Tough Times Ahead for Small Business in Hervey Bay
There are worrying signs beginning to appear that the tourist boom that has burst on Hervey Bay over the last 12 months has not been a blessing to all small businesses in Hervey Bay.
Some are very obviously beginning to struggle as rents increase but business remains at the same level. Since Christmas a well-known computer store in Main Street Pialba has closed, a dress store in Torquay Terrace Pialba is closing down, there are several empty shops down at the Boat Harbour and the Gossip knows of several others that are teetering on the edge of closing.
While those in public office might wax lyrical about how well Hervey Bay is doing there are others more closely associated with some of the small businesses in town who can see things in a much different light.
January 28th, 2007 at 10:28 am
The last 12 months have been bad for small business in HB for sure…a regular (private) survey by our company in December indicated that indicator businesses (restaurants, car yards, services) were down approx 20-30% on the year prior.
Over 48% of all businesses in the 4655 area now claim to earn less than $48,000 per year…which is nowhere near what even the smallest business needs to earn to survive!
January 28th, 2007 at 11:32 am
Hi CW - Thanks very much for your input - seeing some figures certainly puts the anecdotal evidence in some perspective.
I wonder when the investors who are coming into town and buying up commercial premises will wake up and realise that Hervey Bay is not the boom town they all seem to think it is.
We recently saw one commercial premises, about a block off Boat Harbour Drive, going for $3300 a month plus outgoings. Any business that took that building on would have to sell a lot of product just to pay the rent each month.
January 29th, 2007 at 4:57 pm
Hi CW,
Just starting to look into buying an investment property in Pialba for long term growth. Everything was looking good until I read your blog. Is there anything else I should know about future growth and expansion of your beautiful area.
January 29th, 2007 at 5:15 pm
G’day Jeremy
Let me say right from the start that I don’t know CW from a bar of soap and it’s pretty easy to post any old figures on something like the Hervey Bay Gossip but lately I’ve been talking to a few local business people and they are struggling.
Since CW posted those figures I’ve spoken to another local small business person who in turn services a lot of other small businesses. He thought that CW’s figures were quite credible too.
Even some businesses that you might think should be booming are not doing as well as you might think even though they are well-managed.
January 29th, 2007 at 5:21 pm
Hi Jeremy
All is not doom and gloom for the smart operator…this year is already shaping up to be a big one (my company has already made budget for January and February after a very ordinary 2006) but you can’t afford to just rush in and assume everything will be OK.
There are particular forces dictating what should and shouldn’t be invested in, especially in Pialba (where I’m based) and as long as you are making informed decisions, you’ll do fine.
Rents are skyrocketing to outer Brisbane prices in new buildings, but that also means that there are bargains to be had if you ignore the developer’s hype.
Just remember that a boom town is only a boom town whilst new investors still believe it. After that it’s just a town.
If you ask Stuart nicely, he may pass on my email address to you and I’llk be happy to go into it in more depth for you (and send you all my historical financial stats for the city, development, rents etc etc) which may help you.
(I’m not a developer, real estate agent or anyone else who has an interest in selling property here, so you’ll only get straight answers from me I’m afraid :-))
January 29th, 2007 at 5:51 pm
Just to add to the last post…all my figures are derived from statistics we compile each year (it’s what I do for a living, amongst other things) which we compare to anecdotal evidence, and then against the ABS, Dept of Fair Trading and other figures.
These figures include income, employment, education, industry, housing, development, rentals and many others.
They’re real!
January 31st, 2007 at 9:12 pm
Good evening C.W,
From the research I’ve done so far two trends seemed to have emerged. 1. The Hervey Bay area is growing at a rate higher than the rest of Qld. A good thing for a potential investor. 2. The average wage is lower than most of the rest of the state due to a higher proportion of retiree’s. Not good as this tends to mean rent levels are lower therefore returns are not as good.
However having said that there is the expansion of the industrial estate near the airport which could attract more small business to town and in turn change the balance to include more families as business owners.
Your thoughs would be interesting.
Thanks Jeremy
February 10th, 2007 at 7:05 am
40% of Hervey Bay residents report less than $300 per week income, 48% (that’s right, 48%) of all HB businesses CLAIM to earn less than $50,000 per year.
HB also has one of thehighest unemployment rates in the state.
I have been involved with the airport industrial park which caters to larger businesses, and there is is still several years of building etc to go before it will be complete.
There is also a heavy push to attract technology-based businesses here and an ongoing commitment from Council to bring more diverse industries here, so the future business development of the city is certainly bright.
This will take about 7 years though. The bay is - at the moment - full of half-assed businesses (sorry but it’s true…people who have no idea about commerce paying too much for bad businesses and not knowing how to run them effectively) who will gradually close as more knowledgable business operators arrive, and this process of rebuilding the business community will take about that long.
All up…still a very good investment area, but you need to be prepared to sit on it for 3-7 years to get the very best returns. Don’t try to flip houses until at least mid-2008.
Commercial always follows residential, and that applies here also.
Hope this helps a little…you could do far worse than HB, just be realistic about it.