The concept of the financial environment refers to entrepreneurial terminology and characterizes the totality of economic entities operating outside a particular enterprise and affecting its ability to carry out entrepreneurial activities, earning income.
Otherwise, the financial environment of entrepreneurship can be considered as a set of various conditions and factors that affect the results of the enterprise.
The financial environment is endowed with the ability to have both positive and negative impact on the economic position of the firm and its ability to effectively exist in the market. The financial environment provides and creates the specific circumstances in which the company is forced to operate.
The financial environment, coupled with the capabilities and strategic potential of the company, expresses the level of development in the market for the entire enterprise as a whole.
The best option is that the capabilities of the enterprise fully correspond to the environmental conditions. In this case, special attention should be paid to the ratio of the firm's cash support and the financial environment of entrepreneurship. If an enterprise has the necessary potential to meet the requirements of the environment, its efficiency increases, which leads to an improvement in its financial condition and strengthening of its position in the market. Otherwise, the company, having overestimated its own abilities, cannot, for example, respond to its own promises, for example, to fulfill a contract or confirm bids. This will inevitably affect the financial condition of the enterprise.
There are several levels in the financial environment:
- External environment of indirect impact (includes a system of moments manifested at the macro level that affect the enterprise, for example, municipal economic policy);
- The external environment of direct impact (characterizes the system of moments that affect the enterprise in the process of its relations with counterparties in monetary transactions and transactions, for example, relations with customers and suppliers, banks and insurance organizations, etc.);
- Internal financial environment (is a system of moments that determine the choice of organization and forms of economic work of the company in order to achieve the best results, which are controlled by the leaders of the enterprise).
Depending on the stage of the firm's life cycle, the financial environment of entrepreneurship can change, but it never disappears, so it may and should be controlled, changed and able to adapt to it.
The structure of the financial environment of entrepreneurship can be viewed from two positions. The first suggests that the financial environment comes from the micro-environment and the macro-environment.
The microenvironment of entrepreneurship is represented by the close environment of the firm, that is, its microlevel, and the macroenvironment is represented by macrolevel factors.
