External Factors: External factors are generally beyond the control of the company. The best way for a business to deal with these external changes is to be proactive. A successful business would be ahead of these changes rather than reacting hastily. There are six main external factors that can affect the performance of a small business: political, economic, social, technological, legal and environmental (PESTLE analysis) politicalEssentially, political factors include laws and regulations that require a business to take to a certain extent or prevent him from taking certain actions. Policy changes can have a significant impact on small businesses. The UK's relationships with other countries may either close or open major markets. (Government stability also plays a major role. Internationally, a business may face additional political factors such as embargoes, tariffs, uncooperative governments, and even war. EconomicThe economy typically suffers fluctuations with alternating periods of expansion and recession Boom periods are beneficial for most businesses, while recession can cause businesses to collapse Growing demand and low interest rates generally encourage. businesses to take more risks and grow Changes in interest rates, changes in exchange rates between international currencies and rising inflation can impact the situation. High prices drive up the value of currencies, making imports cheaper and exports more expensive, thereby reducing profit margins. SocialThese are linked to lifestyle changes, spending habits and overall changes in consumer behavior. the population also changes over time. For example, the baby boomer generation is aware of environmental issues. Most of these measures benefit the environment, but inevitably there is a financial impact on businesses large and small. A recent example is regulations requiring that a specific minimum proportion of all packaging be recycled. A less exciting example is the current policy goal of reducing pollution by imposing high taxes on road fuel; This may seem environmentally friendly, but as fuel prices rise, motorists naturally seek out the lowest prices. These lower prices are usually found at gas stations run by multinational oil companies and large supermarket chains, against which small local independent garages cannot compete. Environmental issues and regulations are unlikely to disappear, so only companies that take a proactive stance and prepare to work with them will ultimately survive..