The physical environment is a key component of the business environment in which you intend to operate or in which you already run your business irrespective of whether it’s conventional or online, small or big. It refers to the availability of resources that you need to run your business efficiently. These resources may generally include among others inputs like materials, services, land, climate, water, physical plants and facilities. Every business needs these resources to get started or to have its work done efficiently and effectively.
Your physical environment comprises of both natural and man-made resources. Features like land, water, climate, wildlife and vegetation are natural components of the physical environment in which we live and operate our businesses. On the other hand, dams, roads, premises and much more, are man-made resources that affect your business.
Physical environment may also refer to the physical location, space and any other thing that physically impacts on you and your business. For instance, light, temperature and distractions in your office can affect your performance. If you are working in an office with little light, it can make you get stressed up. If it’s extremely hot in your workplace, it can make you get so tired that you find it difficult to work comfortably and effectively. What about a noisy and polluted place? What effect can it have on your health and your business? Think about it!
Why is it important to understand the physical environment in which you operate your business?
There are several reasons but let me share with you only two of them that are related to the Ugandan situation. They include the following.
#1 – Good for planning purposes
The success of your business depends largely on good planning. You need to have a business plan if you intend to start any business. Additionally, you need a marketing plan and an activity plan as well. One of the most important aspects you should consider at any planning level is the physical environment.
Understanding your physical environment enables you to plan well for your business from an informed point of view. If you already have a business, discovering about the physical environment helps you to grow a successful business. When the resources you need for your business become scarce in the environment, it’s hard for you to continue with your business operations normally. Many times, one has to borrow funds from banks, micro-finance institutions or other money lenders to acquire resources so that the business can survive.
For instance, Uganda was naturally endowed with abundant rainfall, good climate and fertile soils. This is why Winston Churchill named it in 1908 the “Pearl of Africa”. These words still ring in the heads of Ugandans and they’re proud of it because of the good natural physical environment God gave to Uganda.
However, due to the uncontrolled disastrous activities by Ugandans themselves, rainfall has become as scarce as in desert countries. The once fertile soils are no long productive without adding fertilizers or manure. As a result, the climate has changed greatly countrywide.
What does this mean to you as a business person? If you operate a business related to agriculture like commercial farming, food processing or trading in food items and cash crops, think about how the Ugandan changing natural physical environment is going to affect you. Make your research and get to prepare yourself well for any eventuality that might arise from the changing natural environment.
#2 – To know the resources you need for your business.
The resources you need vary from business to business. For instance, if you want to set up a laser engraving business, you will have to get engravable materials, technical people, and office space in a good location, a laser engraver and constant power supply. You will also need designing software, skills and knowledge in designing / engraving and a computer to start your business.
But if you want to set up a juice manufacturing business, you will have to get different resources. You will need fruits as your raw materials, juice making equipment, electricity, transport and much more.
You therefore need to consider so important the physical environment in which you intend to set up your business. First ask yourself what you can offer by yourself. Secondly, consider outsourcing what you cannot offer either locally or abroad. It’s always beneficial if your physical environment can offer what you need for your business.
What else should you know?
If you want to venture into agriculture-related businesses, land and labor are very important resources. Land is always readily more available in rural areas than in the urban areas. Likewise, cheap labor is normally more available in rural areas than in urban places.
If you want to set up a small processing plant, machinery and raw materials are key resources to consider. For instance, if you want to start an engraving business, you will have to purchase a modern laser engraving machine and materials like wood, plastic, glass, acrylic, leather, coated metal, marble, paper, rubber and tiles from which you will produce the products you want to sell to your targeted customers.
The physical environment affects the efficiency and success of any business. Before you venture in any business, it’s advisable to think about the availability of the physical resources that you need to run your business and take some steps to ensure that you have them available. Always understand the physical environment in which you operate your business!