In a post that may seem entirely unrelated to the last one, this is the post that caused the last one to ferment and be put out there first.
So let’s look at Aleppo, we know bullets and shells and RPG’s have pounded the shit out of it for years, so what has this done to property prices, can you find a place to rent, and if you can, can you afford it?
Well a quick google search gives world bank “data” for 2015, for Aleppo and Syria as a whole. Even though they basically admit they have no real data for Aleppo, they can still come up with values and numbers, and the numbers are frankly insane.
That is insane from the perspective of “you’d have to pay me to live there” but of course there is, as always, a large indigenous population that doesn’t really have that choice, so I suspect that the reality on the ground is that rents are more than most people think shit is worth, but what can you do when you live in a shoe, but you will also see large changes pre and post ISIL/ISIS/CIA because it is the whole economy that takes a beating, not just private rental.
In my own area here in the UK I’m currently looking at industrial property to rent, and if these things go in steps or tiers then the first step is around about £8,000 per annum for around about 1,000 square feet with a roller shutter door and a WC and not much else, which makes it £8 per square foot per annum.
I did look at one yesterday that works out at £4,500 per annum for 1,800 square feet which is a “mere” £2.50 per square foot, but when you compare the two it’s obvious why there are differences, the cheaper one has all sorts of issues that make it simply impractical or impossible to consider for many trades, for example you’d never get a vehicle in there, maybe a motorcycle but nothing larger, too many obstructions, nor could you use a pallet truck and simply drag it and cover 100% of the floor area, it would be more like 20% then some steps then another 25% then there is the upstairs which is dark and dingy and has an asbestos roof…
The “common knowledge” is that open yard space runs around £2 per square foot and small modern unit / workshop space runs around £7.50 per square foot, and this is the bottom step on the ladder.
The next small step up takes things to the £11/12 per square foot where the fitting gets you a half decent office / reception area and generally slightly better work space in terms of quality.
And at that point I could say all sorts of things about what could and should and would etc, but the fact is at £8-10k p.a. there is a selection of places I could move in to tomorrow.
The £4k p.a. places are a lot rarer, partially because most of that old brick and asbestos construction stuff has simply gone, but partially because there are more people around prepared and able to venture that kind of money.
The 8-10k places it doesn’t sound like a lot, £9,000 / 52 weeks = £173 a week, add light and phone and you’re at £200 a week, and you can make an argument that a small business should be able to generate that, but if you’re prudent you won’t even think about moving in until you’re generating that sort of surplus week in and week out.
The £4.5k p.a. place I looked at, I’d take it at £2.5k p.a. because frankly it’s worth it for £48 per week as storage space, I can quarter fill it tomorrow with all the junk that is filling up my double garage, and by junk I mean old motorcycles and tools and equipment, none of which is especially worth anything if sold, but none of which I really want to part with either, just in case…lol
You see the unspoken issue here is BUSINESS premises, it does matter a measurable amount what potential customer’s first impressions are, and while there is not necessarily anything wrong with an old brick built thing, there is a lot wrong with a neglected old brick built thing with redundant wiring and plumbing hanging off the walls and with skips and containers racked up outside and seagulls nesting in the roof down the side of an alley in an old run down estate, when compared to a new steel and block unit on a new estate with all fresh paint and fixtures and fittings.
Which is the same issue with Aleppo, or anywhere else, “who the fuck would trade from here?” is the first impression anyone would have.
So there are very real parallels and connections between all sides of what we glibly refer to as “the economy” and the general state of society, and the cost to get in the door as an entrepreneur and start up your own business.
Here in my region you’re looking at £200 to £250 per week for a small modern workshop unit on an industrial estate, I can get one for half of that 20 miles away out in the sticks, but that doesn’t help me here… or as we have seen I can get one for half of that here, but it’s a shithole.
I’m not going to venture that £250 a week just on the off chance that I can earn it back, it simply does not make good business sense, I’ll be back where I started financially, so, there are only two scenarios where I will jump.
1/ where I stand a very good chance of increasing sales by considerably more than £250 per week because my shiny new premises attract more customers and also allow me to worker smarter and more efficiently.
2/ where I simply do not have a choice because I can’t work efficiently enough or meet demand during whatever interim / startup arrangements I had, eg working out of the spare room / fred’s parking garage / jeff’s lockup / steve’s container…
These are two very very different scenarios, the dictionary definition of entrepreneur is “a person who sets up a business or businesses, taking on financial risks in the hope of profit.“many entrepreneurs see potential in this market”“
And the fact is that only scenario #1 above fits the entrepreneur, and the fact is that 100% of all anyone ever thinks or talks about when they talk about the economy is scenario #1.
The person who takes on the risk of each small block or section of a dozen or so units as described above is of course an entrepreneur, a if they build or finance with a loan 12 units provided they can get 9 or 10 occupied they are ahead on the deal, they can’t then aim for 100% occupancy by lowering the rent on the remaining 2 or 3 as the existing 9 or 10 tenants will be up in arms.
So it is very very very important to understand that this entrepreneurial school of thought and business will never ever ever drop prices, it’s not a supply a demand thing, another fantasy as also beloved of economists, it’s more like the stall speed of an aircraft as mentioned before here, if the plane falls below stall speed it crashes and everyone aboard dies, and the entrepreneur who funded the development makes sure he isn’t ever aboard that plane.
Joe Bloggs property developer does not fund that shit, Joe Bloggs Property Development Inc does, and JBPD Inc can go down the tubes and crash in flames and leave Joe Bloggs standing.
Which brings us to another principle beloved of economists, that of externalising risk, JBPD Inc is Joe Bloggs way of externalising risk.
But back in the real world risk is like pollution or waste or any other burden, you can externalise it all you want, but it is still there, so you need someone else to shoulder ever increasing portions of that risk.
Down at the small end of the scale of the individual start up entrepreneur like me, that means people like me are expected to shoulder not only all my own risks, but also all those risks externalised by everyone above me in the business chain, from commercial premises landlords to “fantastic” corporate customers who expect me to give them 30/60/90 days credit.
And when that all progresses past a certain point, nobody is prepared to do it, nobody except the foolish who will use their house as surety on the new tanning salon and cup cake emporium that is…
And *that* is where we are now with the economy, and I suspect that despite the absence of bullets and mortars and RPG’s, things are not too different on the ground in Aleppo.
If you look at all the official stuff you’ll be told that we as a nation are starting up more businesses year or year than ever before, dig a little deeper and you’ll find darker statistics, 50% of them fail in the first year or two, 90% of them fail by year five, and by fail we mean crash and burn, nothing left, we aren’t even looking at those working 80 hours a week at less than minimum wage to try and stay afloat.
Dig deeper and you’ll come to the big five reasons they all fucked up.
- a flawed business plan (cup cake shop)
- poor management (can make cup cakes but not balance a cheque book)
- poor visibility (cup cake shop ranked 99,999 in fuckbook list of cupcake shops)
- not knowing competition (walmart cup cakes)
- red tape (cup cake shop never did or filed any accounts or paid any taxes)
Nowhere, ever, in any of these lists of five things to avoid, is the 800 lb gorilla in the room, which is that no business has any hope *whatsoever* of surviving if it is overburdened from the start by other business’s externalised risks.
And by overburdened I mean accepting *any* of them.
Of course, and this is the real point of this article, this doesn’t only apply if you are thinking of starting a small business, it applies to everyone everywhere, because this is the very core nature of the economic climate that we all inhabit.
A very lucid comment was made on zerohedge a few days about the whole obamacare / repeal obamacare fiasco, the guy said NOBODY NEEDS HEATH INSURANCE, PEOPLE NEED HEALTH CARE…
He was quite right, the problem isn’t lack of skilled medics or medicine, the problem is insurance companies getting in the way and making sure they themselves externalise all risks while making maximum profits.
Economists will tell you that this is simple economics 101, economy and commerce itself is simply impossible without it, please look elsewhere for your problems.
It simply isn’t true, it never was, sure there was an old corollary that the riskier the business proposition the more profit there had better be on the table, and the nadir of that was the south sea bubble or the tulip bubble, vast profits promised, vast numbers of people lost their shirts, that is the way it should be.
And at this point you should be able to see some lines coming in to focus, the whole issue of externalising risk and putting it on to someone else so that no matter what, you yourself never lose out, and Brexit and Trump getting elected and the rise of the nationalist far right in general and of course that fucking white man Putin, and of course previous stories here about me getting cold calls about buying a Land Rover, a company now owned wholly by Tata, an Indian company.
YOU THINK you were voting to make “$my country$ great again”, but all the resident incumbents heard and saw was you voting to take away the one good toy/trick they have.
Internalise risk for any and every single one of these mega corporations and they’ll be sued out of existence almost overnight and their “valuations” will literally go from being larger than several countries combined to negative numbers.
30 years ago we laughed our asses off at stupid lawyer happy americans who could sue macdonalds for serving coffee hot enough to drink, and hot enough to scald, and not putting a warning on the cup.
now people are crashing autopilot tesla’s left right and centre and nobody is getting sued and the company is still going…. there was an actual case in the US in the seventies about some dweeb in an RV who put it on cruise control and went in back to get a drink and sued because they company did not warn him cruise control meant he still had to drive.
All that came out of that and the macdonalds bitch and many many many others were companies learned how to externalise ever more risk, and to sell ever more risky products at ever more inflated prices.
BY VERY DEFINITION the technology that allows tesla to make the cars they do can also be harnessed to shut down a car for 15 minutes should the driver even momentarily;
- take both hands off the wheel
- drive significantly faster than either the speed limit or the surrounding traffic
- drive / steer / brake hard enough to exceed 0.1 G in any axis
- repeatedly take their eyes off the road to stare at their mobile / breakfast / book / makeup bag / the bitchez in the mini skirts on the pavement
- indulge in poor lane discipline
- drive a defective vehicle, lights not working or not used when they should be etc
- I could go on.
“Gun’s don’t kill people, people kill people”
Nobody mentions the 4th amendment in 1868 as the point when companies became “people”.
In a country of 300,00 million human beings it’s sure as shit that more die every year at the hands of the obamacare corporate people than died in 9/11, and nobody says shit.
In 9/11 3,000 died and 6,000 were injured.
In 2015 in the USA alone 38,000 died (that’s a 9/11 every 28.59 days) and 4.4 million were injured (that’s a 9/11 every 11.9 hours) but hey, (corporate) people kill people.
You can’t extrapolate from one small guy trying to start and run a business in europe to the global socio/politico/economic scene, but on the other hand neither can you simply dismiss it as being utterly irrelevant.
You can observe how various forces and laws of nature act upon a grain of sand, and see connections to how those same forces act upon whole continents and oceans.
My small business goals and the goals of the businesses and so on in the economy as a whole are mutually exclusive, for one very trivial and simple reason, I belive risk should be apportioned where it is due.. I am more than happy to shoulder the responsibilities of my own risks, I just don’t want anyone else’s.
That simple statement in 2017 amounts to high treason, sedition and terrorism.
Miss or downplay this point in any way shape or form, and you miss entirely what is really going on in the world, and what is at stake, which is the complete dissolution of either the way the MIC has worked for the last 30 years, or any semblance of individual freedom and liberty.