Why the FTSE 100 matters for small businesses in Southport

If you’re a member of Southport’s thriving small business community, it is understandable that you might not be paying much attention to what is going on in the City of London.

You might think that only financial executives, bankers, and the CEOs of massive corporate titans should concern themselves with the intricacies of the FTSE 100; which is the name for the stock performance index of the UK’s largest companies by market cap.

However, this assumption could not be further from the truth. No matter which industry your Southport business is a part of, the movements of the FTSE 100 are highly relevant to the past, present, and future of your venture. Here is why Southport small business owners need to be paying closer attention to the index.

Get a Broader Sense of the National Economy

One of the main reasons that people find the FTSE 100 so valuable as a resource is because it gives a generally reliable indicator of the general direction of the UK economy. If you are trying to decide whether to take risks, scale-up operations, or cut back your business spending, you should always consult the FTSE 100 before doing so.

You can even use a free online resource to explore FTSE 100 futures over the long-term, to get a better understanding of the kind of market cycles that are likely to have an impact on your business. Paying attention to the stock market will help you see the bigger picture.

Learn More About How Your Industry is Performing

While the performance of the FTSE 100 as a whole can help inform your business decisions, it is also important to look at the performance of specific components. Let’s say that you run a small hotel on the Southport seafront. You might, therefore, want to get an idea of how the UK’s travel and hospitality industry is performing, and how business is doing more generally.

To get a better idea of this, you can look up FTSE 100 companies such as the Intercontinental Hotel Group (IHG) or the International Airlines Group (IAG) to see if these industry leaders are feeling confident or cautious about the future. Remember, how the largest businesses in your industry perform can often be an indicator of how smaller businesses will perform in the future.

Learn How Your Business Can Grow

As well as being a reliable forecaster for industry trends and market sentiment, following the FTSE 100 can help inform your own business growth strategy. If you look at how individual companies on the FTSE perform, you will note that specific events and decisions will closely impact the share price of a business.

Perhaps a major company such as Tesco (TSCO) has announced a new business acquisition, and its share price has jumped accordingly. Perhaps an FTSE company from your industry makes a poor investment decision, and news of that decision drags down its share price. These everyday developments can help you make the right decisions for the growth of your company.

All businesses, no matter how small, are greatly impacted by the market and the wider economy. That’s why all savvy entrepreneurs should pay close attention to the ups-and-downs of the FTSE 100, starting today.