I have written about this before, but now there’s a much better reason for the proposition.
It’s about the short sightedness of the retail rental market, where landlords want to make as much as possible, as quickly as possible.
Renting a shop in a mall these days is crazy expensive where small business people with nerves of steel easily pay between R20 000 and R100 000 a month for a tiny space.
And that’s the conservative numbers at the bottom of the rung.
Just think about that for a moment.
Before you’ve even looked at salaries, new stock or profit, you have to make enough sales to cover R100 000, while keeping prices reasonable (with small profit margins) so people will come and buy.
And because there’s a queue of interested renters, malls don’t care about people who lose their life’s savings pursuing a dream and failing.
But these days there isn’t a queue of takers anymore.
They are all far too nervous to sign new leases in this pandemic climate.
Most importantly, experts are saying that Covid-19 is merely a practice run for a bigger, more devastating virus to come.
And if that is the case, then now is the time to put plans in place that will allow all of us to continue our lives with minimal disruption.
The big landlords, like the owners of Canal Walk for example, are now forced to relook their projections and as more and more smaller shops shut down (and others are in financial distress), they are having to consider new business models.
In fact, the business world at large will have to reconsider business models going forward.
Blinkered greed or enriching investors as quickly as possible can no longer be the driving force behind their existence.
Landlords could implement a sliding scale rental that is directly linked to a shop’s turnover or profit.
For example, if my rent is 15% of my turnover, it would give me a lot more peace of mind in troubled times, while also motivating me to target higher sales during the good times.
In that way, everybody’s fortunes are tied together and it’s in everyone’s interest to support each other.
But it would also motivate other entrepreneurs to venture into the retail market.