7 Ways the Stock Market Affects Your Business Strategies

Unless you work in certain areas of finance, or are well-versed in the stock market, you may wonder what the ups, downs, and in-betweens of the stock market mean for you. This is especially true for the average citizen, who only feels the crunch when the chips are way down (Great Recession, anyone?).

Still, there are many business considerations to make when monitoring the activity. Here are seven areas where the market and your business might meet.

  1. Consumer Confidence

“Consumer confidence” is an oft-used term that best demonstrates how the market can impact us all. It’s an interesting bit of psychology; the perception of the economy at large helps dictate whether or not people feel safe spending money. If your business doesn’t deal in absolute necessities of life, you might want to adjust your expectations based on consumer confidence.

  1. Investments

Whether or not your business is publicly traded, you might count on investments and funders to facilitate growth or even just get by. Or perhaps you manage a company whose owner is very active in the stock market. Where the market is at can affect if, when, and how much money is invested in the future of your business.

  1. A Change of Plan

Most business owners who are truly in it for the long haul have goals. Both above factors, the confidence of the consumer and any investors, might have a great deal of impact on how you formulate these goals. Particularly uncertain times can mean that a certain quarter is dedicated to stability, and not growth, for example.

  1. Employment

Markedly bad times mean higher unemployment, reduced pensions, and generally unfavorable conditions for workers. For you, you might need to train employees to be especially vigilant when it comes to customer-facing operations, so as to preserve the business you do retain during a bad market.

  1. Credit Matters

When we’re talking about the money you put into and get from your business, how much of it is actually cold, hard cash? We all use credit, loans, and the like, and this even applies to the wholesaler you get your inventory from. The market can impact prices and interest rates your business is offered from warehouses and banks.

  1. Intensifying Competition

If customers are tightening their belts due to low confidence, the competition will stop at nothing to secure what’s left over. A turbulent market might see you spending more on advertising and making more special offers to stay in the game. For this reason alone, visiting sites like Commodity.com may help you get a better understanding of where attitudes are at.

  1. Jumping Ship

The increase in competition can have implications many business owners don’t see coming. Namely, the idea that your right-hand man (or woman) could be enticed away. People are always looking for something better when things seem economically unstable, and this could see your best employee taking their expertise (and maybe some company secrets) to another business.

Confused by the stock market? You don’t have to be a trader or daily follower to leverage a little market knowledge. Let the market have a little influence over your future plans, and you can easily remain a step ahead of other businesses.


Arnel Ariate is the webmaster of Money Soldiers.

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