OUT TO LUNCH
To start your own business you have to be extremely brave and possibly, with hindsight, a little bit mad. Of course, at the time it doesn’t feel much like madness. Rather, it presents as the most incredible abundance of self confidence because you just know that you are going to succeed. Why else would you take all the associated risks?
It’s not easy to leave the corporate world with it’s management meetings measured in how many trays of tea and biscuits have been brought into the boardroom, it’s soft house loans, the company BMW, the expense account , the personal assistant to book restaurants and flights and, let’s be honest, the social standing that often goes with such an appointment.
When I eventually decided in 1987 to leave the corporate world and strike out on my own to start a brokerage for a financial instrument that barely existed at the time I ran the idea past my wife. She said that even if it failed and we had to live in a tent she would back me 100%. Fortunately it never came to that so with a few fellow shareholders and some staff we opened for business in March 1987 trading in the, as yet, informal bond options market.
When we opened for business this market was a pretty chaotic affair and what was known as the “standardised” option was only introduced by the Eskom treasury later in 1987. This development meant that options now had a fixed quarterly expiry date and a fixed expiry interest rate. This led to greater market credibility (particularly with Eskom treasury’s backing) and pretty soon trading volumes increased and banks were starting to make a market in bond options.
All this helped develop both the breadth of the market (the number of traders) and the depth of the market (the liquidity of the market). It looked as though we had started our company at just the right time.
I always rationalized that being your own boss was probably first prize because if you ever lost your job you knew exactly who to blame. But it wasn’t quite as simple as that. There was office rental to pay, there were admin staff to be paid, there were bank charges and there was also me to be paid.
Pretty soon I started waking at three in the morning in a cold sweat wondering whether we would even manage to cover our monthly overheads. We needed to make X amount of profit each day just to break even and if we had a lean day’s trading we needed to make 2X the next day and so on. Holiday months like April became a nightmare because the number of trading days was substantially reduced by public holidays and one thing you learn about running your own business is that you never get ill.
Those days of phoning in to your employer to take your statutory “sickie” are long gone. If you’re not in the office as a small business owner then nothing is happening.
I mention all this because I imagine a lot of business owners in the hospitality sector are waking at two or three in the morning with similar feelings of panic. In fact, most people I talk to are waking early in the morning with a feeling of hopelessness and panic for any number of reasons. Will the children ever be able to return to a normal school life? When will we be allowed to re-unite with our loved ones? What’s going to happen to the child who was due to graduate this year? How am I going to pay my bond and my car lease payments if I lose my job? Am I about to run out of survival possibilities?
Last Sunday Pres Ramaphosa appeared on TV and dropped the bombshell that alcohol was once again banned with immediate effect. This is apparently because the pressure on hospital trauma units is so great coping with alcohol related incidents that the treatment of COVID patients is seriously threatened; although little or no hard evidence is presented to support that claim.
I would hate to be in the position of having to run a country with the COVID threat hanging over it and Boris Johnson’s UK government is experiencing much the same sort of lambasting as is ours. The difference is that the ANC has long treated South African citizens with such utter contempt that it is now impossible to find anything they say remotely credible.
Many suspect that the tobacco ban is very likely to lead to Mama Zuma electioneering coffers being filled from the proceeds of illicit tobacco sales. For much the same reason we have a niggling feeling that an alcohol ban will also lead to strange flows of money to the ANC.
After all, despite the smokescreen of the sainted Zondo commission, SA is still ruled by a bunch of gangsters so anything goes. We have people telling us what to do who, in many parts of the world, would have long ago been placed in high security prisons.
It’s a pretty safe bet that most of our politicians have never run their own businesses. Hell, most of them haven’t even managed to hold down what most of us would describe as an honest job. They survive very handsomely on dodgy tenders, kickbacks, palm-greasing and emptying banks of other people’s money (coming to a courtroom near you but not very soon).
In addition we pay them well over R1mln a year plus heaven knows how many expenses and freebie trips (that’s why we need SAA comrades) to stir the race pot and try and bring white monopoly capital to its knees.
Tourism was supposed to be one of the areas of employment which would help create much needed new jobs within the economy. The ANC killed that hope last week and don’t seem remotely concerned about the consequences. But why would you when you’re still being paid a full and very generous salary to bring down capitalism, particularly in the Western Cape?
Take the example of my friend with the restaurant. He employs staff from Zimbabwe, Malawi and South Africa. All legal. All registered. All with families to support. All was going well until March and business was humming because he is damn good at what he does.
Now he has had to lay off staff because he is reduced to selling toasted sandwiches in the morning or a full sit down masked breakfast if you can cope with that. You don’t cover costs with that and forget about ambience.
In the evening he now has to close at 7.30pm latest so his staff can clean up and get home before curfew. He cannot sell wine with a meal because we men apparently can’t have a couple of glasses of wine with our dinner without going berserk and sticking a knife in the neck of our companion.
This, sadly, is the ANC’s official narrative on alcohol consumption. So how can any of our restaurants, our beacons of culinary excellence designed to attract foreign tourists to the Western Cape hope to survive? But don’t worry. At least the politicians making these decisions are doing all right.
Now take my friends with the guest house. Last week it was announced that leisure stays would be allowed but that was rescinded a few days later because it was released “in error”. There is no foreign tourism at the moment and there is no inter provincial tourism. But you might have been lucky enough to attract some locals who wanted to escape home after nearly four months incarceration and spend a heavily sanitized few days in the winelands to try and regain some sanity. Bad luck.
That window of opportunity was open for 48 hours and is now closed. So my friends with the guest house have empty rooms, no income, wages to pay (they are decent people and are paying their staff full wages for now) but no hope for the future.
Normally their bookings for Sept to April would be 80% full but not this year. The foreign visitors who love them so much and come very year cannot get here.
Theirs was a vibrant and hugely profitable luxury guest house and could have been sold, when they chose, with a large chunk of “goodwill” included in the selling price. That would apply to many other establishments in the same part of the winelands. Well, that is not going to happen now. SA Tourism is a dead duck for the foreseeable future and the government evidently couldn’t give a tinker’s cuss.
However, it’s not all bad news. The people who make these decisions in our best interests are all financially secure and without a care in the world. And, sadly, that’s the way things are bound to continue. The many thousands who have sunk their life savings and borrowed heavily to invest in our tourism industry and create jobs have been hung out to dry by the ANC. But, since none of the people making these decisions will suffer any financial loss, why should we look surprised?