The April 2007 Discover Small Business Watch, a survey of small businesses with five or fewer employees, found that the gyrations of the stock market have little to do with the day-to-day running of a small business.
That’s what the majority of small business owners say. Sixty-eight percent (68%) of those in the Discover survey for April 2007 said changes in the stock market do not have a noticeable impact on their businesses.
That’s not surprising. Small businesses are all about daily realities. Realities such as: How many sales can my business close this week? Can I afford that new CRM system this month? If I hire another person will I be able to make payroll?
The stock market does not enter into these daily realities, for the most part.
A lot of stock market ups and downs are short-term movements. They have more to do with stock traders getting spooked when Humongous Company X misses earnings projections, or when the Asian exchanges are down, or when some other event occurs with a temporary ripple effect.
Most small business owners are not sitting glued to CNBC’s stock ticker thinking, “Hmmm, the market had a bad day, so I’d better wait before buying that new computer.” They know that the market could be down today and reaching record highs next week.
However, the economy as a whole is relevant. Small business owners do, in fact, make decisions based on their impressions of the overall condition of the economy. We’ll take a look at the overall economy and how it impacts small business sentiment in my next post.