If you haven’t been paying any attention to those political aspects that have an effect on your business, it’s therefore important for you to understand the political environment in which you are operating because it can present political risks to your business. For instance, your business is subject to political risks if a war erupts in any country where you do business. Likewise, changes in government policies may either affect you positively or negatively. The prevailing political environment in any country directly affects the economic environment or performance.
As a home business owner, you need to keep yourself aware of the political climate in which you operate. Political changes affect greatly small business owners and it’s quite important for them to know whether the changes in the politics and government policies are supportive or unfavorable to their businesses. This awareness enables you to run your business from an informed point of view so that you are not subjected to political risks.
What aspects of the political environment should you consider as you do business?
1. Stability of government
It’s important to know how stable the national government is and how stable it’s likely to be in future depending on prevailing political circumstances. Political instability makes it very difficult to do business. An abrupt change in a political regime may make businessmen lose their property and hard earned money. If you are operating business in such a country, the risk of losing business is high.
2. International relations
How does your government relate with other governments? Does your home government maintain good relations with other foreign governments? For instance, for people who run online home businesses, there are countries where it’s pretty difficult for one to set up an online payment system just because services provided by, say, PayPal or ClickBank are not available in those countries. This makes it difficult to sell your products or services online. A good political environment makes it possible to establish good relations with other foreign governments, which in turn creates directly or indirectly an attractive environment for new investors.
3. Government bureaucracy
The political environment in which you do business may be slow to facilitate opening or conducting businesses in the country. Long processes may be required for investors or entrepreneurs, whereby they are subjected to fill in so many forms that actually discourage some of the potential entrepreneurs.
As I conclude, I would like to appeal to you to always follow closely the political environment in which you operate so that you can know what to do to guard yourself against any eventualities that may result from any changes in the politics of the countries where you do business. Political changes can also create great opportunities for you as a business person and such chances can come your way if you keep yourself knowledgeable about the political climate in which you do business.