Carnage All Around Me

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Survey done in April and we have only been open a short while from lock down with many companies barely covering monthly expenses today. The lock down was too long and even a miracle can't save a large percentage of them. This is carnage.

With all the upheaval going on now in the local economy everyone is tightening their belts hoping for the best and expecting the worst. Not everyone though and the ones that have money are going out on shopping sprees. Unfortunately some ones misfortunes are others fortunes and that is how life works.

My business partner has been buying industrial property as many businesses have closed. You may not notice as when you drive by these mini industrial estates with many companies inside it looks normal. The damage the economy has done can only be seen from inside though and it is not pretty.

The one industrial complex he was at yesterday I know very well and is in a prime location with over 90 units. Many of the businesses that use them are smallish family businesses with around half a dozen staff members. This complex normally has a waiting list of tenants hoping to pick up a rental.

What he told me was scary as out of 90 odd units 52 are now standing empty so in 6 months 52 businesses have closed down out of 90 just in this area alone. That is frightening statistic as how long did those companies take to get going and that is many livelihoods that have bene altered perhaps forever.

This sounds about right as a survey conducted in May with 2200 businesses reported that over half the businesses would be shut within 3-4 months if things didn't improve. Only 7% confirmed they would be fine with extended periods of closure or reduced business. Business has been decimated and we have no help from the government.

Unfortunately now is the time to buy as negotiations will be very simple. It is a buyers market and you set the price with walking away an option as there are 51 more opportunities in this case. I expect him to pick up quite a few and most likely do a bundle deal where he could pick up 10 or more at a seriously reduced price.

Money makes money and without it you have no ability to make more. This is the difference to the haves and have nots and is as clear as day. Thankfully he is on my side being my business partner as I know the company is financially sound with his backing.

I am not in his league right now but the plan is to get there at some point and be able to take advantage of situations that present themselves. I hate the idea of scoring on someone else's misery and broken dreams, but if you don't someone else will.

I have told him to hold off spending too much as I believe the worst hasn't hit yet and my prediction of a black Easter for many is still on the cards. There are 4 months to the peak point I believe and anyone struggling at this point financially wont make it. The holidays don't help and the lack of demand is so apparent in what I am seeing right now.

One of the biggest courier companies in South Africa orders roughly 2000 rolls of pallet wrap per month from me during this peak period. Last month it was 600 rolls and today for December placed 800 rolls. That to me is more telling than anything else as that is proof first hand how dire the industry is right now. You can't change how you pack so this tells me the business has shrunk by 60 percent and guaranteed job cuts and a recession is on the doorstep.

The last thing anyone needs right now is more bad news and needs the good feel factor back in our lives. Patience will be needed and with a little luck we should all be fine. What I find strangely weird is many people are oblivious to this around them talking about going to the beach on holiday for Christmas and having a good time like everything is normal. I have already politely turned down one such invitation saying how busy we are and thanks, but no thanks.

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