A business does not function in a vacuum. It has to act and respond to what happens outside the manufacturer and office surfaces. These factors that happen outside the business are known as external factors or affects. These will have an impact on the main inner functions of the business enterprise and perhaps the goals of the business and its own strategies. Main Factors The main factor that impacts most business is the degree of competition - how fiercely other businesses contend with the merchandise that another business makes. The other factors that make a difference the business are: Social - how consumers, households and communities behave and their beliefs. For example, changes in frame of mind towards health, or a greater number of pensioners in a society. Legal - the way in which legislation in contemporary society affects the business enterprise. E. g.