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:
- Cost of capital
- Kind of goods
- Consumer purchasing trend
- Variable costs
- Inventory turnover
- Location
- Market structure
- Competitors
- target market
- Government interference
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