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Pessimists don’t make money

South Africa is still a land of possibilities.

The biggest challenge facing the South African economy is not low growth. It is the belief that there is no opportunity.

When people feel there is no path to seeing a return on their money, they don’t invest. And without investment, economic activity stutters.

This sentiment is of course understandable. On a macro view, the South African economy does not look appealing. The strategic plan released by National Treasury last week acknowledges that structural reforms have to happen to change the country’s fortunes.

Read: Treasury has laid down the challenge

However, in an economy as sophisticated and diverse as South Africa’s is, a broad macro view misses a lot of nuance. Low economic growth in aggregate does not mean that every business in every part of the country is seeing low growth. It is an average. Not a limit.

Where is your focus?

It also overemphasises the difficulties experienced by many large businesses, and underrepresents the rapid growth being enjoyed by a number of small businesses.

For example, Edgars may be struggling to survive, but that doesn’t mean that nobody can make any money by selling clothing in South Africa. In fact, it may signal exactly the opposite. Edgars’s problems are likely to be an opportunity for someone else.

One of South Africa’s most successful investors, PSG Group founder Jannie Mouton, sums it up like this:

“If you train your brain to always look at how negative things are in South Africa, you slowly fall behind. But if you focus on the opportunities and not the problems, then you realise this is a fantastic country.”

PSG has generated immense wealth for its shareholders by investing in South Africa – and it continues to do so. That is because despite how the macro environment may look, the growth potential in specific businesses remains immense.

Building momentum

Another example is Geddes Capital, which provides funding to local SMEs. Since it opened its doors two years ago, it has found it impossible to keep up with the demand for funding from small businesses in South Africa, despite never advertising its services.

“Almost every person we’re lending to needs the money for growth or working capital, not to plug a hole,” says CEO Brent Geddes. “They are winning a contract or winning a deal, so there is a positive momentum in their businesses.”

And in two years they have never had a company default on a loan.

“There is a huge opportunity for SMEs,” says Geddes Capital chief investment officer Warren Deats.

“You can say what you want about South Africa’s economy, but there are still loads of R5 million businesses that need R500 000 to grow to R10 million businesses.”

It’s telling that Geddes Capital has found this to be the case across many sectors. Small businesses in many parts of the economy are thriving.

“I hate the negativity we read all the time,” Deats says. “Through adversity comes opportunity.”

Geddes Capital has seen this from companies in areas as diverse as biofuels, retail, logistics and health food. Particularly they are seeing how nimble, smaller players are taking opportunities that their larger counterparts cannot.

It’s never the ideal time to be in business

“With a little bit of support from a lender or funder you can go from being a R3 million business to a R10 million- or R15 million business quite easily,” says Deats.

The reality is that the business environment in South Africa has never been ideal. But that hasn’t prevented some outstanding companies from being started and growing into extremely successful enterprises here.

There is also no more instructive example of how opportunity always exists than the list of global businesses that started during the Great Depression in the 1930s. They include names like Fisher-Price, Porsche, Walt Disney Studios and Samsung.

“Countries go through ebbs and flows,” says Deats. “Yes, the economy is tough, but there’s an opportunity to develop, an opportunity to grow, and there is money available to do it.

“If it was easy, it wouldn’t be profitable,” he adds.

“Where there is money to be made, it’s because it’s not easy. But if you’re pessimistic you will never see the opportunities.”

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Nice, if you can’t create or commit, then don’t say anything. Easy as that

So you’re saying if I do market research and determine that the risk of starting a business is far too great compared to the reward that I should not say anything?

Are you one of the people that is looking to ban free speech? Sure sounds like it.

I’ll just quietly go then I guess…easy as that…bye…

One mans pessimist is another mans realist. What really gets to me is that quite those always ready to sing hosanas to the how great SA is and what an ungrateful lot we actually are, are nearly always those with dual passports or the wealth to migrate easily.

When things goes properly pear shaped the Mouton clan will be long gone, living off the rainy day fund they squirreled away in some tax haven.

I will also not surprise me if Mr Cairns has a second passport or an UK ancestry visa.

Joe Soap or more likely Jan Seep, does not have this luxury yet these hypocrites are always ready to dress the great unwashed down for not sharing their unbridled optimism for #proudlySA

Lots and lots of opportunities here in Azania. First place to start would be Jules St. Malvern where some bright young App type could whip out her/his smartphone and with one flick of the icon digitally reproduce the over 100 vehicles burnt to ashes last Sunday evening.Likewise, the many structures burnt beyond repair in Jeppestown.
Shame on any doomers out there!
Another Azanian golden opportunity would be the incoming natural disaster …ooops..scheme called the NHI, the mind goes positively giddy at the thought of of the many ‘openings’ that the NHI alone will present to the more nimble financial types among us here in Mzansi.

All the Dr’s will just continue to consult as Western Method Witch Healers, they will be sangoma’s outside the purview of the system and we will have traditional healing financial assistance plans…

So easy to be negative, it takes balls to go against the flow and find the positives! You should try it sometime, it makes life a whole lot more enjoyable.

I could say the exact opposite…so easy to be positive…

Being positive does make life more enjoyable, I wholeheartedly agree.

I do however have to ask, is it worth being delusional to “see” the positives?

I would say it’s better to be realistic and pragmatic, than sticking your head in the sand like an ostrich.

As the saying goes “A pessimist is a well-informed optimist”

Mark Twain wrote:
“…the man who isn’t a pessimist is a damned fool”

So I’ll chose to be a realistic pessimist because the ANC and the rule of law (or rather lack thereof) is not very conducive to positive growth.

….hm…no mention of the thousands of small businesses struggling with excessive red tap, excessive rents and a population tightening its belt…and then that topic of crime

I read when the economy becomes expensive to survive in…..its struggling

The eternal entrepreneurial spin, clueless about the real risks.

Heard of something called survival bias? What are the odds of new business success/failure?

Why not get a Lotto winner on and get his view on the economy and 7 points on how real Lotto winners are made?

@casi_negro I agree, it’s all too true!

It’s ironic how a lot of the people that give this “eternal entrepreneurial spin” have never started their own businesses or risked their own capital.

I will concede, should someone take the risk in the current environment and make a success of it, respect, you’re better person than I am.
But people that comment from the sidelines, practice what you preach please and maybe we’ll follow you, or not, depending on how it plays out.

My belief is start the day positive and do the best with the hand that you are dealt. If you start the day negative you will go into depression.
If life inst good here go try somewhere else and realize the great life we still have here. I just pray that Ramaphosa get going soon . Ace and co must go. Then watch the economy boom.
I have lived in other countries and SA during Apartheid and now Politicians are corrupt but we will vote them in again. It doesn’t matter if they are black, white or any other colour.

I suspect geography also plays a big role. Compare the mood of a large car dealer in Pietersburg with a food processor in Paarl.

one thing though, pessimists are never disappointed 🙂

Mind over matter? The use of willpower to overcome physical problems?

Sic, “For example, Edgars may be struggling to survive, but that doesn’t mean that nobody can make any money by selling clothing in South Africa. In fact, it may signal exactly the opposite. Edgars’s problems are likely to be an opportunity for someone else.”

Why someone else? Show us how it is done…

@barnard

I agree with you, if it’s so easy and you just need willpower please show us how it is done.

If someone has a business model that circumvents the ANC and their policies and governance, great for that person / business.

I can’t help, but notice that entrepreneurs with existing businesses are considering leaving, so why would someone look to start a new business if the ones that are already in the market are considering leaving?

Surely that is saying something, not? I, for one, don’t have a business plan that can operate unaffected by the ANC government, so I won’t be starting or risking anything in SA unless the current path that is projected into the future changes.

Patrick – you are absolutely correct – there are lots & lots of opportunities in SA to make R1000 or R2000 p/m by starting a small business!!!
Just think of all the chicken feet being sold on the side of the road!!

@woogoodly

Is starting a small business in SA really worth R1000 or R2000 p/m? I,, for one, can’t justify the risk for a return like that. I would argue you’re better off doing odd contract jobs or anything else really.

Please let me know how the chicken feet business goes as I would love to see the numbers.
Just a thought, what happens with your stock at night? Do you look it up in a underground vault?

Pessimists don’t make money…..they immigrate.

Realists leave and become optimists somewhere else where they are allowed to be!

A pessimist in SA is an optimist with 25 years experience.

emigrate = leaving
immigrate = arriving

Easy way to remember

emigrate = exit
immigrate = incoming

“I see no problems – only challenges!” (With acknowledgement to one H. Nelson).
LOL.

or in the words of Scroobius Pip “You see a mousetrap; I see free cheese and a f****** challenge!”

It”s true. Pessimists don’t make money., but optimists lose all their money. The secret I guess is somewhere in between.

Yeah, yeah yeah.

Martin Niemoller was an optimist once, then he wrote this:

“First they came for the socialists, and I did not speak out—because I was not a socialist.

Then they came for the trade unionists, and I did not speak out— because I was not a trade unionist.

Then they came for the Jews, and I did not speak out—because I was not a Jew.

Then they came for me—and there was no one left to speak for me.”

Just edit to reflect the reality in SA today.

I am always puzzled by this quote. It was penned after World War 2, in Germany, in the destruction. It deals with guilt and lack of any action taken by German intellectuals and the clergy to stop the Nazis. The odd bit for me is the “first they came for the communists (original version, later socialists) and the trade unionists.”.

Why is it odd? Well, the Nazis WERE socialists and trade unionists. Hence the abbreviation “Na-Zi” = National Socialists. The Nazis grew out of the NSDAP = National Socialist German Labour Party….Doesn’t make sense, unless it’s a revised translation.

@Milo Compton

Yes, I agree, the name does confuse matters, but it’s not so much the name as it was what they stood for, because they were anti-communism.

“The party was created to draw workers away from communism and into völkisch nationalism.”

So I believe the “first they came for the communists” is very accurate. Hope that helps.

Political orientation is almost circular, the far right Nazis in many ways were indistinguishable from the far left communists. Both preferred violence and both espoused totalitarianism. The only real difference is that the Nazi saw the nation as supreme, while the communists took an international view, the ultimate goal being a communist world. Our very own EFF another perfect example of this apparent contradiction. Supposedly far left but with a lot borrowed from fascism, uniforms, violent rhetoric etc etc

Yes, the majority of this country are poor because they have a bad attitude. What an absolute load of rubbish.

A business opportunity, or entrepreneurship, is nothing but a continuous process of problem-solving. When consumers experience certain problems, and if the legal environment allows it, the entrepreneur will find a solution to that problem. Therefore, in order to create a business opportunity, we need a combination of problems or challenges and the protection of property rights. Without a legal framework that protects property rights, the business concept and the intellectual property of the entrepreneur will be nationalized by the state.

This brings us to the current situation in South Africa. We have an abundance of problems. This creates many opportunities for entrepreneurs. At the same time, however, we have a political system that does not protect property rights. So, the problems will remain problems, new problems will emerge, the consumers will suffer, while the entrepreneurs will emigrate to jurisdictions where their ideas and solutions are protected by the state.

The South African legal framework enables zamma-zammas or illegal activity because the law itself is corrupt.

We said and explained.

We are farmers, a hard profession in this country.

I think of those living happily in town, never a threat to just take their homes, but everyday we hear JM and Andile sounding off. My nearest nieghbour is 8 km away, the police (ha ha) 20km away close compared to the deep Karroo.

This is what we do, it is what we love doing providing food for the nation so we look up, encourage our staff even when it is tough.

We are positive remind our selves everyday to be positive, some one else is worse off than I am.

@pwgg

I have friends that are farmers and I plead with them that they at least have a backup plan, should things gets worse.

Prepare for the worst, but hope for the best.

I could not agree more, farming in this country is very difficult. Have you considered moving to another country to farm there? There are a number of countries in the world that support farmers with various forms of support and subsidies that make it less difficult to survive while you look to provide food for the country/globe.

I would say that a risk analysis is never a waste of time especially if you pair it with a executable plan should the risk become too great.

I have respect for SA farmers, that have to compete against their global peers (the latter who receive state subsidies in various forms). In SA, farmers produce without much state subsidies, and operate in an environment facing hostility from govt….e.g. even the previous Min of Agriculture’s focus was more on the plight/welfare of the farm-worker, than to support the farming community.

Iced coffee thanks for that. Yes we do have a back up plan, we are now moving as much as we can off shore. No more development, if things look better we will bring it back and put it into the farms. No we are not interested in moving, very different farming elsewhere, climate, labor, start up costs, farming has huge school fees etc, besides we are at fault being sentimental about our operation. The 4th generation is now 25 weeks old due in December……its a boy too. I wont see him farming but his father is one hell of a farmer.

@pwgg

I’m really happy to hear you have backup plans in place. My train of thought is similar, gets as much as I can offshore and should the environment change I’ll be quick to come back to commit myself to making this the best country possible.

My friends that farm are considering, should things require them to move, that they will look to go work for someone on a farm in either America or Australia. Make a living, send the kids to good schools and save as much as they can so that should things turn around in SA they can come back and farm here again, or the future generation can return home to their land of birth.

All the best in your planning and endeavours!

“The farmer has to be an optimist or he wouldn’t be a farmer” – Will Rogers

On a religious note:

“And on the 8th day God looked down on his planned paradise and said, “I need a caretaker!”. So, God made a farmer!”

quite obvious that there is a standard deviation around the average. Some will be above average, some below. The issue is that for the majority is that the average is trending downwards. On a personal level, you can still do well (or badly) anywhere as an outlier.

Check out The Black Swan by Nassim Nicholas Taleb.

it’s a great book!

what a great pleasure to read something that is not doom and gloom, and which is also not pie in the sky. we need to be awake sure, BUT my goodness this country definitely still has so many opportunities I agree. lets work on ourselves to change our mindsets, our attitudes and however awful much of the news that sells is, turn away from the majority of it and put our heads down and foster a winners outlook. Embrace our fellow people, share, talk, call out when dishonesty is seen – we have SOO much going for this country – dont allow the few to spoil it for all

@kate 1

The irony that you should mention pie in the sky…

The fact of the matter is one has to be pragmatic and a realist. This means one has to address and look at the facts and the reality of what is playing out and what has been happening these last 10 years.

Almost every single important factor that could affect the quality of life for society in South Africa is going down and the ANC is showing zero willpower that they want to fix this country and change the course of the projected future.

In saying this, I can’t help but think of the laws of physics, which are seen as fundamental laws of nature which tells me that a greater force than the current one needs to be exerted to change the linear direction to that of the opposite direction.
Or at the very least you need some kind of force, even if it is a small one to bring about some change in speed or direction, but sadly I am having a difficult time seeing any noticeable force from the ANC that is sending us in an upward or positive direction as a country.

PSG share dropped 17% since January. just shows they can not get it right investing in optimists

Sorry Patrick, what utter drivel. By any objective standard, SA is in a vertical free fall. Those of us who care for our future are making a plan, does that makes us pessimists? Of course it does! But it makes me an optimist elsewhere. I’m sure my professional skills, ample capital and very strong international expertise will be appreciated there and taxed modestly. Oh and I probably wont be killed in my bed. SA is dead. Period

@Pamplona

Well said sir! This article is utter drivel with sprinkles of cherry picking.

This is what can be said about Communism:

“It can be stifling to entrepreneurial spirit, which is key to a country’s economic growth and development. The U.S., a capitalistic nation, has greatly benefited from that small business and entrepreneurial atmosphere, a backdrop for the American dream.”

This looks like something the ANC copied into their manifest and the direction in which SA is heading…some of these are already happening as we speak.

“More specifically, in Communism:

– The government owns all the businesses and properties (the means of production).

– There is no freedom of speech.

– Large or geographically-broad populations tend to be diverse, making it difficult to maintain a common goal or set of rules for shared effort and resources.

– Central planning is difficult to achieve.

– Consumers‘ needs are not taken into consideration.

– Productivity and efficiency are difficult to achieve without profit motive for the workers.

– It is difficult to achieve internal balances between supply and demand without a price mechanism.”

one thing is for sure….these people definitely can not plan.

Okay I get it that we need to be positive and based on the blog’s it seems that most MW bloggers are positive as they invest their most precious resource their own time (and life) in building businesses as well as just working and living in SA (and paying taxes). If we were not positive nothing would happen.

However you are not being negative when you are realistic and in doing so talking about structural problems that you encounter daily in SA. If you do not things will not change for the better. See reference to Martin Niemoller.

Try running a business in the Construction Sector at the moment and all the ugly warts will reveal themselves, that is red tape, corruption, construction mafia amongst other problems. If other sectors or regions think that they can happily make money and these problems will not become a problem for them they are mistaken.

Optimism vs pessimism interesting topics.

Some would argue, pessimism is merely a self-defence mechanism to steer clear of possible misfortune.

Would you call a wildlife Park Ranger a “pessimist”, simply because he carries a rifle to protect himself (and his walking safari guests) against wild animal attack? Or does the Park Ranger considers himself an “optimist” and leads his guided tour without a rifle for protection…because he’s optimistic an attack won’t likely happen?

The difference between pessimism and reality (or a realist) is a fine line. Is pessimism a sub-category of common-sense?

Take the Jewish community in WW2 Germany in the 1930’s, after the Nazi-party came into power, which made anti-semitism threats: all the negative-minded/pessimistic Jews decided to flee to neighboring countries, and the USA….while the positive-minded/optimistic Jews, thinking the worst will never happen, ended up in Auschwitz.

There’s a lesson here…and many Saffas have the same complacent mindset.

@MichaelfromKlerksdorp

I have to commend you with hitting the nail on the head with your examples, I couldn’t have said it better.

People should read your example / reference to WW2 very carefully, because I get that exact same feeling from some South Africans. Some people are too positive and believe things can’t get worse, or “that will never happen”, just like those that ignored the threats in Germany back then.

The scary thing is you don’t even have to point to the BLF or EFF to hear bad future predictions for minorities in South Africa.

Cyril himself has said white people must be dealt with like boiling a frog alive. Ernst Roets wrote an opinion piece a few years ago asking Cyril why he would do this as Ernst says “I took note of a comment attributed to you in the memoirs of Dr Mario Oriani-Ambrosini”

Arguably another minority group that was targeted were foreigners just recently.

“We are going to bring this to an end and those that are operating illegally, wherever they come from, must now know” – Cyril

“A warning shot fired by number one” – reporter

Youtube Video: Clampdown on foreigners
Published on Mar 14, 2019 by eNCA

And then we are as surprised that he is surprised and looks half asleep when he addresses the nation about the xenophobia (that’s putting it mildly) attacks. How did he think the people that listen and vote for him and the ANC was going to interpret what he said? Did he think citizens will reason they should not support the unlicensed foreign businesses and report them to the authorities? Well clearly they interpreted the “we are going to bring this to an end” in the most literal way possible, by ending their lives.

My heart bleeds for this country and it’s people who are caught up in the games of corrupt politicians who have no good intentions for the people that voted them into power.

What about those that cannot emigrate? Should they also sit around and sulk/be pessimistic? I think everybody could do with a bit of encouragement or optimism in SA. The reality is we are in a mess, but moaning is not going to change the situation. Change things one person at a time. We can do better. Shoulder to the wheel. Not saying overlook the c**p going on, but don’t let it get you down. Have a great day everyone!

GT Ferreira cut his business teeth in apartheid South Africa, selling chickens in townships. He learned adaptability at a time when it was dangerous to be a white man in the townships. Today he is a billionaire.
South Africa functioned then (poorly for most), it is functioning now (poorly for some) and will continue functioning (hopefully better for all) in the future.
In the early 1900s it was horrific for Afrikaners (at the hand of the English), in the mid 1900s, horrible for Ngunis (at the hands of Afrikaners) and currently feels awful for everyone (at the hands of the Ngunies). Yet the Ruperts, Kunenes, Steyns and Motsepes have emerged from all of this horrific adversity.
The ones who persist and succeed, are the ones that become adaptable and open to opportunities.
Pessimism is passive armchair intelligence, optimism is continuous active stupidity. Both have their place. Experience, resilience, and adaptability come from active stupidity (note – not ignorance) and not armchair intelligence.
GTs of today, stand a better chance of having wealth in the future and the armchair intellectuals will likely be commenting on fora like these in the future still.

@Khul_d

I don’t even want to go into this, but your made up definitions of pessimism and optimism, the less said the better.

Am I understanding this correctly? You’re saying experience, resilience and adaptability is equated to stupidity?
Active stupidity, what is that, stupidity in motion, what even?
So my take away from that statement is you’re saying by being actively stupid you gain experience, resilience and adaptability? Wow, I guess that’s one way of looking at it. Must admit my brain doesn’t compute the same result.

So GT learned adaptability by being actively stupid???

Your history has some huge gaps which you fail (or chose not) to mention.
Let’s just look at two people (families) that you make mention of.

Ruperts:

The Rembrandt Group was founded in 1948.
The National Party imposed apartheid in 1948.

I’m not even going to go into detail to explain how the political environment might have been beneficial to the business, you can go read up on that.

Motsepes:

The same can be said about the Motsepes, the political environment might just have been somewhat beneficial to the business.

“In 1994, he became the first black partner in the law firm Bowman Gilfillan—the same year that Nelson Mandela was elected as the country’s first black president.”

Interesting that you don’t mention Cyril Ramaphosa when you mention Motsepe since their are brothers-in-law and they both made large sums of money out of the mining sector. Just saying.

Do you see how the years (1948 & 1994) align, funny how that happens hey?

Before you possibly try, don’t try to imply that I’m accusing anyone mentioned above of anything cause I’m not, I’m just stating facts and how funny it is that you say “Yet the Ruperts, Kunenes, Steyns and Motsepes have emerged from all of this horrific adversity.” It looks like the complete opposite to me, at least for some of the ones mentioned.

So the facts cause me to look at your mention of “horrific adversity” with great scepticism.

As stated in an earlier comment of mine on another article:
“I will concede, should someone take the risk in the current environment and make a success of it, respect, you’re better person than I am.”

So yes, I would be one of the first people to congratulate someone that manages to create a successful business in the current political and economic environment.

The one thing we can agree upon is:

“The ones who persist and succeed, are the ones that become adaptable and open to opportunities.”

oh dear Khul_d.. Dude you need to read up on some stats. I recommend Nassim Taleb Incerto.

The making of a few billionaires is not a sign of anything real.. you might rather look at Lotto winners for reflection haah In a large sample a few will by chance stand out. And you will not hear of the other thousands that went bankrupt.

And the system is so cooked now that once made, the winners take all since they can skew markets in their favor to improve their odds.

Still one can take apart businesses, there are certainly some with better chances than others. Professionally services perhaps, those require a certain background knowledge and removes many other participants.

The stats show by far the most $ millionaires in SA are from the Fin industry. So sadly making something big in other sectors is clearly much harder.

Hi all

I disagree with this pseudo state sponsored article. Having dealt with young people for many years, I see that they feel the future is bleak for them in SA (especially minority youth). Starting business is all good but how is that going to happen when the business incubators themselves are prejudiced?

Lets not fool ourselves, SA is going down the Zim and Venezuela routes. Slower than those two since more capital is in SA, but the same route none the less.

Lets hope this comment does not get censored. Truth hurts I guess.

After being shot at during a hijacking in Durban some 20 years ago the owners of Condev Construction became negative and emigrated to the Gold Coast of Australia where they have become extremely successful and are so positive about Australia and their future.

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