• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube
Big Ideas for Small Business logo

Barbara Weltman

Big Ideas for Small Business, Inc.

Whitepaper download

Subscribe and download our eBook, "150+ Tax Deductions for Small Business A to Z."

This field is hidden when viewing the form
Get the:

  • Home
  • About Us
  • Big Ideas For Your Business
    • Idea Of The Day ®
    • SMB Legal
    • SMB Taxes
    • SMB Financial
    • Small Business
    • Newsletter Archive
  • Services
  • Books
  • Blog
  • Multimedia
    • Videos
    • Radio Shows/Podcasts
  • Be a Guest Blogger

PEST Analysis and What It Means to Your Business

February 21, 2023 / By Barbara Weltman

PEST Analysis and What it Means to Your BusinessWhat is PEST analysis? It’s not an examination of whether there are ants or rodents on your premises. PEST stands for Political, Economic, Socio-cultural, and Technological factors, and each of these factors can impact your business going forward. (One university adds 2 more factors, environmental and legal, making it PESTEL, but I’m wrapping their factors into PEST.) Small business owners need to be making projections in order to run their companies efficiently and avoid serious pitfalls that could occur. Understand the 4 factors and what’s going on now, so that you can plan ahead.

Political factors

What’s happening politically on the federal, state, and local levels directly impacts your business. Which party is in control affects the laws and regulations that govern your operations. This directly impacts:

  • Employment-related policies (e.g., whether paid leave will be enacted in more states and perhaps on the federal level)
  • Taxes imposed on your business, and on your customers (impacting their ability to pay)
  • Trade restrictions or opportunities

Review the tax changes from SECURE Act 2.0  to take effect after 2023 to see how they will impact your business. This should be part of your PEST analysis.

Economic factors

Inflation, interest rates, unemployment and supply chain issues are the big economic factors affecting the marketplace today. But where will things stand 6 months, or 12 months, from now? Economic factors can push the economy in a positive or negative direction. For example, will “disinflation” as Fed Chairman Powell calls drive the inflation rate down to historic norms—2% to 3%? A change in the inflation rate will impact interest rates, which obviously affect your cost of borrowing as well as your customers’ ability to carry their debt. Use economic factors to decide whether you’ll be buying new equipment, expanding into new locations, etc.

Socio-cultural factors

Factors from the Census Bureau—population size and demographics—are one aspect of socio-cultural factors. This are just the “numbers.” The other aspect is more difficult to quantify but just as important an influence on business. It includes consumer attitudes. Both add up to who your customers are and what they are looking for. A great example of the impact of socio-cultural factors is the concern about climate change, which has spurred the industry of electric vehicles. Customers today say they want to know about sustainable products and packaging.

Technological factors

Computers and smartphones are old technology that continue to play a part of your business. But today, the technology talk is all about AI and the metaverse. How will robotics affect your business? Will you use virtual reality to enhance the customer experience?

Planning for the future

“Success is not a random act. It arises out of a predictable and power set of circumstances and opportunities.”  ~ Author Malcolm Gladwell

Planning ahead should include a focus on all aspects of your business—finances, marketing, inventory, staffing, and more. For example, Motley Fool has information to help you do financial projections. If you feel overwhelmed by this task, meet with your CPA and other business advisers to get input and advice.

Tags business planning economy PEST analysis plan ahead political factors Taxes technological factors

Primary Sidebar

Categories

  • General Business (498)
  • Guest Blog (109)
  • Homepage (21)
  • Small Business (990)
  • SMB Financial (322)
  • SMB Legal (66)
  • SMB Taxes (324)

Barbara’s Recent Posts

  • Scale Your Business by Stepping Up IP Protection May 29, 2025
  • Disasters Happen: It’s Important to Be Prepared Now May 27, 2025
  • How Work Order Software Transforms Small Business Operations May 26, 2025
  • The Numbers Are Up for Sole Proprietorships May 22, 2025
  • New Business or Project Crowdfunding: What To Know May 20, 2025
  • Old-School Estimating vs. Smart Solutions: What’s Really Holding You Back? May 19, 2025
  • Employees Getting Called to Public Service: What to Know May 15, 2025
  • Not Too Late to Prep for Summer Now May 13, 2025
  • How Will the Next Generation of Learners Affect the Workplace May 12, 2025
  • Moms Know Best: Lessons for Entrepreneurs May 8, 2025
  • Mental Health Challenges in the Workplace May 6, 2025
  • Let’s Celebrate Small Business! May 1, 2025
Awarded Top 100 Small Business Blog medal (link will open in a new window or tab)
Marquis Who's Who 2023 Badge
Top Small Business Blogs (Link will open in a new window or tab.)
8 Financial blogs small business Owners Need to Read. Invoice home.  (link will open in a new window or tab)
Best Small Business Blog, Expertido.org
Top 50 Small Business Blogs 2018
Best Small Business Blogs
BizHumm Top 100 Business Blog Award to Barbara Weltman
FitsSmallBusiness.com: Award for Best Small Business Blog 2017 (link will open in a new window or tab)
FitsSmallBusiness.com: Award for Best Small Business Blog 2016 (link will open in a new window or tab)

Footer

Big Ideas for Small Business logo

Small business ideas, business tax news and small business consulting from Barbara Weltman to provide business owners with the information they need to succeed. Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.

Contact Us

[email protected]

(772) 492-9593

gacor maxwin situs slot thailand terpercaya situs slot gacor situs gacor akun pro thailand slot bandar togel terpercaya

Latest Tweets

bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 30

Can AI Enable Us To Focus More on the Work We Love to Do? https://bit.ly/4jes1jI #smallbusiness #AI #focus #software #productivity

Reply on Twitter 1928543784310079906 Retweet on Twitter 1928543784310079906 Like on Twitter 1928543784310079906 1 Twitter 1928543784310079906
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 30

??

Reply on Twitter 1928489888023724097 Retweet on Twitter 1928489888023724097 Like on Twitter 1928489888023724097 Twitter 1928489888023724097
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 30

Social Media Impressions Explained: What They Are and Why They Matter https://bit.ly/3G7X4ze #socialmedia #smallbusiness

Reply on Twitter 1928466810376007985 Retweet on Twitter 1928466810376007985 Like on Twitter 1928466810376007985 Twitter 1928466810376007985
Load More

Copyright © 2008–2025 Big Ideas for Small Business, Inc  |  Designed by Hudson Fusion

  • Privacy Policy
  • Sitemap