Why would a business blog talk about politics?

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For anyone that has been following this blog at all over the past year, you likely noticed that I spend some time talking about politics. Although most of the time I directly link it to the importance for business, sometimes I don’t actually make mention of how the topic is important for business.

Well, the fact is that politics impacts business on many levels. To start, a business must be located somewhere (or many places at the same time) and has to operate within the rules set out by that government. This alone can be the difference between success and failure for a company. Businesses want to be located in a place that makes it easy to sell the products/services they are selling. They also want low tax rates to allow them to keep more of their profits.

International politics play a big role in the life of a business because it often times dictates where a company can expand to. For instance, due to international political issues at the moment, I would be wary of investing in an American company that does a lot of business in or with Iran. However, this may not have been such a big deal 5 years ago. Politics creates, destroys and changes business opportunities around the world and a good business person has his/her ear to that pulse and can react quickly to it.

This is easily shown by looking at the stock market. On many occasions, the stock markets in New York and across the world rise and fall for reasons not having to do with companies or the home country directly. When Greece began to have serious budget problems, the stock exchanges in North America were quite jittery. This is despite the fact that the U.S. is not that heavily invested in Greece and Greece is a grain of rice compared to the size of the U.S. economy. However, it showed that perhaps more European countries had similar problems which were more closely tied to the U.S. One would have to know politics and how the world works in order to correctly make those connections.

In other words, politics is directly linked to business and entrepreneurs and companies need to be aware of those types of current events in order to be successful.