When you are in business for yourself, there are many things to consider and keep in check. All too often, we forget some of the biggest contributors. Every business has one thing in common. They all must have customers. Without a customer, you might as well be selling your service or goods to the wind.
One of the first things a potential customer will try to secure when moving to a new city is a home. So, as a businessman, the housing market is something you should pay attention to. Below are some ways the housing market could affect your bottom line.
Supply and Demand
In any business, the law of supply and demand takes precedence over most things. If you don’t learn to balance the two, you could lose some major cash. If you run an auto mechanic shop and only carry 15 in. tires and the majority of the people in your community have 17 in. tires, you will lose money on the 15 in. tires and you will also lose customers.
They will no longer have a reason to come to you for tires and most won’t wait if they know they can get them a few miles up the road at your competitor’s shop. You also have to keep in mind the number of customers you see on a regular basis.
The housing market will affect that directly. As people move to your community, how large the price, taxes, and closing fees are will determine whether or not they move into your circle of business.
As people begin to move into your community, the demographics of said community will change. It is a good idea to have a business relationship with several realtors. This will allow you to keep up with the changing interests.
For example, if you are grocery store owner and one year you find out from the realtors in your wheelhouse there have been several vegetarians suddenly flood the housing market in your area, this allows you to correct your stock orders. Here would be a smart decision to pull in multiple vegetarian options for your new constituents.
In another scenario. If you run a pediatrician’s office and you discover that you have an influx of elderly into your community and the young families are moving out, it may be time to move your business to another location.
When you started your company, I’m sure that you planned for it to last longer than a month or year. Planning for the future is just good common sense. With that in mind, as the housing market goes, so does your business.
As mortgage rates go up, home buying will slow down and so might your business. On the flip side, as they go down, it becomes easier and more enticing for young families, especially, to buy a home and your bottom line may grow quite suddenly, if you know how to take advantage of it.
An intelligent move would be to keep track of the mortgage rate trends over several years. This will give you an idea of what the future holds for your business and will help leave the surprises to a minimum.
In the end, the housing market is really kind of like a lighthouse showing you the way to shore. When you pay attention, you will be able to steer your business home to larger, more stable profits.