State of the Nation Breakfast

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continued from part one

After a most entertaining 45 minutes with Clem Sunter we were then handed to Justice Malala. His view points and opinions were less optimistic than those of Clem Sunter.

Justice Malala gave us indicators or flags to look out for in the financial arena. Some of these flags are self-imposed on South African’s by the sheer nature of the people, others are imposed on us by international pressures.

I don’t think I should go into too much detail as we all know if you have read the previous letter we are subject to so many influences outside our own control as well as those we can hope to control. The best advice given to us was be vigilant and work out multiple scenarios before they occur so as to take advantage of any opportunities that may present themselves and limit the damage of any adverse influences in your individual market.

We were all told to make various financial scenarios for different time periods so as to have a short term goal and then some medium term goals as well. Long term financial planning is a bit more complex in a country such as ours. However we can take a very conservative average over the last 30 years which is the time from companies such as Roodt & Roodt would use to base any financial forecasts on.

Some of the more disturbing influences we are all to take note of are the land reform and BEE in big business. In small to medium sized companies it will be more difficult to implement BEE as the share-holder still has to pay for those shares, banks will not lend them money against unlisted companies easily and if they do it will free up large portions of cash monies which will then be available in the economy for further investment and redistribution of wealth. This in my opinion is not all doom and gloom as small companies and some medium sized companies will benefit from the openings created when larger companies unbundle and sell these shares to the BEE components required by law. The redistribution of land as we all know has not worked in any of the countries that have implemented it from Kenya, Zimbabwe and Congo. We could have difficult times and then some good times in between all these changes that will take place over the next 20 years in my opinion.

The self-storage industry and related small industries traditionally benefit in any economy around the world. In the upturn side of the swings people store the old goods to hand down to children and relatives at various times. In the downturn when we are all counting pennies carefully we can store surplus goods at relatively affordable rates while we consolidate our lives. Please believe me when I say our industry will feel the pinch, it will. The big difference is we will survive if we have a good contingency plan in place when the various changes will take place. As most leases are deemed short term leases in our industry we can change prices quicker and easier than other property related industries where 2-7 year leases are common. Keep an eye on the future and learn from the past. Is key in any industry and when a company stops innovating and adapting to its market it will die a slow and painful death?

So in conclusion to a state of our nation we must all take heed to the changes that will take place and search for the opportunities which arise from these changes.

On a personal note I would like to ask that all the formally trained brains in South Africa stop and give the entrepreneur’s the credit they deserve. All over the world these are the people who excel at being successful and share their god given gifts with their new home countries. You don’t need to be a rocket scientist to have a good idea. Help us to achieve our dreams and be part of the next big thing.

Stop all our brightest and best people from leaving us with second best. Some of the best minds in other countries come from South Africa. Yet we never gave them the recognition and praise they deserved. Yes the money does help but just the recognition and adulation would help keep them here so we all benefit from their ideas and dreams. Point in case is Mark Shuttleworth he is still here and making a difference in many people’s lives. Imagine if we could have kept all our great minds here at home building a better future for us all.

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