Rental Alone, Can Sink A Business

I read in yesterday's Straits Times's WORLD section headlined 'Rent Sinks HK Bakery' about one famous egg tarts and pastries stall in Hong Kong throwing in the towel and closing their operations for good by the end of this month. The reason? The shop lot's landlord increased the rental by a whopping 110%! This means the bakery have to allocate SGD$16,800.00 per month from their take-ins just to continue their operations! To me, a 110% increment is equivalent to daylight robbery! The landlord might as well hand over the land title-deed to the bakery. Although I never try the egg tarts in the famous store and do not know how tasty the pastries are, it's obvious they must be good! Or how else do you explain the survival of a simple pastries' store for half a decade? I see their closure as a country's loss of a breed of vintage local brands synonymous with the history and growth of HK's prosperity.

I personally do not understand the mind mechanisms of these so-call landlords, especially for this case. If the shop lot is located in the prime belt and businesses are highly dependable on the traffic volume the location provides, I understand the need to increase the rental within a REASONABLE range. But for this case, I can only say the landlord is in a classic lose-lose situation. Not only is he losing for good a stable income, he may not find another shop to fill in the space, not with that rocket-high rental fees packaged along. Not that anyone should care for this stupid landlord anyway.

Some of my friends will know I am taking baby steps in entreprenuship since the start of this year, pawing my way through the business world like a country bumpkin's virgin trip to a neon-lit city with naive hopes to stike gold someday. Like all other start-ups, I hope to find a place to call my working space and for practical reasons like putting the address on my namecards and to receive correspondences. As I scoured through the list of office spaces for rental in some certain areas I considered suitable, there is none I can afford! Not in my current pauper position.

A cramped space for two with zero facilities in an old building sets me back by $500 per month at least, not taking into account your other various overheads expenditure. What really gets into me is I can also foresee landlords who will always try to increase your rental once your contract expires. In such cases whereby the company deems the rental unaffordable, they are forced to move their operations elsewhere, get slapped with the hassles of movement and the cost of changing their contact details. Or in the case of the HK bakery, wave the white flag.

Though I am eager for my own space, I am determine not to fall into this rental black hole as I've yet to see real moolah. I really wish there are more affordable, readily available spaces for start-ups like mine. I do not see how some old buildings especially those with perpetually vacant lots cannot be flexible and work out a short-term rental clause for ambitious people like me but with empty pockets for the time being...

Drop me a note if you are one such flexible landlord and see the potential in me.

Post Note: Came home and was informed by Mr. Gecko our house landlord raised our rental by another $200 today... what a day...