After Coronavirus: 5 Ways the Stock Market Could Play Out

It’s an understatement to stay that the stock market has been on a roller coaster in recent weeks. The Coronavirus pandemic has caused economic uncertainty across the globe. Some businesses have closed suddenly, while other companies are losing money due to limited sales and customer interaction.

The stock market reports have had significant swings from one day to the next as the markets respond to good and bad news about the current pandemic, stimulus plans, and possibilities for re-opening the economy. If you own a small business, then there’s no doubt that your company has been affected by the news stories. How are you faring in these uncertain times?

Hope for the Future

As the reports come in, many people are holding onto hope for returning to a normal life in the future. Governments are looking at options to relax lockdown restrictions as they feel that the virus is being controlled in certain areas.

While you don’t have any control over the current circumstances or the rules that are governing businesses in your area, there are a few things that you can do to prepare for future business opportunities. During this pandemic, it is a time to shift your business efforts and look for ways to innovate your systems, products, and services. The companies that are changing their approach in doing business are those who will survive the economic changes.

Rest assured to know that there is hope for the future. But you need to be prepared to move forward with a different mindset and approach. Now is the time to take action if you are going to be ready for whatever may come in the future.

Potential Scenarios for Stock Market Movement

One thing that will affect business and sales is the way the stock market responds in the coming days. A recovery is possible, but the stock market trends definitely play an impact in people’s confidence about the economy. When households are uncertain about the current circumstances and future opportunities for income, then spending slows… which has a domino effect in all industries.

Even the best stock market analysts and epidemic experts can’t predict what is in store for the future. Here are a few potential scenarios that we might see in the coming months and years:

Scenario #1: Stock Market Bottoms Before Coronavirus Peaks

The worst-case scenario is that the stock market continues a downward spiral before the peak of the pandemic is reached. If the government can’t maintain systems that keep people safe in public, then the epidemic will continue taking a toll on business sales… which has a negative impact on the stock market numbers.

Not only does this possibility affect business owners and employees, but millions of people across the United States will lose money due to investments that drop in value. It’s impossible to calculate the long-lasting impact it will have for the people who lose their retirement savings that were placed in the stock market.

As economists talk about this possibility, they are anticipating that we could reach recession or even depression levels. The sheer number of unemployment claims, as well as businesses who don’t have cash for overhead costs, will undoubtably result in national and global circumstances that fall within the recession and depression criteria. As a result, it will take years (or possibly a decade or more) before we return to the prosperous trends that were enjoyed just a few months ago.

Scenario #2: Continued Uncertainty, Slow Stock Market Rally

As businesses and individuals continue to adapt to the “new normal,” it is possible that the stock market can rally. When businesses can keep the money flowing, then it can help the economy as a whole so that we don’t hit rock-bottom. It won’t feel comfortable because of the ongoing pressure that companies are feeling as they strive to keep the cash coming in. But this scenario could keep us out of a potential depression.

This scenario is a likely possibility, especially as state and federal governments are proactive in easing a plan that brings businesses back to semi-normal activities. It is obvious that it won’t be an overnight change to go from Stay Home orders to business as usual. Instead, measures will be taken to open business doors as it makes sense, based on the safety of the population as a whole.

As the reports have said, ongoing testing and proactive medical care is essential in avoiding another shutdown in the future. So, businesses need to continue doing their parts in maintaining social distancing recommendations. If hot spots start to pop up, then the weeks of staying at home could quickly be undone.

Scenario #3: Fast Resolution, Fast Stock Market Changes

In the third scenario, the virus is quickly contained and people can return to their normal lifestyles. This scenario is only possible if herd immunity is developed or a vaccine is discovered that can be administered to the population.

A fast turnaround would be an optimal situation, but it doesn’t seem to be a likely scenario. If businesses can stay open and government action can stop the long-term effects of a financial crisis, then there is still a possibility of a sharp recovery occurring in the stock market.

How to Protect Your Business in These Uncertain Times

No industry is immune to the effects of this economic downturn and Coronavirus pandemic. But it doesn’t matter what is happening in the stock market – there are things that you can do to protect your business interests and keep the cash flowing. More than ever, it is time to be innovative and proactive in looking for ways that you can solve the problems people are facing during this challenging time. If you can help people get what they need, then the money will be available for your business.

Follow these tips if you are ready to minimize the impact on your business due to a slow economy:

  1. Business Support Stimulus: Take care if immediate cash flow needs by tapping into the various resources that are available to help struggling businesses during this time. Check out our recent blog post for more information about stimulus programs, small business loans, and other solutions that are currently offered for the Coronavirus pandemic.
  2. Design a Plan: Doing the same thing you’ve always done in your business isn’t going to work for the future. As the stock market fluctuates and the virus continues to spread, you need to be sure that you are implementing safeguards to protect your employees and customers. Write out a detailed plan that lists steps to follow if an outbreak occurs in your business. Look for ways that you can adjust current systems and processes to minimize risk while still keeping the business running.
  3. Digital Interactions: When possible, it can be helpful to encourage employees to work from home. Additionally, are there any options to change the way your customers can purchase products and services? If you have a website, explore options to add payment portals or digital distribution so that customers don’t need to visit your local office in person. Look for ways that you can offer delivery or curbside services. Depending on your business, you might be able to make small changes that support social distancing without harming your sales.
  4. Maintain Communication: Be proactive in keeping your customers updated about changes that are being implemented to protect the safety of everyone. Not only will these updates give your customers the peace of mind to know that the risk is minimal when they visit your store. But employees also need to be up-to-date about current policies and practices.
  5. Upgrade Cleaning Practices: Since the virus can remain on surfaces and transfer from person to person, it is essential that you take your cleaning practices to the next level. Sanitize all surfaces as much as possible, with daily routines to keep everything safe for your employees and customers. Make sure that there are plenty of cleaning supplies on hand, and design a system that engages employees in participating in the cleaning responsibilities. Everyone needs to be trained on proper sterilization methods.

Cash Flow Management for Economic Stability

More than ever, a “rainy day” fund is essential to keep your business afloat when future income is uncertain. If you don’t have an emergency fund in place, then right now is the perfect time to set aside a bit of money in an untouchable savings account.

Also, don’t underestimate the importance of working with a financial team that can assist in your cash flow management. As the stock market moves up and down, you can maintain peace and stability in your company by working with an accounting and bookkeeping team that can assist with your unique financial needs.

At Easier Accounting we understand how challenging it can be to stay on top of your financial reports. If you need assistance with tax strategy, payroll processing, or other accounting services, then we are here to assist. Contact us at your convenience to learn more about how our services can support your company during these times of economic uncertainty: (888) 620-0770.

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