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As I am sitting here working from home due to massive amounts of snow, it got me wondering; if my office is closed, how does weather affect other businesses worldwide? There is no question that weather affects our everyday lives. It helps us decide what we are going to do and where we are going to go, so it's no wonder that it affects businesses too.
Unfortunately, the businesses that are most affected are local businesses. Tourist areas are particularly affected when the weather takes a turn for the worst. Since tourists are often traveling to these areas to relax in nice weather, when a rainstorm hits they are much less likely to spend their money at local shops.
Some of the biggest weather effects on business happen when transportation shuts down. If trains, planes and cars cannot travel as they normally would, businesses suffer. A snowstorm that hit the United Kingdom a few years ago was estimated to cost local businesses about £1 billion! Rainy weather has had huge effects on local businesses in Singapore in the past few days. Businesses along Orchard Road are not seeing the large crowds that they typically get this time of year.
Some investors are even convinced that businesses that rely on the weather are not good investments. Seasonal businesses are often greatly affected by the type of weather that occurs. For example, a ski resort that experiences a winter with small amounts of snow will certainly not see the ticket sales of a typical winter. Another example is a golf course that encounters an unbearably hot summer; sales will certainly not be up to par. Still, with ideal conditions, a seasonal business can thrive and be extremely profitable.
Whether to invest in a business that relies on weather is up to you. Luckily with advances in technology weather has become less of an issue for businesses than in the past. Transportation methods can better handle less than ideal conditions and online businesses rarely see a dip in sales when bad weather hits. Still, there is no question that one bad storm can wipe out a day's business, despite technological advances.
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