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Interest Rate, Market Stability, and Your Business

As we mentioned in a previous blog post, the Federal Reserve is responsible for creating much instability in the economy, specifically when it comes to selling businesses. However unfortunate, manipulation of interest rates is not the only way that the Fed can negatively affect the market. Along with artificially low interest rates, inflation also rears its ugly head, bringing with it currency devaluation and therefore rising prices.

This past year alone, we have seen a dramatic increase in the price of consumer goods, as well as the unfortunate jump in the price of food and energy costs. The consumer price index increased 5.4% since 2020, which happens to be the largest spike on record since the Financial Crisis of 2007-2008. But it’s not only an increase in the cost of living, but all markets are unfortunately affected by inflation, which means that selling your business in these economic conditions becomes much more precarious.

Not only will the increase in price dissuade potential buyers, but inflation also spectacularly decreases consumer confidence, not just in the performance of the business being purchased itself, but the entire economy becomes a place of uncertainty and dread. No one is sure when the next market correction will occur, and buying a business becomes a new way to rearrange deck chairs on the Titanic.

If you are looking to sell your business under these conditions, it’s best to have the help of a professional business broker in order to navigate the incredibly murky waters of the current market. Contact Broker Matcher today!

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