a) Personal Factors
i. Personal abilities
-One must have personality traits that will enable him/her to start, continue and succeed in business. One must have entrepreneurial traits and be motivated and determined to succeed in business. E.g. one must be willing to work hard and pursue his/her goals persistently he/she must be innovative, creative and optimistic.
ii. Skills:
-One needs to have the training and experience necessary in the proposed line of business. He/she must have adequate knowledge about product or service and the necessary managerial skills for the business to succeed.
iii. Interests / hobbies:
-As an entrepreneur, how much interests does one have in line of his/her business? Ann interest or hobby can be a basis for a business.
iv. Family:
-Small businesses and family are inseparable, one affects the other. You need to consider possible effects of the business on the family and how the family could affect the business.
v. Health:
-Running a business successfully calls for a lot of hard work. It involves a lot of physical and mental energies. If an entrepreneur has failing health, it is advisable to engage in less strenuous activities.
b) Resource Factors
i.) Financial Resources:
-These include money saved by the entrepreneur and money that may be borrowed from individuals and institutions like banks, building societies, cooperatives, etc to start and run a business.
ii.) Labor Resources:
-The availability and suitability of labour should be assessed.
iii.) Equipment/Machinery:
-Tools of the trade that are essential in any business. They may include furniture, office equipment, machine for a specific job, etc.
iv.) Raw Materials:
-These are items that are to be converted to states that can be readily used by consumers. These include timber if one is furniture business, cloth materials if in dress making business.
c) Environmental factors
i.) Location:
-Factors such as community profile, communication, road, water, safety, source of raw materials and competition should be considered when locating a business. This enables easy accessibility of the business by customers.
ii.) Government Policies / regulations:
Policies such as taxation, pricing, licensing, loans and policy documents affect small enterprises. Information on the above is available from district Information Offices, Trade Organizations, Kenya Chamber of Commerce and Government Printers.
iii.) Infrastructure:
-Availability of roads, power, water and telephone services are very important in some types of business.
iv.) The economy of the society:
-The average income and employment trends determine the demand for goods and services within the community to sell products or services at reduced profits, a strong economy creates ample demand and good profits.
v.) Competition:
-An entrepreneur should try to assess the number of competitors in his or her environment in order to compete with them successful.
vi.) Market:
-A market for the product or services is very important to the entrepreneur. One has to assess whether there’s a steady market.
Wilfykil answered the question on June 12, 2019 at 13:46