The general state of the economy changes how much customers spend, what your costs are, and what your borrowing costs. It affects every business, just not all in the same direction.
Consumer income — when real incomes rise, spending rises, and it rises most on luxuries and income-elastic goods. When incomes fall, spending shifts to essentials and to cheaper substitutes, which is why discounters grow in downturns.
Unemployment — high unemployment means weaker consumer demand, and a larger pool of available labour which eases recruitment and wage pressure.
Interest rates — the cost of borrowing. Higher rates raise the cost of loans, overdrafts and mortgages, which reduces both business investment and consumer spending, particularly on anything bought on credit.
Inflation — rising prices. It raises your input costs, raises wage expectations, and erodes the value of money owed to you. Modest inflation is normal; rapid inflation makes planning and pricing hard.
Inferior goods and value brands often do *better* in a downturn as customers trade down. Businesses selling essentials are less affected than those selling big-ticket discretionary items.
Always say which way it cuts *for this business*. 'A recession is bad for business' is not an answer; explain the mechanism from income to demand to this firm.