Starting a new business is always an exciting time. You have done your market research and have found that there is a need for what you do and so the future looks good. However, did you stop to consider that global economies and politics can quickly turn things around, making a business move at this time a risky venture? The best advice you can be given when starting a new business is to consider not only your market research within your industry but also the state of affairs around the world. Consider just a few ways in which global economies and even political unrest can interfere with your new business.
How politics affects the economic climate
A look at the most recent election in the United States should give you a pretty clear indication of just how politics affects the economy. While everyone forecast doom and gloom, Wall Street showed a different picture altogether. There have never been so many record highs in the first year of a new presidency as there has been in the first year of President Trump’s four-year term, but still, the opposition laments the change from far left to far right.
In fact, you can read how high-end Nordstrom said that they wouldn’t be carrying Ivanka Trump’s designer line because, in the words of their spokesperson, people were simply too poor to shop this line. However, not being the most expensive line in the store, this leaves an impression that it can only be grounded in politics, even though the article in todaysglobalnews.net hints that it may be a possibility.
Global economies have a huge impact on domestic trade
So then, if politics and political unrest can interfere with merchandising in a country as large and economically stable as the United States, what can happen around the globe at the first sign of strife? Those economies, not being as strong, may implode causing a domino effect. One currency is dependent on another, which is dependent on trade with another and within a matter of days, our economic climate can be affected here at home.
Advice to startups before launching a business
Startups are encouraged to understand the connection between politics and the economy prior to launching a new business. It doesn’t mean that a new business shouldn’t start; what it means is perhaps putting that launch on hold until a clearer picture of the economy begins to emerge. If there is any doubt whatsoever, it’s better to hold on a bit than to go under because the economy isn’t strong enough to support another business.
If you want to see just how the global economy can affect a startup, just follow the Forex market for a short time. See how currency pairs are impacted by geopolitical events and how those currencies buckle under political pressure. Believe it or not, our economy is very much dependent on our trade partners and so it pays to keep an eye on global events.
Before starting a business, look at the big picture. If all looks well, hit the green button and launch. If not, hold until the future becomes clearer. You may not make money quite yet, but at least you won’t be losing your proverbial shirt in the process.