What’s the average lifespan of a small business in Hamra?

I know I know..I need to get out of Hamra more often..but that’s a discussion for another day..

Anyway, back to my point..

It seems as if every time I’m walking home..or to the gym, grocery store, or one of Hamra’s many restaurants/pubs..I see yet another store/restaurant that has been closed down and emptied out, or is in the process of liquidation.

Shopping in Hamra

This used to be a athletic apparel/sports store..located a couple of stores up from Lina's Cafe on Hamra Main Street. I took this picture earlier this week..

Seeing this once, twice, ten times made me think about:

  1. The average lifespan of a small business in Hamra (I’d say 6 months)
  2. Why business owners choose to sell identical merchandise (as if the market isn’t saturated enough), and
  3. Why they would even be so foolish as to set up shop in one of the most expensive (rental wise) areas of the country, especially when they aren’t selling products with high profit margins or fast moving consumer goods.

I don’t know..it’s just not adding up!  Any theories?  What do you think the average lifespan of a small business in Hamra is?  And why?

10 Comments

Filed under life in Lebanon

10 responses to “What’s the average lifespan of a small business in Hamra?

  1. here’s my 2 cents.
    I believe it’s lack of vision. People see other businesses succeeding and think it’s an easy task. Throw some money, open a store/restaurant/whatever and money will start flowing in while you sit back and check the bank account.

    Add to that the malls phenomena where walk in traffic is high. Most people now prefer shopping at a mall. Any shop that opens has to work 10 times harder to get customers than a shop located in a mall.

  2. Youssef Chaker

    The funny thing is that there is a butcher shop in my building that hasn’t had any meat or cows in the fridge or any customers for many years! Yet the guy comes in every morning, opens up shop, stays a full day, then leaves at night. Does it every day (half day on sunday). How? I don’t know! I have theories, but I’ll keep those for later😛

    People in Lebanon don’t have anything better to do. They open up some store, try their luck, go bankrupt, someone else takes over, and the cycle continues. These people don’t have any opportunities or even a chance to succeed…

    • Now that’s just sad! But I can see what you’re talking about. I’m always a bit confused when I walk into these small mom and pop stores.only to see that there are about 5 people working there..doing nothing with themselves..all day, everyday! How is this way of life, this vicious circle, in any way sustainable? It’s NOT!!

      I guess there are just some things about Lebanon that I’ll never understand..but I’m trying!

      And P.S., If you’re “theories” are anything like mine..they don’t paint a pretty picture!

      • Youssef Chaker

        I bet my theories are worse that yours. You’ve seen the cell phone stores, haven’t you? There’s about 1 or 2 on every block. There’s usually someone in there, most times he’s outside watching the action on the street. Nothing to do. Always with a full stock of accessories for cell phones. Why? How? Maybe I’ll tell you when I see you😉

  3. Samer B.

    It’s quite simple. I’ve seen failure over and over and over. I even did it once myself.
    In order to start a business, you need to write a business plan. For those who don’t know, it’s simply a process which will help you think about all business aspects, including costs, marketing , sales, legal issues…
    I think more than 90% of Lebanese small businesses have no clue about business planning, that’s why they fail!

    • But..how do they get the funding (loans from the bank) to open up these business without a business plan? And if they have enough liquidity to be able to open up their own business..surely they had to get that money some how..wouldn’t that mean that they had to be at least a BIT business savvy.. I mean, right? Maybe not..

      • Samer B.

        I agree, bank loans require a business plan and a decent study, but there are a lot of funding sources other than banks. Some sources could include:

        1- Family and close friends: This is quite a common source of funding, even in USA, and it’s much easier to obtain than bank loans. Lebanese immigrants send over $6Billion USD per year to their relatives Lebanon, so this could be a common source of funding.
        2- The rise of real estate price: The price has dramatically risen during the last few years, and people have made a lot of money selling their lands. A land which used to cost $100K a few years ago, could be now easily sold at $500K or more.
        Having a BIT of business sense in an area like Hamra doesn’t really work. You’ll need to have a LOT of business sense if you are to succeed. It’s quite an expensive area, and if you’re not strong enough, you can’t continue. This model could work in less expensive areas, such as Jounieh or Jbeil.
        What I’m trying to say is that when you have a lot of monthly costs, you don’t have the privilege to experiment, you need to get it right from the first time.

  4. Simon

    There’s a Lebanese saying that goes something like this:
    “You know the guy is Lebanese, when if the first does something, he follows and does the same…” (it’s hard to translate it from arabic…)

    Basically if a Leb saw his neighbour open a store and is doing well, then he’ll open his own, just opposite to the his neighbour’s. And by doing so, ruins his and his neighbour’s business. Same goes for pubs, clubs, restaurants, etc…

    It’s like Samer said, pple dive in without business plans just coz they saw someone succeeded at doing it.

  5. Hamra is in a changing phase now, all the tenants used to pay according to an old rent law, meaning nothing or a 2000 dollar for a year, now big companies and investments pay them to close a lot of money to be able to take their place, guess the butcher is waiting for his day of luck, cause if he stops coming, he will not get any money when someone else takes over…
    it is a big complicated situation, i also mentioned once on my blog here http://snapshotscenes.blogspot.com/2010/10/shop-nothing.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s