SOCIOECONOMIC

IMPACT STUDY
The Socioeconomic Factors Affecting Small Business

Socioeconomic factors are factors that affect how consumers

behave in an economy. Social economics is a specialized
branch of economics that studies the relationship between
economics and social behavior. Such things as ethics, social
norms, and different social philosophies have an impact on
consumer behavior. The study of social economics seeks to
predict what results from society will get when society
changes.
 The Socioeconomic Factors Affecting Small Business

Socioeconomic factors are the social and economic factors

that shape and determine the dynamics a society will
experience. These are factors that affect the behavior of a
particular group, also known as socioeconomic class.
Different socioeconomic classes will generally have different
priorities, and this will affect how they spend their money.
How Do Socioeconomic Factors Affect Businesses?

Understanding the socioeconomic factors affecting

business will help you make better decisions about the
future and direction of your business. To have an
intimate understanding, however, you will have to
understand both external and environmental factors,
as well as how their interplay affects your business.
 Environmental Analysis
This is a special term that refers to the process of looking
at the external socioeconomic issues in a business. It is
considered a part of general business analysis, so it is
useful to the executives of a company. It can help them
grow the organization, increase the streams of revenue
the company receives and also get ahead of competitors.
 Environmental Analysis
A subset of environmental analysis is the PEST analysis, or
some of its variants, such as the PESTLE analysis. This is a
form of analysis that looks at four relevant factors that
affect a business environment
The acronym of "PEST"
Political factors
Economic factors
Social factors
Technological factors
There are other variations, such as PESTLE,
which includes:

Legal factors
Environmental factors
 ECONOMIC FACTORS AND THEI EFFECT ON

BUSINESS
Economic factors are the main factors considered when a
company makes financial decisions. They are connected
to
money, goods and services and affect businesses on a
micro- level as well as macro-level. Some economic
factors you must think about in your business include
exchange rates, interest rates, recession, taxes, and
demand and supply.
Some economic factors you must
think about in your business include:
Interest Rates

Exchange Rates

Recession
Interest Rates
Interest rates are everywhere and are imposed by many
different people. In fact, banking institutions are obsessed
with knowing what the status for interest rates in the
economy is for a good reason. It is how they determine
their leading practices. It is also good information for a
company that relies on debt capital to finance ambitious
projects.
Exchange Rates
Exchange rates are an important factor to consider for any
business involved in importing and exporting various goods
and services. When exchange rates fluctuate, they affect the
ability of a company to pay its international suppliers
satisfactorily. This can also affect the profit margin of the
company, as well as the number of resources it needs to stay
afloat.
Recession
Whenever an economy faces a recession, it has the
potential to change the attitude taken by consumers
toward their purchasing decisions. This may force
companies to drop prices to stay afloat.
 1-5. TRUE OR FALSE
1. Social economics is a specialized branch of consumer and
social behavior.
2. Environmental Analysis is the process of looking at the
external socioeconomic issues in a business.
3. Interest rates are everywhere and are imposed by many
different people.
4. Economic factors are connected to money, goods, and
services.
5. An economy that faces a recession may force companies to
 A. Economic Factor E. Interest Rates
B. Recession F. PEST Analysis
C. Environmental Analysis G. Socioeconomic factors
D. Exchange Rates H. PESTLE Analysis
6. What kind of economic factors has the potential to change the attitude
taken by consumers toward their purchasing decisions?
7. What kind of economic factors is an important factor to consider for any
business involved in importing and exporting various goods and services?
8. What kind of economic factors are everywhere and are imposed by
many different people?
9. This is a form of analysis that looks at four relevant factors that affect a
business environment.
10. It is considered a part of general business analysis, so it is useful to
For 11-15.

What PESTLE stand for?

THANK YOU!