Every business starts with a plan. A business plan is a written statement of business goals, reasons why they are believed to be attainable and the methods which shall be used to achieve these goals.it is a main decision making tool. Contents of a business plan are determined by goals of the business and differ from one business to another depending on the needs (Pinson, 2005). A business plan tries to identify strengths and weaknesses, resources, activities and all other factors relating to that business. It lists all financial liabilities and legal concerns that might affect investors.
Several factors operating in the internal and external environment of a business influences its success. PEST stands for “political, economic, social and technological factors.” The PEST analysis describes the framework of environmental factors. When the PEST factors are combined with the external micro-environmental factors, they can be classified as opportunities and threats in what is commonly called a SWOT analysis (Wong, Radel, & Ramsaran-Fowdar, 2011). The SWOT analysis will disclose the strengths, weaknesses, opportunities and threats that are available for the business.
Political factors describe to what extent a government intervenes in the economy. Factors such as labor laws, tax policy, political stability and consumer restrictions that are not in favor of the business selling heated jackets will cause the down fall of the business.
Economic factors include interest rates, taxation, monopolies and exchange rates. If the interest rates are high, the heated jackets are heavily taxed and and the economy has a powerful monopoly that produces jackets, it may be difficult for the new business to sustain itself in such an environment. The heated jackets will therefore be a viable business if taxes are fair, have enough strength to compete with monopolies (if any) and interests rates should be low to enable the business borrow extra capital from financial institutions.
Social factors include demographic and cultural factors such as composition and size of the population, lifestyle and cultural beliefs. Heated jackets should be supplied to a population that comprises a large consumer group of such product. The heated jackets should be made in a way that does not violate the culture of the surrounding society but emphasis on the social welfare. This will enlarge the market for the jackets hence more profit will be realized.
Technological factors include changes in technology used to produce and supply the jackets and also changing costs of acquiring and maintaining that technology. The heated jackets should be produced and supplied using modern technology (Wong, Radel, & Ramsaran-Fowdar, 2011). The business should have enough resources needed in acquisition and maintenance of the technology. If poor technology is used, the business will not stand the stiff competition in the market.
Government rules safeguards consumers and at the same time ensures success of businesses. Government intervenes by taxing, setting healthy and safety standards, licensing, setting prices and putting in place policies to reduce environmental pollution. For instance, governments licenses businesses to ensure that no sector of production is overcrowded.
Overcrowding would have led to an unhealthy competition (Pinson, 2005). The heated jackets business has to adhere to any regulations that are in place. Government supports businesses by offering subsidies and protecting small businesses from external competition.
It will be rational to launch the heated jackets business only after undertaking the PEST and SWOT analysis and both prove that the business is viable and sustainable. Otherwise, the business may turn out to be disastrous. The plan should also identify a large market for the business so as to guarantee its growth and development.
Pinson, L. (2005). Anatomy of a business plan: A step-by-step guide to building a business and securing your company's future. Chicago, IL: Dearborn Trade Pub.
Wong, H. Y. Radel, K., & Ramsaran-Fowdar, R. (2011). Building a marketing plan: A complete guide. New York, NY: Business Expert Press.