Well the quick answer is – a lot. Whether you are the current owner of a small business, run your own franchise segment or are exploring either of these options, its crucial to know what can affect your success. A small store in an even smaller town in Midwest America might seem pretty immune to the overall workings of the global economy – but that’s just not true. Since the global economy has such far-reaching impacts, small businesses are not even close to immune. In fact many times, when things go really well or really badly on a worldwide scale, small businesses are the most affected.
For example, as the global economy changes so do bank regulations. When there are loan defaults, mortgage deficiencies or a change in the value of currency banks update their practices and regulations. That being said, it can make it very difficult for potential small business owners of franchisees to get the funding they need. When banks decide on the ratio of capital on hand versus the amount they have loaned, small business owners can take a big hit. If these professionals can’t get the money they need, they could end up not being able to purchase a franchisee or secure a location for their small business.
How America Small Business are changing with New Economy
In addition, foreign economies can also affect the success of small businesses and franchises in the United States. If imports are high and products are offered at a low price, small businesses can find it hard to compete and succeed. On a more basic level, if the economy is struggling in China, it could hinder the supplies sent to small business, which could force them to increase prices or decrease their stock of products. On the other hand though, if imports are low and prices for these products are high, a domestic alternative could be offered by small businesses and help them with financial success.
That’s right, the global economy having an impact of franchisees and small business, isn’t always a bad thing. In fact, when international economies are doing well, small businesses have more opportunities than ever before. With the constant development of the Internet and worldwide shipping, small businesses now have the option to export overseas. That small family-owned store down the street that makes and sells all their own jams and jellies can expand its customer base past neighbors and friends. They can now sell their products online to anyone in the world. If they are selling something very unique, they can even increase prices to make a higher margin.
Owner of America Small Business are taking Advantage
The short conclusion here is that the global economy does matter and impact small businesses and individual franchises. Business owners that keep an eye on the worldwide economy can better take advantage of trends and changes. The key to for small businesses is making the global economy work for them. When it comes to franchises, we can use Dr.PhoneFix as an example. The more smartphones sold internationally, mean more potential damaged devices and therefore more business in products and services. Knowing how to repair foreign devices and being able to reach international customers is a way that the company makes the global economy work for them instead of just reacting to its impacts.