Saturday, February 23, 2013

Revolutionary Ideas Part 16 - Up With Small Businesses

Today's topic was one that came to mind immediately when I began this series of posts, and now it is especially timely.

So there's been quite a stir in Halifax over the past few weeks as a whole raft of local small businesses have been shutting down... I won't list off the list of names but I can't think of almost a dozen.  And when a business shuts down sometimes there will have been factors that the business can control, but there are other factors that maybe, we as a society can help with.  

Factor 1.  Everybody, let's all try to be a bit less cheap and lazy.  Yes, it is easier to shop at a big box store managed by a global corporation and the prices are often great.  But realize with every dollar you spend at one of these stores, that could have been spent elsewhere, you are casting a vote for the kind of world you want to see.  Do you want a world where there are no small mom and pop stores, where nobody with an inkling to take a run at being a business owner has a hope in hell? Where the youths of our nation are transformed into legions of uniformed zombies? Then, carry on! Shop at Wal-Mart!  Or, do you want a world made up of a diversity of interesting businesses, with healthy, independent, happy people and communities? Then Buy Local!!! This is a choice we must consider with each and every purchase.  Stop seeing your dollars as dollars but more as ballots being cast in a global election for one world or the other.  There is almost always a choice.

Factor 2.  Landlords and Governments, let's all try to be less stupid, short-sighted and greedy.  Yes, it is easier to let a few huge corporations buy up all the land around the city and turn it into high rent business developments with the promise of jobs, jobs, jobs, but when you do this remember that you are contributing to an epidemic of unsustainably high overhead expenses for those who would dare open a small business.   Rather, you are catering to larger franchaises and globally owned corporations.   Landlords, when your building has been paid off 20 times over, why not give your commercial tenants a break on the rent? 

Halifax Mayor Mike Savage, how about you cancel a certain crooked developer's permits (not naming any names) and instead design a mixed use building that would provide low rent to local small businesses? It seems to me that all these wonderful creative people get drawn into the allure of running a business, like a moth into a flame, only to burn up and go bankrupt leaving a landlord, developer or group of real estate investors holding the bag of money.  How about giving these people a hand up, with affordable rent, or rent to own opportunities.

Scott McGillivray of HGTV Canada's hit Canadian TV show Income Property, Why can you not use your good looks and power to encourage people, that, not only can they take cheques to the bank, they can use their wealth to help their fellow Canadians become wealthy? Why do all of your guests insist of charging top dollar for their rentals? Why can't you tell them about the wonderful feeling you can get from creating a beautiful home or business rental for someone, and then charging below market rent? To use your good fortune and wealth to create a happy, healthy, sustainable community? Why Scott? Why Why Why?????? Please tell me Why.

Scott, I'm a landlord/investor too and am scheming up a wonderful multi use project that would help A LOT of people (very top secret). My husband and I watch your show all the time and think it'd be great if we could get you to help us  design it.  Maybe we could have a special episode of your show called Sustainable Income Property.  Maybe you could help me realize my master plan of starting a philanthropic Real Estate Investment Trust where we help small business owners across Canada rent to own their own multi use buildings.  Maybe we could begin a revolution of good capitalism.  Maybe!!!!!!!  

Everybody watch episode 4 of season 7 of Income Property where they look at the potential of buying a commercial/residential space.  Everyone salivates over the high rent that the commercial tenant has enslaved herself into paying.  Everyone drools over the cash flow, while worrying over the issue of commercial vacancies. NOT ONCE does Scott or anyone else come up with the idea, hey, maybe we could charge the business less rent, so they have a chance to stay in business.  No. Nobody thinks like that.  Why? 

Aha, since posting this I tweeted my question at Scott and he replied:
have to be able to help yourself before you help others. I try to empower people so they don't have to rent.

This is a good answer, and actually we do have a few tenants at market rent which I feel guilty about but we've tried to give them nice homes, and I know that as we pay down the mortgages we won't keep raising their rents.    When I was doing my MSc in Vancouver I was lucky to have one of the best landlords ever, who didn't raise rents for years because he didn't have to, even though his house was in Kitsilano and he could have been charging double.  The world needs more of him, IMO.  And then, in contrast, was my landlord in Regina, a company who rented me a house after my house fire.  During the time I was there, the real estate market boomed, so when I moved out they more than doubled the rent for the next people.  Did they have to? No. They didn't. This house was probably paid off 100 times over.  They did it because they could, and to make profit for their company.

Here is the recent episode of Income Property that got me thinking:

http://www.hgtv.ca/incomeproperty/video/season+7/full+episodes/alison++deirdre/video.html?v=2336644301&p=1&s=dd#incomeproperty/video

And, back to Factor 1, Everybody watch this documentary about Wal-mart

Wal-Mart: The High Cost of Low Prices

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