Yes and no. When you run a business you probably make future projections (Is now a good time to try to expand to new market? To hire more people? To order a lot of merchandise?),
Coworker today "I'm not very optimistic about the economy, very worried."
I didn't press him as to why, but I can only think of 3 situations in which worrying about the economy would occupy much of my time...
1. If I were a politician or an economist whose job was dependant on worrying about the economy
2. If I were a Billionare venture capitalist who just made a massive investment in a startup company that was dependant on a strong economy like an airline
3. If I were a near minimum wage worker up to my eyeballs in debt and watched 24hour news for fun
I wonder which one applies to him? Oh, wait..
That could be, but it affects people far more deeply than those 3 situations. For me, I would be worried if the economy took a downturn because than consumer confidence would decline, and so they wouldn't spend as much, meaning that as a wholesaler, my customers won't buy as much. This would hurt my business.
I think you just illustrated his point. The "economy" shouldn't really affect how you run your business. You manage overhead, inventory, other expenses as always. The "economy" can be going like gangbusters and a new competitor could have just as much effect on your business as a crappy "economy."
See Ford vs GM ~2008
and if you think the economy is going to tank soon you'll make different projections and therefore different decisions than if you think the economy will prosper
BDWW, I really don't know what you're trying to say but I'll try to address it.
Yes, if the market for my products is going well, I have to be wary of competitors. If the market is bad, well things are good for obvious reasons, but I think it's the height of stupidity to say that the economy doesn't affect how I run my business. EVERYTHING effects how I run my business, I don't stay up at night worrying about the economy (there are plenty of other things on my mind), but it is something I have to watch for.
In addition for sales declining, there's always the chance that my customers will go out of business. This can hurt due to losing that customer, but also if they had a balance with me, there's the challenge in collecting. My company is stable (knock on wood), but all too many businesses run on a slow margin.
Nanu, you're correct, but as someone that has a company that has an extremely low overhead, there's only so much we can do in the face of a bad economy. The only thing I can really do is order less products, but it is always a challenge to pick the right one. Oh, I'll also switch to buying more lower end products, as generally customers will tend to gravitate towards them during a recession.