There are a host of factors contributing to facilitating business investment. These factors include internal, external, environmental, and other, which facilitate the business. There are some inhibitors of business also. Successful entrepreneurship is based on factors that are favorable external or micro-environmental factors that facilitate the business. There are certain internal or micro-environmental factors that either support or hinder the work and performance in the long run.
What are Facilitating factors in a business?
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The persons who help the core activity of any business are called facilitators. The ancillary services are facilitators of business. Commercial service providers are facilitators of business. These facilitators help business companies and industries to grow, work, and develop beyond the boundaries of region, city, state, or nation. They give utility in business by removing obstacles in the path to success. The facilitators of business are providers of services relating to transport, postal, and courier. Marketing consultancy, advertising, telecommunications, and information technology are also facilitators of business. Legal aids, accounting, project management, and office management, are also the same. Engineering and research and development are also the same.
List of facilitating factors
External Environment-related factors
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Access to sufficient finance act as facilitators. Technological capabilities viz strong technological base in the nation and technological capabilities of the firm are facilitators. Government policies or favorable policy measures by the government, such as entrepreneurial support policies, are facilitators. Cultural, political, and economic conditions of a country or region that should be conducive and congenial are facilitators. These include the availability of desired quality and quantity of raw material and other factors of production. This also includes a complete understanding of the customer needs and favorable ideologies of government or political parties. Proper infrastructure also is a facilitator. This includes ports, networks, and an efficient transport system.
Availability of intellectual human capital or strong human resources is the most important facilitator of business. Strong backing by support institutions like loan services, and less formalities in obtaining licenses, registrations are facilitators.
Personal factors
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The desire to be one’s own boss is also a facilitator. There should be an ability to take strong personal initiatives. There are characteristics such as behavior, personality, and attitude that make a difference. There is should be requisite capabilities and functional skills. There should be proper training. There should be clarity of vision and goals. Hard work and achievement orientation and dedication are important. Strong personal, professional, and financial support is important.
Inhibitors of business
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There are certain factors that may hinder the normal functioning of a business enterprise. The same factors that act as facilitators can act as inhibitors if they have a negative element in them. So, if there is a weak backing by support institutions, societal problems, non-conducive economic environment, high competition, less personal qualities, inadequate capital, or poor information- then these can be inhibitors of business investment.
Other facilitating factors in a business investment like stocks
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When you are investing, you should know the expected return factors. The expected return can be in the form of interest or dividends, and capital gain or loss.
The Liquidity is also a factor in investment. Liquidity of an investment refers to how fast the investment can be converted into money.
Volatility (Equities vs Equity funds vs Debt funds) refers to the range or pace of fluctuations that investment has. The higher the range and pace of fluctuations, more the risk of profit or loss.
Time horizon refers to the period of time that an investor holds the investment before selling it. Time horizon is the key difference between trading and investing. The investment horizon determines the investor’s income requirements and risk exposure. This helps in choosing the appropriate investment product. For certain investments, there is a risk of loss if you close out before the expected investment horizon. This is especially in the case of fixed-income assets. Another reason is that if the time horizon is longer, the relative volatility of the investment becomes smoothed out over the entire period. It can effectively reduce huge potential losses in volatile months.
Risk vs Reward is also a factor. Any kind of investment requires a subtle amount of risk. You should take a calculated risk. And also, stick to a risk vs reward ratio that suits your appetite for risk.
Individual risk appetite is also a factor. The investment choice that works for your friend may not be suitable for you. The reason behind this is that you may have different risk tolerance.
Human Capital
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The most important factor in business facilitation is human capital. Human capital allows the economy to grow. Now, human capital is the economic value of a person or a group of people, and it depends on the training, skill sets, loyalty, motivation, and well-being. Human capital management is also a term. It is important for HR. Knowledgeable and skilled workers can only contribute to an economy. No business can run without support. This support includes human capital and external support, and also financial support.
Conclusion
So, it can be said that there are many factors that contribute to business. There are a number of factors that lead to a growth in business. These are called facilitators of business. The same set of factors that facilitate the business can act as inhibitors if they have a negative element in them. Availability of funds and a conducive and congenial economic environment are the biggest facilitators in business. Poor management and insufficient capital are the inhibitors of business. There is a term called investment facilitation also. There are five investment style factors like value, size, quality, momentum, and volatility. Other macroeconomic factors are interest rates, inflation, and credit risk. There are certain factors that you should consider when you are making investment decisions like considering asset allocation, knowing the goals, checking the risk tolerance, not going for volatility, laying a financial road map, return on investment, investment period, budget, investment objectives, and tax implications.
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