Essay: Poor state of an economy affects all sectors

18 Oct

Essay: Poor state of an economy affects all sectors

Sample Essay

The poor state of economy affects all sectors of economy and makes it very complicated for an investor to start a new business. Furthermore, the wage demands are very high due to the inflation while consumer spending is very low. A few globally known entities began their operations during recession and have overcome all the challenges in a poor economy and thrived.

These include Hyatt Corp., LexisNexis, Burger King Corp, and HP, just to mention but a few (Sarah, 2020). These firms mainly invested in 80/20 rule and eventually overcome all the challenges. Despite the success of these firms, it is not wise to begin business in a poor economy.

Factors or Costs

Below is a list of factors and costs that must be considered when considering whether to start a new business in a poor economy:

  1. Cost of capital
  2. Kind of goods
  3. Consumer purchasing trend
  4. Variable costs
  5. Inventory turnover
  6. Location
  7. Market structure
  8. Competitors
  9. target market
  10. Government interference

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