The environment where your business operates includes.

1. The Micro Environment
2. The Market Environment
3. The Marco Environment

The Micro Environment
This is the business itself. As the owner you have the most control over this environment, and it includes all the functional Areas of your business (finance,marketing,distribution,human resources etc.)

The Market Environment
Which is the environment where your customers, competitors and suppliers operate. As the business owner you do have control over this environment through the way you offer your products and services to the markets, how you treat your suppliers and how well you defend yourself against your competitors.

 The Macro Environment
As business owner you have no control over this enviroment,it includes the international arena and globalisation,the government and its policies. Knowing what is happening in this environment is important for an entrepreneur as happenings and changes will impact on the growth and profitability of the business.

Let us focus on the following aspects of macro environment:-

• Physical Environment
  This refers to the physical resources that people and business rely on to support life. e.g.

  • Water

  • Air

  • Climate

  • Rivers

  • Ocean

  • Forests

• Social Environment
  This refers to how to how people and communities behave, their relationships,  education,the jobs they do and conditions in which they live. the following are all components of social components.

  • Demographics

  • Gender Issues

  • Urbanization vs. Rural livelihoods

  • Employment

  • Health

  • Education and Skills

  • Consumerism

  • Crime/War

• Economic Environment
  This is measured against the achievement of the following macro-economic objectives

  • Full Employment

  • Equitable distribution of income

  • The gross Domestic Product (GDP)

* Buy the SME Toolkit for more details