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Thread: is the recession over or just beginning?

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    is the recession over or just beginning?

    the reason i ask is because of the amount of bad debts...comapnies complaining about no work...drop in turnover...battling to make budget.

    i heard one of the elctrical companies has laid off around 600 semi skilled people...as the big projects have come to an end and no new projects have started.

    someone even mentioned that it is like the country is running out of money...no new projects in the pipeline...other than goverment contracts but i for one dont benefit in any way from these tenders becaus even though i am 100 % bbeee i still dont qualify because of the ABC grading now.

    i have started redirecting my bussiness back into other lines like the motor industry who seem to be the only ones still maintaining at this point?

    the construction industry seems to be going on a steep downhill trend?

    or am i talking absolute rubbish?

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    Diamond Member tec0's Avatar
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    Considering that I myself had to close shop due to the big IT guns like Incredible, HP and DELL taking over our district, it didn’t leave any room for small time IT companies like myself. There support and manpower is beyond my capability. That said HP and DELL are killing most small contractors now in the hunt for money.

    I tried to get my own bottle-store going but the Mpumalanga council turned me down reasons unknown. Other than that I am running on the last of my reserves and I seriously don’t know anymore. The collapse of the national qualification framework rendered my qualifications useless now I am back trying to pass the impossible N3 maths. I don’t know I am seriously out of options.

    I seriously don’t know anymore maybe there is no place for me or people like me…
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Moderator IanF's Avatar
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    Interesting thoughts. On my side no big bad debts for a while.
    For collections one powerful tool is on your t&cs is stipulate ownership only passes on payment. Then if they don't pay go back to the company and and start taking back your stuff. I once emailed every I had done business cards for and hadn't been paid. I asked them to bring the cards back. Got a lawyers letter saying I am ruining the orderer's reputation together with the cash, and asked to stop sending out the emails. I stopped as payment had been made.

    One thing is certain is business is constantly changing. I have noticed that in printing trends we are a few years behind USA so maybe have a look what is happening there for your industry. Has anyone seen purls and qr codes big there but not here due to limited internet connectivity. Always look for the next thing it is there!
    Only stress when you can change the outcome!

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by murdock View Post
    the construction industry seems to be going on a steep downhill trend?
    I reckon construction was probably one of the worst hit sectors with the GFM. The only thing that hid that fact was the World Cup infrastructure spend, and that spending spree is well and truly over.

    Overall, I think we're starting a recovery, but I think electrical contracting is still in for quite a haul before it gets back to the levels of about three years ago.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member AndyD's Avatar
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    Firstly we used to generate about 35% of our business indirectly from new construction, that figure is now at around 5%. We went through a quiet few months second quarter last year which hurt and it took the last half of the year to recover. This year we've been running at full capacity and even working weekends and occasionally using sub contractors to do some of the donkey work in order to keep up. The big difference is that our margins have become much thinner than they used to be, even though we've increased efficiency and reduced overheads and costs in many areas we trimmed our prices and margins during the quieter times and our bottom line is still less. That said there's a few projects confirmed for the next few months where our margins are looking much more sensible so time will tell. Overall I think we've not had it so bad as other countries.
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    i remember a similar situation many years ago where people where complaining about high interest rates and battling for work...i couldnt understand why i had so much work i couldnt cope...the difference was they type of work i was doing (mainly building new water trewatment works and seawage works all over the country) maybe it time to relook at the industry and see where the money is...and work like south africans do in south africa...i have already lowered my standards to get more work which is paying off...paying back hands is totally against my company ethics which i can be proud to say i havent done in 20 years...but i am starting to believe if i dont start i will be broke and out of bussiness before the year ended (give it another name then it wont sound so bad...like a finders fee)...at this point in time its about survival...i have a bond to service monthly expenses and children to feed...so the more i get cornered the more i need to stop worrying about ethics and principals...because they sure as hell aint gona pay the bills.

    i have calls every single day now of old staff and just random people begging me for work...i have customers who havent been able to pay their accounts and some who are so far behind on their budget that it is just a matter of time and the bussiness will be shutdown...it might be an idea to take a break for a week or 2 and come back and look at everthing in a different light.

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    Platinum Member Chatmaster's Avatar
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    IMO SA is undergoing changes that most of us are not prepared for and perhaps it hasn't dawned on us yet.

    Here are a few of many factors that imo have a great impact on business atm.

    The NCA

    The NCA had a huge effect on financial institutions. Banks suddenly had to close taps in a big way and this had a big snowball effect. What happened after the NCA came into effect was in a certain way unprecedented. Credit was basically money that didn't exist and when the money that didn't exist suddenly disappeared it effected the whole economy.

    The International Recession

    Just after the NCA hit businesses cash flow the economic clock hit the world big time who was relying on the fictitiousness money to do business. The true effect of this is clearly visible when you look at the USA's current account balance that is running into -$500Bil. SA is also standing at -$16Bil. Ref HERE

    Increased Business Dealings With China

    I am sure we are all aware that China is infiltrating Africa. Now this has a major effect on SA as well, where the government also gave the Chinese BEE status. The Chinese are amongst the best educated nations in the world but also one of the worst paid (Although this is quickly changing). Their labour laws are a joke compared to SA and they can simply hire and fire as they like, ship those back that have been fired and replace them in an instant. Currently China is our biggest import(13%) and export (10%) partner.

    Poor Education

    Education in SA have been going on a downward slope for years as government tried to improve it they actually had the opposite result. The main reason for this is not the theoretical plan or system they applied but rather how they implemented and executed the plan. OBE can only work if the system is controlled and managed by competent people which is not the case.

    Higher education is also paying the price as they take to long to implement courses that are current and applicable to the needs of SA and Internationally.

    Lack of proper technology

    The lack of proper technology in SA, which haven't updated important technology infrastructure since '94 is causing serious problems as well. It causes issues in terms of employment and in terms of doing business globally. Not to mention the fact that education and the direction into which the job market should be going are completely out of sinc. Because old technology is still being introduced into South Africa or not being upgraded, we are lagging behind in a world where business are becoming more and more technologically driven.

    Introduction of new laws

    This one is a biggy imo. I am a serial entrepreneur. When I see a business opportunity I want to grab it immediately. But I have specific requirements in order to do so. First is that my risk must be low. Second I must be able to involve other individuals that I identify as competent to manage the business as a partner. Thirdly I must be in full control of each business until such time that it can continue without me.This means starting a new business for each opportunity I identify in a flash. For the past couple of years government rolled out new laws that in most cases have a good intention but they have a problem implementing. This means that by the time I can officially start a new business in a proper way the opportunity is no longer there. This has been causing major frustrations but I believe I have finally found a way to manage this. However it still remains a frustration. Not to mention the drag new entrepreneurs will have to go through to start e new business.

    I think my point I am trying to make is that imo it is not so much the recession that we have to look at but rather the bigger picture. Business in SA is changing, have we actually identified the reasons for this to be something other than the normal economic clock and the recession? I do not think so. The problem imo is that there are so many factors effecting this fine balance that it is difficult to simply blame the recession.

  8. Thank given for this post:

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    Quote Originally Posted by murdock View Post
    the reason i ask is because of the amount of bad debts...comapnies complaining about no work...drop in turnover...battling to make budget.

    i heard one of the elctrical companies has laid off around 600 semi skilled people...as the big projects have come to an end and no new projects have started.


    someone even mentioned that it is like the country is running out of money...no new projects in the pipeline...other than goverment contracts but i for one dont benefit in any way from these tenders becaus even though i am 100 % bbeee i still dont qualify because of the ABC grading now.

    i have started redirecting my bussiness back into other lines like the motor industry who seem to be the only ones still maintaining at this point?

    the construction industry seems to be going on a steep downhill trend?

    or am i talking absolute rubbish?
    i might be wrong but i think our greatest problem right now is the government trying to take the employment issue into its own hand and asking for 'assistance' from the private sector. most of the people i know are constantly looking for government jobs, whether for security or laziness i do not know. but this has contributed alot to the government dependent population we have that we keep on holding the government responsible for everything that goes wrong in this country instead of doing many things ourselves. and the government is happy to comply in order to secure the votes maybe?!? but either way, capitalism is what creates money, not government. capitalism is what creates jobs with the government's 'assistance', not the other way around. capitalism is what creates infrastructure, with the aid of government. and most of the new buildings i see around where i live are government buildings, and we all know that government is not a business... but it will work out soon....

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by HR-Student View Post
    most of the people i know are constantly looking for government jobs, whether for security or laziness i do not know.
    I've lost quite a few good staff members to this trend

    The latest one (who was really doing quite well with us) actually took a substantial pay cut to move into the government sector. I think he is expecting a payback a little further down the line. I actually got a phonecall from the municipality he started employment with querying the validity of his reported "remuneration from previous employer." Her comment was "I can't believe he left such a well-paying job to take this one!"

    I can't believe it either, but there you go. He's certainly no fool, so there's a story hidden in there somewhere.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member wynn's Avatar
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    Quote Originally Posted by Dave A View Post
    I've lost quite a few good staff members to this trend

    so there's a story hidden in there somewhere.
    Probably a good medical aid?
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