What is the Small Business External Environment?

What is the Small Business External Environment?

Definition of Business External Environment

Small Business Success - What is the Business External Environment?

The Small Business External Environment can be defined as the events, forces, conditions and entities surrounding a small business that influence its activities, choices and decisions. The external factors affect a small business’s abilities to be successful and build relationships with customers.

The external environment has two components, commonly known as the Macro Environment and Microenvironment.

 

What is the External Micro Environment of a Business?

The small business’s external micro environment is formed by the individuals and factors within the immediate area of operation that directly influence its business operations and ability to serve customers. There is direct contact between the small business owner and its microenvironment that can affect regular activities instantly. The micro environmental factors include the customers, suppliers, competitors, marketing intercessors, distribution channels and the general public. Some changes in microenvironment can be controlled by the small business owner. However, there are always micro-environmental factors that are uncontrollable by the small business owner. More details at Small Business External Micro Environment

What is the External Macro Environment of a Business?

The external macro environment is formed by the major external and uncontrollable factors that influence a small business’s decision making and performance. The macro environment cannot be controlled by the small business owner and represents the “big picture” that impacts all businesses at the same time. It is dynamic in nature and keeps on changing. The changes in the macro environmental can be threats or opportunities for your small business. Macro-environmental factors include the Political, Economic, Social, Technological, Environmental and Legal factors (PESTEL factors). More details at Small Business External Macro Environment. Also read blog post PESTEL/PESTLE Analysis for Small Businesses.

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