Authentic Italian Woodfired Pizzeria
Sunnydale (Foodzone) Tel: 021 785 2669 • Muizenberg Tel: 021 709 0590
E-mail: post@peoplespost.co.za
Tuesday 28 June 2011
Tel: 021 713 9440 Fax: 021 713 9481
Crunch time for business owners DALEEN FOUCHÉ
S
EVERAL small businesses in the Fish Hoek Valley and Simon’s Town have been left with little choice but to close their doors. The combination of tough economic times, coupled with overall poor market research, resulted in these closures over the past few months. Robyn Erasmus, co-owner of Business Basics, which offers startup services for the small business owner, says she has found through her work with prospective business owners that they do not always do thorough market research before investing in their new enterprise. She says many people think their “great idea” is enough to make a business succeed. But Erasmus says that as a rule, very few small businesses succeed. Her advice to entrepreneurs who buy a business is to not just trust the previous owner for information on the business, but to rather “do their homework first”. Gerald Musikanth, chairperson of the False Bay Tourism and Business Association, says there will always be “casualties” among small businesses. He says the three main reasons small businesses fail are high rent, bad location and bad management. Musikanth says tourism plays a big role, especially in smaller businesses, in the Far South. “Tourists
help to keep smaller businesses alive,” he says. But Musikanth believes the authorities are neglecting the Far South in terms of tourism marketing. “Tourists are always directed to the city and the Waterfront,” he says. Musikanth says that business owners do approach the False Bay Tourism and Business Association for advice, but only once the business has opened, and not beforehand. Musikanth says business owners who do market research do not always gain accurate information. Dave Hurwitz, owner of the Simon’s Town Boat Company, who also gives talks on business, attributes the business closures to a “tourism recession”. He says it is affecting the entire Cape metropole. When asked if all business is closely linked with tourism, Hurwitz says “definitely”. He says many businesses owners will deny this, but one only needs to look at a business income over the school holiday, and compare this to other times to see that business in the Far South is closely linked with tourism activities. “During the December holidays business is good,” he says. “But then it takes a plunge, up until whale season in July.” Hurwitz advises business owners to take full advantage of the “peak times”, in order to save for the “slow times”.
MYSTIFIED: The Roman Rock lighthouse emerges from the mist as a big flock of birds goes by. The photo was taken from Boulders Beach. Photo: Gerhard Slabbert
“I have seen businesses closing at 16:00 during the holiday season because they think they are making enough money.” He says living costs have “skyrocketed”, with rates, fuel, electricity and medical prices all rising. Hurwitz agrees with Erasmus, and says market research is essential for a business. He says he has seen how an entrepreneur opens a curio shop next to an existing curio shop in Simon’s Town because the entrepreneur sees how successful the idea is. But Hurwitz says it is only a matter of time before both curio shops close, because now they have to share their customers. Hurwitz says disposable income
for the consumer has also dropped. “The first thing people cut from their spending budget is tourism activities.” He advises small business owners to do away with low-profit, quick-turnover products. He says he largely focuses on quality and popular products. Skye Grove, communications manager for Cape Town Tourism, says the tourism sector in general is battling to cope in the face of tough economic times, and rapidlychanging travel behaviour. “As a long-haul destination overdependent on markets hit hardest by the global economic recession, and still plagued by seasonality, the city’s tourism sector could face a
further decline unless decisive action is taken.” But Cape Town Tourism cautions against “alarmist statements” about a tourism crisis. “We are in the middle of winter, traditionally a very tough time for the tourism sector in Cape Town,” says Cape Town Tourism CEO, Mariëtte du Toit-Helmbold. “This is reflected in the low occupancy levels currently experienced by the majority of the industry. The increased supply, decreased demand and lingering recession add to the challenges the tourism sector faces. “There are signs of recovery, albeit at a slow rate,” she says. daleen.fouche@peoplespost.co.zo
Seafood at its best BOOK YOUR TABLE BY THE SEASIDE AT 021 782 3354
Great Venue Great Menu Great Value
ONLY!
DUO OF SUCCULENTLY GRILLED SOLE AND 6 LARGE PRAWNS,
SERVED WITH FRENCH FRIES, ONLY! SAVOURY RICE & A SELECTION OF SAUCES
R89,50
(Valid until 25 July 2011)
R49,50
(Valid until 25 July 2011)
TRIO OF CRUMBED FILLET OF CHICKEN BREAST, 3 CRUMBED PRAWNS & DEEP FRIED CALAMARI SERVED WITH FRENCH FRIES & A SIDE SALAD
THE BEST THINGS IN LIFE HAPPEN ON A BAYSIDE!