LEARNING OUTCOME 1:  Assess Personal Entrepreneurial Competencies

LEARNING OUTCOME 2:  Understand Business Environment and Business Ideas

Natural and Physical Environment. This concerns the physical location of a business’ store. The natural environment also pertains to the natural and man-made structures that may enhance the beauty of the location, such as a park or a sea front view, or serve as barrier to the location, such as a dump site or high rise structures that obstruct a view. The living condition in an area also serves as a standard for the ambience you want to create for your store. 

Demography. This pertains to the number of people living in the area, their age, gender, socio-economic status, family size, religion and even growth trends. These are invaluable information that can help entrepreneurs in matching their product to the target market, in deciding for the marketing strategy, pricing and product packaging among others. 

Culture. Culture or sub-culture, being the totality of the way of life, ideas and customs of a set of people or society, primarily influence the types of products that are acceptable to a particular locality. For example, the influence of the Japanese culture gave rise to minimalist designs. A sub-culture also shapes the ‘emotional’ environment of an area. For instance, the feeling of ‘fear’ for a specific location may serve as a barrier for a business; a place where one does not feel safe because of the prevalence of crime will discourage entrepreneurs. 

Government Regulations. The laws and policies of the national and local government units also influence the business operations. Some examples of policies that directly affect entrepreneurs are the imposition or removal of taxes for products, the establishment of economic zones and assistance in product labeling and packaging of products. In addition, improvement of facilities and roads improve transportation network that facilitates transfer of products from one area to another or promotes accessibility for consumers. 

Economy. This pertains to the management of resources and study of the system of production, distribution, and consumption of goods and services. A country’s economy influences both the entrepreneurs and consumers as it relates to the financial matters of business like taxes and interest rates and to the quality of life, cost of utilities and services, among others. Even small scale entrepreneurs must learn to study economic indicators to improve business forecasts, such as when to buy certain materials and supplies, when to open a store or introduce new products based on consumer spending, or when to hire employees. Some examples of economic indicators include the (a) Gross Domestic Product (GDP) which increases when a country’s economy is doing good; (b) Unemployment rate which indicates that more unemployed people usually signal an economy getting worse; and (c) Price Indexes and Inflation rates which determine the buying power of consumers. 

Technology. Technological changes are inventions based on the application of science that create new product or process improvements. Some examples of technological changes are mobile tools that enable online connection, new business tools for analysis and database, social networks and modern, digital equipment. These advances in technology result to efficiency and productivity at a lesser cost. It can be observed that sending message through e-mail provides a cheaper and faster means compared to hand-delivered mails (snail mails). An entrepreneur can benefit from technological changes by identifying the appropriate technological solution available in the area or locale.