Advertising

Successful Businesses Use This Tool to Predict the Future and Get Ahead of Their Competitors

Advertising
Successful Businesses Use This Tool to Predict the Future and Get Ahead of Their Competitors

There are many factors that can affect the success of your business and determine which direction you will have to take next. According to research conducted by the Small Business Administration (SBA), one of the reasons 22% of start-ups fail within the first five years of launching is due to poor management.[1]

While there are many management skills for us to acquire, the ability to foresee the future is unquestionably the number one ability everyone longs to possess. Fortunately, it’s not some inherent talent only available to an elite few. With the right tools and resources, you too can make accurate business projections.

What Is PEST Analysis and How It Can Help You Predict the Future

One of the best tools to use is the PEST analysis. A PEST analysis is centered around the political, economic, social and technological factors of a business. These are part of the macro environment. The macro environment is about external influences and factors that can heavily influence a business whether they choose it or not. We will break down the PEST analysis into 4 major factors so you have a better understanding before applying it to your business:

Advertising

Political Factor

What it means: This is about regulations and laws that are put in place in your place of residence/ town/ country that have a significant on your business. The issues around politics are, tax, political stability, trade regulations, affirmative actions and so forth.

Why it is important: This is important when planning your finances, hiring policies and training of staff. Some companies have quotas around hiring minorities and previously disadvantaged groups. Some industries require you to train staff on first aid and healthy safety.

How to use it: When you are planning the overall growth it’s important to keep in mind what these requirements are when you reach a certain turnover or head count of staff. This puts you ahead of the curve and you have no surprises when you do reach a certain threshold as implementation and planning can be very costly.

Advertising

Economic Factor

What it means: This include factors such as inflation, currency strength, interest rates, trading power and foreign investments to name a few.

Why it is important: This helps if you want to get funding for your business, financing, loans from the banks. The economic environment also gives you insight regarding un-employment rates, pay rates and other financial aspect re your business.

How to use it: This is great for when you’re making financial projections. For example, if you have a long term loan out against your company, factoring in interest rates of the bank ensures that you do not come short on your budgeting. If you wish to hire someone with certain experience and expertise, knowing what the market rate is for such professional can help you in terms of your hiring plan and how to factor in that salary when you’re budgeting

Advertising

Social Factor

What it means: The social environment deals with demographics, location, culture, lifestyle and the likes. Having a know how about your environment is paramount to how you establish your business. For example, there is not use going to sell feminine products in an industrial area dominated by men. Or selling fur coats in a place where animal rights are of high importance to the culture. Different cultures like different things so you need to know how to accommodate them.

Why it is important: When the community feel that the business caters to their needs and understands them, you gain more loyal customers and that gives you competitive advantage.

How to use it: It is also very important for organizations to be involved in Corporate Social Responsibility (CSR) – most people think CSR is expensive and is only applicable to big corporations but it’s a social responsibility every company has. You can choose to devote your time to helping repair roofs in a school. You can get employees involved in helping at charities or you can give contribution to a cause. It doesn’t have to be millions but the little can go a long way.

Advertising

Technological Factor

What it means: The technological aspect of the PEST is something that is new to this analysis. But in today’s world, it is almost detrimental to your business to ignore technology.

Why it is important: How does technology affect the business you do? The world of retail was transformed significantly when e-commerce was introduced. If your organization deals with everyday mundane and monotonous tasks, how does technology affect your growth. There are some systems that are automated to help eradicate the human error. There are computers that can do a job that easily required 4 people.

How to use it: Knowing what kind of technology is out there and how it either threatens/assists your business, will help you derive a better vision and makes your more flexible and you won’t be so susceptible to change.

Advertising

The PEST analysis can also be extended to a PESTEL Analysis, which deals with the environment issues like animal rights, carbon footprints, pollution and the likes as well as legal matters such as discriminations laws, harassment, minimum wages and other compliance issues.

If you have the desire to grow and expand your business to be sustainable, the PEST analysis is a tool that can best give you a guideline to take the necessary steps.

Reference

[1] Office of Advocacy: Frequently Asked Questions

More by this author

Kayiba Mpoyi

Writer by birth

10 Reasons Why Some People Will Never Succeed The Key To Reaching Your Goals: Willpower And Planning Don’t Wait for People’s Validation, Do It Yourself, Every Single Day Successful Businesses Use This Tool to Predict the Future and Get Ahead of Their Competitors 15 Signs You’re Doing Better You Think You Are

Trending in Productivity

1 8 Time Management Strategies for Busy People 2 5 Ways to Manage Conflict in a Team Effectively 3 How to Use Travel Time Effectively 4 7 Most Effective Methods of Time Management to Boost Productivity 5 How to Manage a Failing Team (Or an Underperforming Team)

Read Next

Advertising
Advertising

Last Updated on January 13, 2022

How to Use Travel Time Effectively

Advertising
How to Use Travel Time Effectively

Most of us associate travel and time with what we’re going to do one we get to our destination. Planning and mapping out what to do once you arrive can certainly make for a more pleasurable vacation, but there are things you can do while you are on your way that can make it even better.

Sure, you can plan for the things you’re going to do on your vacation while you are travelling en route – but what about making use of that time for other things that you don’t usually do when you’re at home? You don’t need to have your gadgets with you to do it, and you can really connect with yourself if you take the time to manage your life while heading towards your vacation destination.

Here are some great tips to help you with your time management while you travel, some of which are more conventional than others. Nonetheless, you can find out what works best for you and apply them accordingly depending on when and how you are travelling.

Advertising

1. Take Your Time Getting There

As I write this, I’m on a flight to San Francisco. Flying is the fastest way to get from place to place, and for many people it’s really the only way to travel.

But I’ve often taken the train or ferry on trips so that I have extra time without distraction to get more done. I’m not worrying about navigation or lack of space to do what I want to do. Instead I’m able to focus on getting stuff done during the time I’ve got without feeling rushed. For example, when I took the train from Vancouver to Portland, it was an eight hour trip and I managed to get a ton of writing done and closed a lot of open loops. It also was less expensive than flying, which was a bonus.

Sometimes taking the long way to get somewhere on vacation can be the best thing for you to get somewhere with your life.

Advertising

2. Go Gadget-Free

This is going to be a tough one for a lot of you. But why do you need to bring your gadgets with you when you go on vacation? It isn’t be a bad idea to leave all but one of them behind, and only pull out that one when you absolutely need to do so. In some countries, you’d be wise to be discreet with them anyway since flaunting them in front of those that are less fortunate than you isn’t a good practice. While it may not seem like flaunting to you, in different cultures it can definitely come across that way.

If you can’t go gadget-free, then at least go Internet-free. If you use a task management app that requires syncing across your multiple devices to be effective, remember that if you only have the one device with you then it can be the “master device” for the time being and will store your data locally anyway. Just sync up when you get home.

3. Reflect and Prepare

Finally, going on any sort of excursion gives you the perfect opportunity to reflect on where you’ve been. The fact you have removed yourself from where you usually are can give you a perspective that you simply can’t get when you’re at home. You may want to journal your thoughts during this time – and by taking more time to get to your destination you’ll have more time to dig deeper into it.

Advertising

After a period of reflection – however long that happens to be – you can then begin to not only prepare for the rest of your travels, you can prepare for the rest of what happens afterward. The reflection period is important, though. You need to really know where you’ve been in order to properly look at where you want to be. Time away from things gives you that chance.

Conclusion

Traveling isn’t always about where you’re going and how quickly you can get there. In fact, it’s rarely about that at all.

More often it’s where you’re at in your head that will dictate how much you benefit from traveling. So don’t just go somewhere fast. Instead, take your time on the way there and take the time to connect with not only where you are but who are while you’re there.

Advertising

If you do that, you’ll have a better chance to be who you want to be when you leave.

Featured photo credit: bruce mars via unsplash.com

Read Next