PEST Analysis

The links listed in our Resources pages are organized into groups to assist you in performing an analysis of your external business environment, treatment a mandatory step when preparing a business plan. This framework is often called a “PEST” or “STEP” analysis because it considers:

  • Political factors include those which are of relevance to your business, primarily government regulation, trade restrictions, the possibility of government intervention, and political stability;
  • Economic factors such as macro-economic growth, fiscal and monetary policy, cost of borrowing, and and exchange rates;
  • Social factors including population, labour force and employment issues as well as attitudes and cultural influences regarding your products and services; and,
  • Technological factors such the emergence and adoption of new technologies relevant to your products and substitutes, and advances in automation and manufacturing processes that can impact your costs.

Legal and environment factors are sometimes included as explicit additional factors for an expanded analysis called PESTLE.