The success or failure of a business is dictated by several different factors, and some are out of your control entirely. Whether it’s the effects of your marketing campaign or your rivals, you can’t control everything! Unfortunately.
One other factor that is affecting your business, that you may not have thought of, is the stock market, and the value of assets. Whether it’s the value of a company or the value of an item like wheat or gold, these factors can both negatively and positively affect your business.
It’s not always obvious how to read this data, or if you should be reading it at all. However, I’d recommend that you stay up to date on all things stocks, for several key reasons. The following article will give you some information on how the stock market, and prices, affect your company!
How does the stock market affect my business?
A rising stock market – i.e. one that is booming – is great, all around. This type of stock market signals that investors and consumers are confident. This is because their general buying activity pushes up prices. Yes, that means that the price of commodities like gold will be higher, but it also means people want to buy gold products. You’ll make your money back on the other end.
When stock prices rise, your investors are happier. This can result in more money being pumped into your company which can be used for a whole host of improvements. Want to move to a new office? Want to do up your current one? Want to hire a lot of staff? You got it.
For example, those with a jewelry business would need to keep an eye on the silver prices per ounce, among other metals. This is to see whether people are buying that particular metal or not. If the price is low, people aren’t buying it, so it’ll be reduced. Consumer spending and the economic climate can directly impact your company in more ways than one.
And if consumers are spending more, you’ll benefit from increased revenue – profit! On the other hand, if stock prices fall, things aren’t likely to be as rosy for you. If consumers are spending less, whatever the reason may be, the ramifications of this will be felt by businesses above all else.
This is especially true if your business sells luxury goods, like sports cars and jewelry, items people can live without. You should keep an eye on similar businesses to yours during this time, too. It’s possible to expand your business by investing in shares in the struggling competition.
How can businesses combat the stock market?
Not to be the bearer of bad news, but you really can’t. Not directly, anyway.
All you can do is keep an eye on your rivals, and the price of the commodities in which you deal. At the end of the day, every single business on the planet is at the mercy of the consumer wallet. It’s a harsh truth, but it’s a truth nonetheless.