What is the Business Environment?

What is the business environment? Is it natural beauty of the environment or the beautiful lush green lawn in the courtyard of the business office? Or simply it is green surroundings of the business?

All of the above are just the components of the business environment which means whatever lies inside or related-outside of the business – tangible or intangible – including its building, offices, furniture, fixtures, staff, clients, manufacturing process, sales, accounts, administration, top management and other such articles and factors.

When you establish a business first of all:

  • You set a purpose which is obviously to earn money.
  • After that you decide how to earn money and it’s called your business strategy.
  • Subsequently you set the target of how much money to earn and it is called your business approach.
  • Even then you decide in how much time you have to earn how much money and you term it your marketing strategy.

Factors of business environment

What is the business environment? This question can also be answered in another way. There are several factors you have to decide before starting a business. While doing so you are actually laying the foundation of your business. To achieve the objectives of earning money through a business strategy you initially need the required amount of money to start your business. Hence the first and the foremost point to decide before starting a business is the arrangement of the finances.

You should also read our articles Internal Business Environment and External Business Environment

Monetary factor

If you are rich enough and can afford to meet the establishment cost of your business by yourself it’s ok otherwise you have to arrange the finances. Mostly half of the needed amount is usually borrowed from a financial institution which usually gives priority to lend money to those who intend to start a business. Rest of the amount is managed by the would-be businessman by him or herself because it is quite irrational to start a business with entire borrowed amount. If it is done so the risk of the business would be quite high; first the risk of earning profit and then the risk of paying back borrowed money.

After deciding to start a business with the purpose of earning money you set up an office to sell your product if you want to do a selling business. If you want to manufacture the products and then sell them subsequently; in this case you become a manufacturing concern. For this purpose you have to establish a factory.

How to start a business

Whatever type of business you establish you do it in a systemic manner? First you buy a piece of land. Wait, even before that you get the permission to start your business from the concerned authority – in most of the country from the industries department. To get the permission you have to submit your business plan, the sources of financing to run the business and all the necessary certificates and after their due whetting you are allowed to start your business staying within your business plan.


So back to the original question; what is the business environment? You establish all the necessary requirements of your business and it collectively makes the environment of your business. You sit in your office, your laborers work in the factory, your management sit in their rooms, your clients come to the front desk of your business to buy your products, the suppliers of the raw material visit inside your factory and various such other factors are jointly called your business environment. If you manage all the affairs of your business very smoothly and apply best possible approach in every activity of your business it is called the congenial environment of your business.

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Team Editorial

Team Editorial posts contents on this blog under the leadership of Edson Hale who is a pro blogger and widely acclaimed motivation consultant with twenty years experience of perception management on various issues of professional and personal development.

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