The bad news in boom times

Have you heard, because of the economic boom, asking rents for some offices or shop space have shot up 50-100%? Imagine, if you were running a business out of an office and your landlord tells you the rent will double up at the next lease renewal. Some businesses have had no choice but to relocate, incurring painful additional costs in the process. Many businesses have also had to pay more just to keep their workers. My lawyer friend who runs his own little firm recently told me fresh graduates nowadays cost more than S$4,000 a month, and they may not even be good enough for the job!

This situation was captured in the Upfront column of The Straits Times on Wednesday, July 25th, under the headline, Boom time doesn't come cheap for businesses.

The writer Erica Tay wrote of Marcus Ng, owner of an interior furnishings company, who was told by his landlord that the rent for his business premises in a MacPherson industrial estate will be raised by more than 30% when it comes up for renewal in three months. Business has been good, but he is not ready to stomach such a steep rental rise. "If I can't bargain for a lower hike, I will move elsewhere."

Then there is VS Kumar, MD of a 100-strong courier company Network Express. His drivers are clamouring for pay rises. "With the current salary you are giving us, our families can't afford to buy the same things anymore," they tell Mr Kumar. The company has no choice but to review salary packages.

The good times have put a squeeze on the supply of commercial space as well as labour, leading to higher rentals and wages. The higher rentals also apply to rents on accomodation, with expatriates asking for higher housing allowances.

When I read about how many businesses stand to suffer as much in good times as they do in bad times, I am glad and thankful for the unique, hassle-free, home-based business that I own. For me, like many other businesses in good times, business has been better so far this year. However, unlike traditional businesses facing the usual headaches and cost pressures, I get to keep all of the extra income.

Nobody gets to tell me to pay more for my rent for I operate out of my office at own home!

I'm sure the rent for our new shop and corporate showcase at the new location in HDB Hub Mall #02-06 is higher than the rent at the previous location. But that's the responsibility and burden of my corporate partner, not me nor my associates.

Wages must have gone up too for the good corporate staff that serve us, but that again is the corporate side's responsibility.

Nobody in my organization ever comes up to me to ask for more money because inflation is pricing things out of their reach. Like me, they get to write their own cheques. If we want more, we just work harder and smarter. It all depends on our own effort and success.

So, good times or bad times, we are fine.

I remember one clever line Eddy Tan, the most successful of Unicity networkers in this part of the world, is fond of using:

"In good times, they eat; in bad times, they do. For us, either way will do" :)