Episode 85 Transcript

Okay welcome to episode 85 of the Business in Morocco Podcast today we're going to be
discussing the business environment in Morocco and around the world
and how we as entrepreneurs respond to
the situations around
us we are six months in now to a state of emergency in morocco and dealing with Covid 19 and its impact on society
and we're going to be talking today about how the environment has
shifted and how we can respond to that so
Ryan good to see you man why don't you
share a little update how are you doing good i'm really happy with the
interviews that we've done the last few weeks uh you did a great
one with Sofiya, we've had some really
entrepreneurs on the podcast who've
done a lot of the talking for us you
know we
actually haven't had to produce much
content recently because
we have all of these great Moroccan
sharing their stories and giving us wise
insights into what they're doing you
know the the challenges they've overcome
and the the great initiatives
that they're they're pursuing uh
currently in Morocco and around the
so i've been really happy with the the
quality of the guests that we've had and
we'll have some more of those interviews
coming up uh in the weeks and months
so yeah definitely the thank you so much
to all our guests for sharing so much
value with our audience
and for our audience that uh share it on
Linkedin and other platforms
thank you and also if you've got someone
you know
in the business world in Morocco that
you think would be inspiring
and educational tag us in their posts or
pass on their message to us we really
appreciate those
those people that help us be aware of
other things that are going on so keep
that coming
yeah i mean just for for any new
listeners who
are either watching on youtube or
listening on a podcast
platform we have some amazing guests who
who are experts in
artificial intelligence we have we had a
college student in spain who's trying to
clean up the oceans and reduce
plastic waste uh you interviewed sofia
you know was a freelancer who went from
like unemployed to
to making money on one of these uh
uh fiverr platforms right the uh the
freelance platforms
uh we have people who are building
products here in morocco and shipping
them around the world like very high-end
so there's a wide variety of guests and
and uh
for me from my point of view it's all
very interesting so go and check out
our channel on youtube or the other
episodes that we've got
on uh on these various platforms like
itunes and spotify
and google podcasts uh but from my point
of view
um hey we're we're here in casablanca
uh we we are still a state of emergency
that started in march and it has been
extended through
october 10th i think there's been seven
so far uh school was supposed to start
uh september 7th here in casablanca and
that was
delayed two weeks and then i was delayed
in another two weeks so
so all in-person instruction here in
is not allowed from the very young kids
at the crush level
all the way through university level
schools now that's just casablanca there
are other cities in morocco where
where these things are happening but
they're in various levels of
remote work and in-person work
and there's ongoing testing there's a
variety of things
that that are happening that we don't
really need to get into regarding if you
know what happens if a student gets a
positive test or something like that but
um we in here in casalanca are not
allowed to leave
we're not allowed to leave a city you
have to get special permission
um the beaches are closed
the a lot of the parks are closed
but public transport is operating the
tramway the buses
restaurants and cafes are open most
type of retail establishment these
places are open the hotels have opened
public schools i mean public pools are
still closed
but if you get a room at a hotel then
you can use their pool
so we actually did that we specifically
rented a hotel room just to go swimming
in the pool um and we were able to
negotiate a good rate
so if you're looking for a place to swim
then maybe just go talk to the manager
of a hotel and
maybe you can pay to swim in there pool
that's clever
that's good but yeah we're uh we're
looking for things for our kids to do
because they can't
go to school and so we're figuring out
you know how are we going to teach them
and how we're going to make sure that
they stay on track with their education
so we're doing a mix of things in terms
online education and tutors
and there are some workshops and things
that are allowed to be open like the
solstice or so they are allowed to
be open and they are offering things uh
but that's that's really uh
for us a big deal if
the schools are closed it really limits
the things that we can do as a family
especially my wife what she can do with
her free time
and for me i was going to teach
at uh assist university
here in casablanca teach some business
but it it doesn't look like they will
have in-person classes
this year so that's a big change i was
planning on doing that
and now i'll have to think about doing
something else
but what about you what's going on
what's going on in canada
yeah so i'm still i'm still here in
canada um
about halfway through the plan uh to be
here for
for six months my kids are in school
uh they started a later than usual but
they are going they're wearing masks in
the classroom and there's a few other
but thankfully alhamdulillah schools
are open which is good they're enjoying
that i've been working on my real estate
business here
so we shared an update together in july
and i shared that i was hoping to to
grow that
i was able to to purchase another home
which is exciting so i close on that in
a couple weeks i get possession of it
and the whole thing needs to be
renovated the basement is completely
empty there's nothing down there and i'm
going to put in a two-bedroom apartment
and then the upstairs completely new
kitchen and bathroom and some other
so it's a huge project going to be
hiring a contractor to take care of all
and then working on some other things
and um
yeah it's it's it's interesting talking
to one of my
tenants i was visiting the other day and
she was talking about the upstairs
people and just saying you know i hear
them you know they have big dogs and i
hear them
sometimes they have arguments between
them and i'm you know i hope there's no
you know i hope the place is in good
shape up there i don't think they keep
it all that nice
she kind of said you know that's why i
could never do what you do like i just
i couldn't imagine you know having
somebody else
wreck my house and it brings up this
idea of risk versus reward so when you
rent out apartments when you do real
estate in that way
there's a risk because somebody could
break stuff they could
you know leave in the middle of the
night without paying rent and that's
that's a risk that you take but there's
a very
high potential reward and so her
perspective was
i can't face that amount of risk it's
dangerous or troublesome and my
perspective is that's
it's the cost of doing business every
now and then you're gonna get somebody
who doesn't take care of it and you got
to do some extra renovations
but if you're still coming out ahead in
the long run if you're being well
paid to overcome those challenges then
it's worth it but it's similar to what's
going on in morocco with
the different business options with the
current environment
there's risks involved in opening
certain businesses or
operating certain businesses but there's
the potential
positive or upside and potential rewards
that come with it
can you tell the audience a little bit
about your
your decision-making process
why did you choose this property
did you actually end up having a partner
and what are your what are your
expectations uh for this property
in the future i mean this podcast is
going to be about business conditions
market conditions and uncertainty
now of course everyone you know people
are always going to need housing
but maybe you could shed light on on how
did you decide on this property
and and what was your thought process
okay so
like you just said you made a really
good point people are always going to
need housing
and so when you're thinking about
business uh whether it's to open up a
new product
line or whether it's to enter a new
industry or open a new shop
thinking through nowadays about what is
essential and what's non-essential
has become much more prominent and we've
talked about this before that
it's really a blessing to be somebody
who works in an essential
industry who produces something or
offers some service that
is necessary to society no matter what's
going on in the outside world
whether it's a pandemic or a war you
know people still need to eat
people still need to live somewhere they
still need to
figure out how to educate their children
you know these are
very important activities in society and
housing is one of them and the
the house that i bought is a nice single
family home
and so it's kind of like a starter home
it's not
a huge mansion that only the very rich
could afford
and it's also not just a tiny little
place that
you know only one single person could
live in it's something that's very
common for a family
and it has a lot of options so it's
something that's
necessary and you could say it's very
liquid it's a liquid investment
single-family homes are easy to buy and
they're easy to sell because there's
always a demand
for it now a lot of people are wondering
what's going to happen to
the prices one of the big concerns when
you're investing in business or in real
estate is
the rising and falling of of the
purchase prices
but for me i'm looking at it from a
long-term perspective
i'm not flipping homes i'm not just
buying it
renovating a little bit and then selling
it for a higher price i'm keeping them
for the long term
you know we're talking like 10 20 30
time horizons and so yeah
if the market does crash if prices do
in the next six months people say maybe
q1 q2 of 2021 we could see a price
it doesn't really matter that much as
long as
rents are somewhat stable and when you
look at past
uh like the gfc the global financial
crisis in 2008
we had a real estate crash in the big
cities in canada in 1990
during those times rents stay pretty
so these are all factors that that weigh
my decision to to continue moving
forward in this industry despite
the current situation we've got with
um this place in particular yeah there's
just different factors i'm in a city
is diversified it's it's seen a lot of
good price growth there's new
transportation options
lots of immigration so rising or
increasing population
it's close to public transit
easy to hop on the bus close to a busy
street but not on a busy street
you know some of these factors went into
that decision
very interesting yeah um you know we
focus on the individual elements of
business and entrepreneurship
uh that we can control right the the
quality of products and services your
your research customer service sales
hiring and all those things
but the focus of this podcast will be on
on what the business environment is
uh for doing business and and i do want
to i want to come back to
the business environment in canada
but talk a little bit now about the
environment in morocco as you mentioned
there is this new term uh all over the
and it's here in morocco is things that
are essential and non-essential
essential being
you know what were the businesses that
were allowed to operate during this
pandemic and what businesses were closed
if you were closed you you do meet that
definition of non-essential
and the question going forward is
if you're an entrepreneur or you're an
employee looking to work in an industry
do you want to start something in a
non-essential industry
or in an essential industry
and that still remains a question it is
a question it's not uh
it's not certain which one you want to
choose because
the essential industries are are going
to be very competitive and the margins
are going to be squeezed and it's going
to go
down because everyone's going to get
into to those industries because they're
going to appear to be safe
so you know there may be and lower
right they'll be stable returns you can
have confidence that you will be allowed
to continue to operate
even if there is another pandemic or or
another state of emergency
but there will be opportunities and risk
in going into
non-essential industries you know
essentially anything
that involves large groups of people
i think we can say safely around the
world if your business
involves large groups of people in the
same place
at the same time you
are vulnerable to
being shut down whether that's a
sporting event
or a conference center
anything involving the arts you know a
symphony a play
a movie theater
large events with large gatherings of
people festivals
it's it's very risky to get into those
kinds of businesses right now
right um and
unfortunately you know things
vary across the world in terms of what
politics can do
and what governance can do and and
and how much restrictions there are in
them but here in morocco state of
essentially means that that
they can do whatever they want at any
time so this is as a business owner
you need to understand the power of the
government to impact
your business your business's ability to
operate i'll give you an example
almost the entire summer public
education and private schools were
under the impression that they would be
able to open on september 7th
and open in terms of having in-person
and literally on sunday night
of september 6th at about 11 p.m
the government announced no you cannot
so they got about seven hours of notice
and they're basically so you can't you
can't open
and and the reason i bring up this
example is
if you are a person in the education
or you're in the entertainment sector or
the educational sector
or or anything involving in-person
you need to understand that there is a
tremendous risk of being shut down at
any time
for any reason which is uncertainty and
so what i want to talk about
is is the impact of uncertainty
on entrepreneurship and business if
from my point of view i don't want to
build a business invest time and money
and resources and hire people
in a business that can be shut down so i
have my office here and i'm sitting here
by myself why because the entire
business model of the office
has changed since kovalev yeah i had
expected to be holding courses
and classes the entrepreneur ship club
of casablanca
i was going to rent out individual
spaces i was going to have
large conferences with guest speakers to
come in and teach people about sales and
marketing and
we you and i talked about this talked
about leadership
habits you know bringing in people uh
like miriam who we had on the podcast to
to teach
uh executive level people about business
yeah but that business model is is too
risky now
yeah and so for the entrepreneurs that
are listening right now
it's very important to understand
your business model and how vulnerable
it is
to the current situation we find
ourselves in
right um just like we were talking about
individuals you you're vulnerable if you
have one source of income
if you're an employee and you have an
employer and that's your only source of
you know we talked about the analogy of
your like a table with only one leg
you know very wobbly very unstable
whereas as you diversify
if you have some side hustles or you
have some some
cash generating assets then if you were
to lose your job
you have a bit longer of a runway to
replace that income
you're more diversified you're more
protected you have multiple sources of
in a similar way a business itself can
multiple streams multiple sources of
revenue multiple product lines
and that can protect the downside even
if one is
the the most lucrative and that's what
they're hoping they can continue to bank
if there is a change in in a tax
or currency fluctuations you think about
a business
you know i'm sitting here in a country
where a lot of businesses rely heavily
on the us
as their primary customers but there's
huge disruptions to supply chains and
restrictions on
on travel and even moving of goods
across the borders so
if a business has customers from across
the globe
then those kinds of restrictions or
potential trade wars
or currency issues don't affect them as
they're more diversified and so they're
more protected
so you mentioned a university teaching
in-person classes
you know a university could put a lot of
money into their location
you know spending a lot of money to be
somewhere close to the tramway
a lot downtown a beautiful building that
attracts a lot of attention
and ignore the online
education option and then something like
covet happens and now they need to pivot
now they need to shift whereas a school
that had both operating you know they
had a location they had in-person
classes they were capitalizing on
people who could see the physical
building but then we're also
tapping into students who weren't
traveling to that location where taking
courses online
they would be better prepared for a
situation like we find ourselves in now
yeah absolutely and
you know one of the things to think
uh moving forward is is not just the
the short term trends
regarding you know the lockdown and
confinement and the virus and and these
but even even the trends that have just
been initiated
through this um this pandemic but then
will become their own wave they will
become their own trend going forward
uh aside from the pandemic and you know
we've talked about this before
e-commerce is one of them
it's it's not new it's we're not
geniuses to say that e-commerce is going
to be continue to grow
not only morocco but around the world it
already has done a lot of growth here
here in morocco but i also think that
that remote work
is here to stay i think it may be a
little bit overblown but i do think that
it's going to continue for several
reasons one there is a certain
percentage of people
that like it
two it reduce costs
for companies and historically
companies were worried about not being
able to control their employees or know
what they're doing
they were worried about them like
wasting time or not getting the full
benefit from their employees but i think
what this last six months has shown
is that people don't necessarily need to
be micromanaged i mean
twitter announced that the employees
never have to come back to the office
facebook has also facebook has also told
that to a lot of their employees
and and what they realize is that there
are new metrics for work
so i say well how does this impact you
know entrepreneurship and business here
in morocco
well i think if you're thinking about
servicing a new sector
you could think about starting a
business that specifically services
employees working from home um
what are they missing okay well maybe
they need an extended monitor
they need uh headphones they need um
uh they need help with installing
zoom and you know understanding how the
software works and to be able to install
like unique backgrounds and stuff like
basically what if you were to start a
business that
that took someone and created a home
yeah i'm thinking of you know i can
hear uh kids screaming outside behind me
uh lighting is another one you know
some people they they're only able to
carve out a very small
space in their home uh to devote to
to their online work but you could
be somebody who comes in and offers that
the lighting the soundproofing
all the the computer up the selling good
chairs you know the right background all
of those things
you can definitely do do very well yeah
i think most people
especially if they work for big
companies their home life is not
set up to work there i mean
they're used to getting up monday
through friday going into the office
going to their
you know their office and working there
like you said whether it's the desk
and the chair and the and the computer
and maybe they don't even have a printer
at home or things like this
scanning documents uh doing all these
various kinds of things
this is the type of thing that you have
to think about as an entrepreneur is
is what are the new things that are
starting in in the economy
and and how can i take advantage of of
the new trend
and you also have to think you know is
the business
that i'm in is it on the decline right
is is is it facing
a lot of resistance you know as of right
a restaurant in a cafe 50 capacity
you know anything about the industry you
cannot make any money you can't even
break even if you're only allowed 50
capacity you know most restaurants they
they break even because they pack the
full you know friday saturday sunday
right and if they're not able to do that
those three days of the week
it's a losing effort right so you've got
to ask yourself
are am i is this industry on the ascent
or is it on the decline
yeah speaking of restaurants obviously
in the in the same way we're discussing
education and the schools that are
offering online programs are better
prepared than those that aren't
same thing with restaurants those that
had a like a robust
delivery system and a menu that was
available and customers that were used
to ordering they've done much better
but think about all the restaurants that
really they bank on
their location you know all the places
along the
the corniche some of those places with
beautiful views of the ocean
you know they're paying a premium to be
located there because people want to
with those ocean views but now they're
limited in
being able to open or open at limited
and so that's that's a challenge that's
an industry where
all of a sudden the risk has has really
up and so those restaurants need to try
to pivot whether it's renegotiating
their rent with the
lease that they've got or whether it's
shrinking down
the space or creating multiple levels so
that people aren't as crowded together
or trying to develop that that online or
home delivery
menu options they've got to be adjusting
because this could be going on for a
yeah and i think in general not just
from from a business point of view but
from an individual personal point of
view cities are changing um
and so you have to be careful
about things that you do
based on the past in the city you know
like like you
specifically looked at your area like
okay it's growing
it's a it's it's a sort of a suburban
area tangential to the city there are
new services in the area the population
is growing
and it's a single-family home that if
you know if the rental situation doesn't
work out like
i can sell it right it's pretty liquid
so you have a lot of flexibility
in in what you're doing and the location
that you've chosen and the type of
property that you've chosen
right when you take a city like
casablanca what i have seen in the last
few months is that the city is
changing now we know here in casablanca
there is a new apartment building
going up every single day right there's
a new one being built there's cranes all
over the city
apartments are a dime a dozen if you're
listening this podcast and you're living
in morocco and you're thinking about
buying a property in casablanca i would
say just
take it easy do a lot of research
be patient because
whereas in the past a company like
society general or bank populaire
or uh orange or some of these big
companies that are located here in
casablanca they were requiring you to
come into an office
well i think a lot of the jobs
of the future they're not going to
require you to come into the office
maybe you don't actually need to live in
the city
to work there so i think that that is
changing i've already seen
among friends and acquaintances here in
the city that have left
because their companies told them you
don't have to live here anymore
your job is now a remote job and it's
it's amazing to think about it because
right over here
next to my office is casablanca finance
city where they're building these giant
of office space right and and i asked
who's going to work there and and and do
those companies still believe
that the people who were going to be in
those offices need to be in those
yeah so these are the questions that
that we as individuals
and his companies need to ask ourselves
is it a great time to invest in
commercial real estate
probably not right probably time to wait
and see
so you're looking towards these
long-term trends
and right now there's all this
uncertainty there's all this
risk in the air but one year
two years three years from now we'll
look back and there'll be people who
moves people who took action during this
that will look like geniuses will say oh
you know i should have done that too i
should have
got into that industry i should have
started that business i should have
bought property or i should have
purchased this asset i should have
bought this stock
there'll be people who look like
they'll earn huge rewards they'll be
very well positioned
coming into the next phase of life and
but right now in the moment they're
calculated risks and so
i think just to look ahead look towards
the future and consider
what are the potential downsides
and what are the possible upsides and if
the possible
upsides are so promising and the
potential downsides are
are quite small then it can be
worth taking a risk and hoping you earn
that big reward
so to circle back to the example i gave
with a tenant
she looked at the potential uh downsides
she looked at the possibility that i was
going to have damage done to the
property or that i was going to
have to evict a tenant or deal with
you know property renovations because it
was poorly treated
she looked as bad as too daunting and
not worth it
but she was missing the possible upsides
and in my view there it far outweighs it
you know it's worth taking that small
amount of risk
so for our entrepreneurial listeners out
we're not saying don't do anything we're
not saying like
sit on your hands and just wait and see
what happens because these are the
moments that can make or break
your your career and your your business
is these
these huge upheavals where big companies
go out of business and new startups all
of a sudden become crucial
like the one we're using right now zoom
you know you just look at
the the prominence of this small
software company and how it's become
a global essential service that they
the others will be well positioned and
so this could be
your moment to take a big leap and go
out on a limb
but look like a genius a few years from
absolutely you're you're exactly right
and and there are people out there who
basically say when
when everyone is panicking like i'm
and when everyone is enthusiastic i'm
selling right
specifically talking about stocks but
there are
there are going to be over-reactions
to this crisis to the state of emergency
and if you can spot
the overreaction then you can get
things at a good value and
you know one of the things that i'm
doing is i'm i'm uh
investigating importing products
start by selling online but then
building towards
uh having a retail location am i going
to start by having a retail location
no i'm not going to start by having a
retail location because i think that
commercial real estate has to you know
cheaper and because people right now are
still afraid
of doing things face to face so
i completely agree with you there are
opportunities there always will be
um you have to see the trends and
another trend that i will
mention is electric vehicles
they're already starting here in casa
you've done
some videos on your other channel rock
treasure regarding scooters
yeah and it is definitely becoming a
here in the city i think people want to
get rid of those uh
motors that spew all that uh pollution
into the air
and make a lot of noise and you know you
gotta do maintenance and they break down
you gotta buy gas and why not just have
a scooter that
is quiet and you just plug into the wall
and and you can go 25 kilometers on it
every charge yeah yeah that's true
i've noticed that here in canada there's
electric cars are far more prominent
it's not just
you know expensive models like like
tesla there's some cheaper
options available as well and so i think
that's going to become
an increasing trend is more
care about the environment potentially
but also just people recognizing hey
this is
this is cheaper in the long run and it's
efficient and quiet
and there's a lot of upside to it
good all right any final thoughts
i just want to give one update to
something i talked about in july which
uh trying to establish my authority in
the real estate space
in in canada in order to attract
investment capital to to continue
growing my business here
and i shared a bit of my plan to contact
other influencers and influence them in
order to
sort of establish some credibility with
those interviews
and so it's a scary thing um you're
starting small
uh writing people emails and and
pitching this this interview but
i've got my first uh one coming up in a
couple weeks
and so once you get that first yes it
can progress
into other yeses so you've got to get
rejected people that don't respond
people that say no thanks not interested
but then as soon as you get a couple of
them under your belt
people can get more confidence in you
and it increases your likelihood of
getting a yes and once you have somebody
who's more influential that says yes
there's a greater likelihood of somebody
else saying yes
and so being willing to persevere and go
through some rejections
and also being willing to start small
be patient as you build on that those
are principles that can be applied even
for people that are looking for their
dream job you know facing those
rejections applying
continuing to contact managers go to
interviews you're going to face some
rejection you push through it until you
finally get a yes
even if it's not your dream job you
start at the bottom you start small
and another employer would be far more
likely to hire you when you have
experience and positive references so
these principles can be applied in other
areas as well

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