Crisis

[steveinbsas]

Tell your friend to stop lamenting and figure a better business model; one that is sustainable and get going!

To rickulivi: Hardly any small business is sustainable in the face of high inflation and taxation, neither of which were mentioned in your post. When prices rise faster than incomes people simply stop spending money on anything but the basics and they obviously cut back on those as well...as much as they possibly can. That results in the failure of many small business, most notably those with retail storefronts.

I don't have exact figures, but I believe that about as many retail stores in the nearby city of Punta Alta have closed in the past six moths as the past six years. The ones that have the best chance to survive are the ones that are in the front of the owner's homes (quite common in smaller communities).

Someone once posted that they believed that businesses raising their prices was the cause of inflation, but rising prices are the effect of inflation, not the cause.

To Sergio: Tell your friend to start a revolution (peaceful of course) to advocate that the government reduce it's dominance over the economy (i. e. reduce spending and taxation and don't borrow money from the IMF to spend more!) before the new "model" for Argentina becomes Venezuela.

 

[lamarque]

Please elaborate!

Please don't ask him to elaborate, you already know what he is going to say. Macri, dictadura, nazis laws, kristina was great, blablabla.

 

[lamarque]

To rickulivi: Hardly any small business is sustainable in the face of high inflation and taxation, neither of which were mentioned in your post. When prices rise faster than incomes people simply stop spending money on anything but the basics and they obviously cut back on those as well...as much as they possibly can. That results in the failure of many small business, most notably those with retail storefronts.

I don't have exact figures, but I believe that about as many retail stores in the nearby city of Punta Alta have closed in the past six moths as the past six years. The ones that have the best chance to survive are the ones that are in the front of the owner's homes (quite common in smaller communities).

Someone once posted that they believed that businesses raising their prices was the cause of inflation, but rising prices are the effect of inflation, not the cause.

To Sergio: Tell your friend to start a revolution (peaceful of course) to advocate that the government reduce it's dominance over the economy (i. e. reduce spending and taxation and don't borrow money from the IMF to spend more!) before the new "model" for Argentina becomes Venezuela.

Just a little detail, small business are not victims neither in this country, they all rise price as soon as they can when people is consuming and they rarely try to defend the consumer interest, to the point that their business model was not to sell more at a better price but to sell less with higher prices, now that finally people have to put more attention on saving and spending where the price is best, is no wonder that many of this shops will be the most affected. You have as well internet sales in part to blame about the steady drop on small business sales.

 

[toongeorges]

Paywall

Not if you look through Google news. (I searched for "Argentina", the link appeared on the 3rd or 4th search page). Here is the Google link: https://www.google.com/url?sa=t&sou...CpAggmKAAwAw&usg=AOvVaw2u42FnRaA8VVh-xi4MTCoX

This link may have a paywall on this forum, but clicking it from Google's website directed me through.

This is the title of the article: "Argentina’s economic turmoil leaves small businesses reeling"

I am not going to copy paste the article for copyright reasons.

I can give a summary though: several business owners are interviewed and because of the high interest rates, they choose not to do business instead of lending money, because lending the money costs too much and puts them to losses, even if they have a healthy business. Banks are more difficult in lending money. The chief executive of Flybondi is relieved he raised $ 75 million instead of the $ 20 million he needed, before the interest rate went up, but most small and medium enterprises in Argentina cannot do such thing, instead they are often paid with post dated cheques by 90 days, against which companies borrowed to resolve their cash problems, but they cannot borrow anymore because the 55 - 60 percent interest the banks ask are prohibitively expensive ...

 

[Bajo_cero2]

Please elaborate!

]

Same nightmare team, same decisions, the FNi is back, what can fail?

 

[UK Man]

Yes La Anonima have been selling their overinflated priced Kit Kats at 50% off for over a week now so things must be tough for retailers.

 

[sergio]

Sergio, sorry, but you can't have a successful business if your sales decline 55%. It would seem to me that a drop in sales of that magnitude is more indicative of a shitty business model.
Perhaps you should clarify that he HAD a successful business, and things changed, and business went to hell. That's happens in the US too. Only a few years ago Hewlett Packard paid like $8 billion dollars for an English company, only to write it all off in a year (HP lost the entire $8 billion in that deal, in one year!). That was a really shitty business too. Want to know more? Talk to the guys from Sears, K-Mart, Radio Shack, Toys R Us, and so on. They all had successful business and then Amazon showed up and they realized that they really had shitty businesses. Argentina does not have a monopoly on dropping sales. Did you ever hear about how many people lost their homes in America as a result of the 2008 crisis? You would think Tesla has a successful business, and yet in their 15 years in operations they never made a profit. What kind of business is that?
If you are going to be in business, be prepared. Shit happens all the time, and not just to your friend. Yet, some business people always seem to manage to continue to run successful businesses. Apple, the most valuable company on Earth today, was a few days from going bankrupt at some point. Gates and Microsoft, their archenemy, bailed them out with a loan. Want more? Read about Space X, and although their success today is unbelievable, they were also like a few days away of total bankruptcy. Their rockets were crashing instead of going up, and yet they persisted.

Tell your friend to stop lamenting and figure a better business model; one that is sustainable and get going!

It would seem to me that you don't know what you are talking about. The business I was referring to is not bankrupt and will not go bankrupt because it provides an essential service - and a very efficient one. The reality is that since the current crisis began people are not spending. They themselves have less business than before, hence less to spend on services, or they are afraid to spend. The friend I mentioned has been in business for more than two decades and he has always done well - even during the 2001 crisis - but the current decline has impacted him more than ever. It has nothing to do with a business model and everything to do with the seriousness of the current economic situation. I'm sure other businesses are feeling the effects and will start to close. I know that when I took clothes to be altered a couple of months ago the seamstress commented on how much work she has to do because people are not buying new clothes as much as they used to. They're making do with what they have and having them altered. During the 2001 crisis business after business closed. Even in Recoleta there was a place for trading things because people had so little cash. Apparently this has started to return. We're not talking about former giants like Sears, K-Mart etc.

 

[Macanudo]

I saw this (written in Spanish) hanging on the wall at a copy service store today. According to at least one source on the Internet Einstein may not have written this.

The crisis according to Albert Einstein.

Let’s not pretend that things will change if we keep doing the same things. A crisis can be a real blessing to any person, to any nation. For all crises bring progress.

Creativity is born from anguish, just like the day is born form the dark night. It’s in crisis that inventiveness is born, as well as discoveries made and big strategies. He who overcomes crisis, overcomes himself, without getting overcome. He who blames his failure to a crisis neglects his own talent and is more interested in problems than in solutions. Incompetence is the true crisis. The greatest inconvenience of people and nations is the laziness with which they attempt to find the solutions to their problems.

There’s no challenge without a crisis. Without challenges, life becomes a routine, a slow agony.

There’s no merit without crisis. It’s in the crisis where we can show the very best in us. Without a crisis, any wind becomes a tender touch. To speak about a crisis is to promote it. Not to speak about it is to exalt conformism. Let us work hard instead. Let us stop, once and for all, the menacing crisis that represents the tragedy of not being willing to overcome it.



-Albert Einstein.

 

[jbeas176]

small busiess models need to be flexible. what wotked for the last 20 years may not adapt to changing demand. service businesses, depending on type, will suffer more as economies fluxuate. i could also say the US economy although fluent now, is headed for turbulent times because of past policies of past presidents. 23,000,000,000 in debt is real. give macri a chance to correct what was handed to him. there are no easy answers in argentina or los estatos unidos. personal opinion, its world wide.

 

[perry]

It would seem to me that you don't know what you are talking about. The business I was referring to is not bankrupt and will not go bankrupt because it provides an essential service - and a very efficient one. The reality is that since the current crisis began people are not spending. They themselves have less business than before, hence less to spend on services, or they are afraid to spend. The friend I mentioned has been in business for more than two decades and he has always done well - even during the 2001 crisis - but the current decline has impacted him more than ever. It has nothing to do with a business model and everything to do with the seriousness of the current economic situation. I'm sure other businesses are feeling the effects and will start to close. I know that when I took clothes to be altered a couple of months ago the seamstress commented on how much work she has to do because people are not buying new clothes as much as they used to. They're making do with what they have and having them altered. During the 2001 crisis business after business closed. Even in Recoleta there was a place for trading things because people had so little cash. Apparently this has started to return. We're not talking about former giants like Sears, K-Mart etc.

Your post makes a lot of sense Sergio as I do not know one small business that is doing well atm . Its a terrible crisis that is worse for many than 2001 as the costs to run a business and taxes are much much higher now than then and consumption is way down . To be informed and inform others is a public service as the economy show no progress . I am looking forward to leaving Argentina as I do not want to be here in a huge crisis its going to be very ugly and it can be difficult to leave once things get very bad . Venezuela is a case in point once the jewel of South America in the 1970s with the highest standard of living today its hell on earth where people earn at most 20 dollars a month and are denied all services and medicines . In life anything is possible and one must always have a backup plan