As the once-booming real estate market begins to cool
slightly, some speculate that this slowing down trend will affect those who own
small companies. As someone who just entered the business field less than a few years ago, I do somewhat worry that things will slow. A recent article that I read says that the cooling of small business sales may affect certain businesses more and gives some pointers on how to keep business coming if sales start to lag.
So why the slump in sales just because the housing market is taking a hit? For one thing, some consumers are struggling to pay their very high monthly mortgage, and when someone begins to have difficulty paying a regular bill they are less likely to go out and spend on things like jewelry and clothing. Those of us who own businesses that sell products that
aren’t considered necessities, such as jewelry or clothing, may see a lag in sales
because of this. When money gets tight, the first things to go are the play things.
And even if the consumer is not struggling financially
to pay the bills, he or she may understand that things are cooling down some. Psychologically, people are probably more
likely to go out and spend when things are on the upswing than when things are starting to head downhill. Of course this is not true for all. In fact, I read a second article just the other day that discussed how those that have a lot of money really aren’t impacted by the swings in economy unless those swings could affect their bank accounts.
Certain types of small businesses may be more
likely to feel this tightening of the purse strings than others, particularly
those involved with the housing market. Construction companies, home repair
people and stores that sell furnishings or hardware used to update a house
might see the lagging sales before someone else who sells products or services
not related to the housing market. This makes sense. If you own a home and are having trouble paying the mortgage you probably aren’t doing a lot of remodeling. And those in construction or real estate are going to feel the burn of less business since it is their area in which things are cooling down.
Author Rhonda Abrams offers suggestions in this article for
those who may be concerned about feeling the crunch as the housing market
continues to slide some.