Noosa Boardroom Serviced Offices

This article was written by Anne Lawrence from Boardroom Business and I thought it was appropriate to post here.

He was mad!  He was the maddest I have ever seen, and this was a significant departure from his usual mild mannered and happy disposition.

So what got this local business man so worked up? Unfortunately, it was another business closure here on the Sunshine Coast.

But this wasn’t just one isolated closure, it was one in a long string of closures over the last 12 months. 

You know how the news goes: “Did you hear about xxxx?” “Oh no! Not them too?”

Trying to work out why this is happening is not something businesses wish to debate in public in case whatever ‘disease’ is out there will be caught by just whispering about it.

When it does get discussed, it is done in a very summarily manner and people seem to generally point the finger at both the economic situation and the decline in tourism. Two factors out of our direct control.

Others attempt to raise a potential lack of skills by the operator in question, but blaming small businesses is now considered poor form, particularly due to this growing trend from which few are immune.

The current distinct lack of customers and high fixed costs such as commercial rents are two seemingly significant immovable barriers facing most local businesses on the Coast. 

If this continues, small businesses are going to be continually squeezed out until the long-term economic correction takes its course and without intervention, we will face further losses and more local pain.

Throwing money towards tourism advertising isn’t the answer, because with such a high Australian dollar it doesn’t matter how alluring you make the Sunshine Coast, it is still going to be nearly 2-3 times the price of a similar holiday elsewhere.

So if the customers aren’t coming, then local businesses have to tackle their fixed costs, and this leads us to commercial property rates…… 

I like to describe the current situation as a dual to the death between the landlords of commercial property and small businesses.  Those who locked themselves into a long-term lease are now paying the price and unable to negotiate out. 

Those who try to negotiate get blocked with either a flat NO by the landlord or get told that the landlord is himself held a prisoner by the banks and hasn’t the capacity to reduce the rates.

In the long run, many local businesses will have no choice but to shut up shop. 

The landlords in turn then have a vacant building and if there are a few vacant buildings around then at some point they are pressured to lower the rate for a new entrant.

This scenario however favours the commercial real estate sector and new entrants to business and significantly disadvantages those valuable locals with long and often successful track records, the very people that should be around in the future to be our local business community leaders and mentor the new business entrants.

The answer, I believe, is in talking about it and working together to help solve the problem. 

We need to collectively dissolve the mistrust between commercial land lords, agents and business owners and accept the fact that everyone is doing it tough and no one party should take advantage of the situation.

Are there any other options? What do you think?

By Anne Lawrence, Boardroom Business