Effective business planning means having an in-depth understanding of broader economic trends, along with how these factors influence your company’s long-term outlook. If you’re planning on buying a new business or putting one on the market, understanding how the wider economy is doing will help you invest and calculate a more accurate valuation of your company. Fortunately, several economic indicators give many economists reason to be optimistic about the future.

How Economic Factors Influence Business Activity

Stock Market Growth

In general, the American economy is steadily growing, with several economic indicators pointing to continued expansion. Despite some volatility, the stock market is continuing to reach historic highs, fueled by investor confidence and strong profit margins. The Dow Jones Industrial Average, NASDAQ, and other indexes are expected to grow further as businesses in a variety of industries take advantage of the healthy economic climate.

Low Interest Rates

While interest rates have been rising, they’re still substantially lower than historical averages. These low rates make it easier for businesses that rely on credit to borrow funds, increasing their buying power and the overall amount of economic activity in a range of industries.

Reduced Corporate Tax Rates

The 2017 Tax Cuts and Job Act substantially reduced corporate tax rates, cutting them from 35% to just 21%. Citing these lower rates, many businesses have raised their minimum wages or distributed one-time bonuses to their employees. These actions increase the buying power of the average consumer, which could lead to increased activity in several sectors and higher business profits in the long term.

The business planning professionals at Zoellner Garten & Co.  help entrepreneurs and investors throughout Cincinnati, Dayton, and Northern Kentucky. If you’re planning on buying or selling a business, you can rely on their team to guide your investments and protect your interests. To speak with a business planning expertise, visit their website or call their offices at (513) 852-2400 today.