key role in the economy recovery, the rate of recovery cannot be predicted making the future of the business activities very uncertain. The other players determining the rate of business recovery include lobby groups such as trade unions, financial institutions among others.

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