External Influences – Business

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If a recession occurs them the unemployment in stone will be high and less money circulating through the shops in stone. This will make people wary of their financial situation and will not be willing to spend money on luxury items like the CD’s and Videos I will be selling in my shop. This could cause my business to go into a lot of debt or even bankruptcy. If I was planning on expanding my business by building an extension onto the premises I would have to apply for planning permission, this means I have to seek approval of my design before I can start building. I may be denied planning permission this means I cannot build onto the building and therefore not expand my business how I wish to.

My business will be in the centre of stone high street. This will make my shop accessible to customers. I may be in competition with other businesses in stone so in order to attract more customers I order to run a successful and profitable business I will have to find different pricing strategies and promotions. If I buy stock from abroad the exchange rate of certain currencies will play a big part in the profit I produce. The higher the exchange rates the greater the value of the pound. This would make other countries unwilling to sell their goods, but would rather buy in goods, because of the large return they would receive. This would be the opposite if the exchange rates were low. Low exchange rates would not be good for my business because I would receive less for my money. If import rates are high then I will have to buy products from the wholesalers at a higher price. This would lead to me having to raise the prices in my shop in order to be able to produce a profit, I could loose customers because of this as they may feel prices are to high and the competition could be lower priced.

If the population is greater in stone then the more likely I am going to have a higher number of customers, and therefore more profits. I would be stupid of me to set up my business in a small village because I would not have many customers and my business would not last long before it failed. Also as I am selling CDs so I am targeting more young and middle aged people, so if I set up my business where there is more of an older generation my business is likely suffer.

If the state of the economy is suffering my business will be affected, this is because the unemployment rate will be high and I will not be making as much a profit. Therefore I would have to raise my prices loosing even more customers, eventually my business will go into debt because I have not been able to maintained my level of profit enough to breakeven.

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