One of the reasons I chose to go into disaster restoration was that the business was essentially actuarial in nature. If you walk into any insurance company's office, they can tell you, with some precision, how many claims they'll be paying out in the next year. There are always disasters happening to people's homes.
Granted, the slow economy has hurt us in ways that may not be obvious. For instance, if you have unemployed friends and relatives with construction skills, you might choose to have them restore your home, instead of a professional restoration company, like mine.
Still, overall, some percentage of people will need help. I figured no matter what, there'd probably always be some business for me to do.
Trouble is, the business doesn't come in a nice, steady stream. Sometimes we're so busy we are literally having difficulty keeping up. If you walk into our office that day with an impressive resume, we might literally hire you on the spot.
Other times, things are dead slow. We have been that way for the past 3 weeks. Dead slow, as in plans to cut everybody's hours were closerthanthis to being implemented and the next step was to lay off as much as 1/3 of my workforce.
Still, I held on because I knew, eventually, we'd be busy again. There's just no way to know when.
We've grown quickly in my company. That has presented its own set of problems. We've had to borrow money to buy equipment so our capacity was able to meet customer demand. We have never really had an excess of cash in the business. We have had to spend a lot of money to train and equip everybody. In the past year, alone, I've bought 3 vehicles for the company. (Last year, we had 6. One of them basically died. Now, we have 8.)
So, when slow times come, there's not some huge cushion of cash we can draw on. Small business is its own universe. One of the ways it is unique is that in most cases, the owner is the only financial "backstop" there is. Once I run out of money, the business runs out of money. We then become insolvent and perhaps bankrupt.
During my first year of business, I sold over $10,000 worth of musical instruments and recording equipment because of a business slowdown. Fortunately for me, that was able to tide me over for two months until things could pick up a little bit.
These days, with as many people as I employ, and as much overhead as we carry, it would be nothing for me to burn through six-figures in just a couple of months. Suffice to say, that's an amount of money that can ruin most people, and in this case, I'm no different than "most people".
I enjoy being in business for myself, but it is always obvious that my financial well-being is in-play. Every day the doors are open, I take a risk. To me, it's not just a risk to me, but also to my family. A lot of people get hurt if this thing craters, and some of them I'll be seeing regularly for the rest of my life.
That's one reason why I cringe when politicians make attacks against high wage-earners. Many of these so-called "wealthy" are small business owners just like me.
It's important to note that my total compensation as a small business owner should really be considered two separate components. I get paid for my labor: basically the things I do to run this place. I also get paid for my investment: I need an economic rate of return in order to keep my money in the business.
Without that economic rate of return, I have no incentive to risk my money. I'd either sell the business, or sell off the assets and sit on my money collecting a risk-free rate of return. Every day I leave my money in my business, basically my entire net worth is tied up in a single, undiversified investment.
Granted, the "undiversified investment" is a business that I, personally, run, but I'm not going to put so much of my net-worth into an endeavor if there isn't a good prospect of an economic return on my money.
I am very happy being a capitalist. It has benefitted me, personally, but it has also benefitted the dozen people who I employ. It benefits our community and our country with the taxes we pay. Our customers benefit from quality services.
So, it pains me to no end to hear the efforts of entrepreneurs described in terms of "greed" and the need to punish us with increase taxes. Accept it or not, I don't see that I'm doing anything wrong. To the contrary, I believe I'm doing a whole lot of good.
In any event, the past 3 weeks were the worst we've had in about a year and a half, near as I can figure. The tide appears to have turned, though. This is our slow time of year. Things are touch and go until about December, sometimes as early as November. That's when the real cold weather comes and all heck breaks loose.
We jumped the track and it will take 3 solid months for us to finish the year at over a million dollars. Still, worst-case and we'll have increased sales by about 10% this year. In an economy like this when so many others are struggling, that's not half bad. It's not out of the question to hit a million... we'd just have to have some serious good fortune for the rest of the year.
We never did have to lay anybody off these past few weeks. I paid a lot of folks to do some tasks that came dangerously close to busy-work, but never even so much as asked an employee to clock out early. We've never laid anybody off since I opened the doors. That is a streak I hope I can maintain.
Times like these, it pays to stay positive. It's already the middle of September, and this year's busy season is right around the corner.
Showing posts with label small business. Show all posts
Showing posts with label small business. Show all posts
Friday, September 11, 2009
Thursday, September 10, 2009
How to Choose a Franchise
With the economy in this condition, people are losing jobs. When folks lose jobs, some percent of them will opt to strike out on their own and start their own business, rather than looking for a job.
Some percentage of those people are going to be drawn to the allure of a franchise. So, I'm going to try and outline a few general principles for people who are considering going down this path. To me, being a franchisee has been a phenomenal experience. I am thankful every day that I was fortunate enough to find my franchise system. I think the support I get from them is great. I think the business model they provide is outstanding. It has improved my life in every conceivable way.
However, that's not the case for everybody. Franchisees go out of business every day. In fact, a few recent studies have indicated that franchise-startups fail at about the same proportion as independent (non-franchise) business start-ups.
If you're like I was, you'll probably take every penny you've ever earned and invest it in your new business. The thought of rebuilding from zero in my 40s wasn't particularly appealing to me. So, I wanted to stack the odds in my favor.
I did this by researching franchises. They're not all good. A rough thumbnail, in my opinion, is that if you took a list of all your available franchises, 95% of them will lead to your bankruptcy. Now, in that list will be a lot of new, smaller, unproven systems. Still, this is just to impress upon you that just because you're buying into a franchise system doesn't mean you won't go broke.
The first step in researching is to find out what your available capital to invest is. How much actual cash (non-borrowed) can you put your hands on. Most franchises have what they call a "liquidity requirement" meaning they won't sell you a franchise if you don't have, say, $100,000 in cash. Different systems require different liquidity and I'm aware of a few that require a seven-figure liquidity number before you can talk to them.
Take this liquidity number seriously. If you ask me, most liquidity numbers are understated. Meaning, if they say you need $100,000, the actual number is probably closer to $150,000. They're literally telling you the DEAD MINIMUM cash you should have on hand before considering what they have to offer. A good franchise system will know what they're talking about on this.
The liquidity requirement will cut down your options substantially. You won't be able to buy into, say, Volvo Rents if you only have $50,000 to invest.
Start with a list of all available franchises and then whittle it down to the ones you qualify for, financially.
Lists are available in a lot of places. The one that was my favorite was the listing on Entrepreneur.com.
After that, look for other qualifications. Many of the better food-service concepts do not want you if you don't have previous multi-unit food service management experience. Others prohibit absentee owners. Don't fudge your qualifications. If you can't do the thing full-time, look for concepts that allow absentee owners. Again, a quality franchise system has good reasons for their requirements.
Now comes the real legwork. Every franchise system in the US is required to have a Uniform Franchise Offerring Circular. Some will require an application fee to see their UFOC. Some will not let you see it until you fill out a detailed application.
However, in some cases, you can get around this by searching for the UFOC on the Caleasi site:
http://134.186.208.228/caleasi/pub/exsearch.htm
Review this document and have some good questions ready.
Next, pick up a telephone and call people who are currently in the system. My advice: don't wait until you're deep in the process to do this. Just do it. There is no law or rule against it. Some folks won't want to talk to you. Some folks will chat your ear off. Just be honest: tell them you're considering investing your life savings into their franchise system and you want to know their experiences as an owner.
Not everybody will be sympathetic enough to cooperate, but some will. Listen to them. They will tell you the good in their system, but they'll tell you the bad, too. I was warned off of many, many bad systems and market segments by owners who took the time to give me the real scoop.
I cannot emphasize enough how these interviews will inform your decision. If you take a UFOC to an attorney, they'll tell you that the franchise agreement is completely biased in favor of the franchisor and you'd be foolish to sign it. From an attorney's perspective, they're right.
From a business perspective, though, they may not be. However, an owner will be more than happy to tell you when they feel their franchise system is screwing them over.
Sometimes, I was able to get hold of somebody who USED to be part of a franchise system, but got out. Not all of them were negative towards their old franchisor, but many were. Mostly, they were very honest and objective because they truly had no reason to flower things up at all.
If you can get somebody to agree to let you visit their facility, that's worth a lot. I would even advise volunterring to WORK for the franchisor for a day or a week or whatever, to get a feel for what life is really like in the franchise system.
Once you've conducted your research, you can submit your application, application fee, and schedule your visits to the franchisor. At that point, you should already have a good idea what you're getting yourself into.
A final note regarding franchises: some folks consider this the minor-leagues of small business. Whereas, more conventional entrepreneurs are the big leagues. I think that's not particularly true. Many franchise concepts allow you to grow into a business with sales of $10 million, and in many cases even more. Franchising is not better than, or worse than other more entrepreneurial business concepts. It's just an option that's available to you.
Best of luck if you chose to go this route, but chose carefully. It has the potential to be either the best or worst decision you've ever made.
Some percentage of those people are going to be drawn to the allure of a franchise. So, I'm going to try and outline a few general principles for people who are considering going down this path. To me, being a franchisee has been a phenomenal experience. I am thankful every day that I was fortunate enough to find my franchise system. I think the support I get from them is great. I think the business model they provide is outstanding. It has improved my life in every conceivable way.
However, that's not the case for everybody. Franchisees go out of business every day. In fact, a few recent studies have indicated that franchise-startups fail at about the same proportion as independent (non-franchise) business start-ups.
If you're like I was, you'll probably take every penny you've ever earned and invest it in your new business. The thought of rebuilding from zero in my 40s wasn't particularly appealing to me. So, I wanted to stack the odds in my favor.
I did this by researching franchises. They're not all good. A rough thumbnail, in my opinion, is that if you took a list of all your available franchises, 95% of them will lead to your bankruptcy. Now, in that list will be a lot of new, smaller, unproven systems. Still, this is just to impress upon you that just because you're buying into a franchise system doesn't mean you won't go broke.
The first step in researching is to find out what your available capital to invest is. How much actual cash (non-borrowed) can you put your hands on. Most franchises have what they call a "liquidity requirement" meaning they won't sell you a franchise if you don't have, say, $100,000 in cash. Different systems require different liquidity and I'm aware of a few that require a seven-figure liquidity number before you can talk to them.
Take this liquidity number seriously. If you ask me, most liquidity numbers are understated. Meaning, if they say you need $100,000, the actual number is probably closer to $150,000. They're literally telling you the DEAD MINIMUM cash you should have on hand before considering what they have to offer. A good franchise system will know what they're talking about on this.
The liquidity requirement will cut down your options substantially. You won't be able to buy into, say, Volvo Rents if you only have $50,000 to invest.
Start with a list of all available franchises and then whittle it down to the ones you qualify for, financially.
Lists are available in a lot of places. The one that was my favorite was the listing on Entrepreneur.com.
After that, look for other qualifications. Many of the better food-service concepts do not want you if you don't have previous multi-unit food service management experience. Others prohibit absentee owners. Don't fudge your qualifications. If you can't do the thing full-time, look for concepts that allow absentee owners. Again, a quality franchise system has good reasons for their requirements.
Now comes the real legwork. Every franchise system in the US is required to have a Uniform Franchise Offerring Circular. Some will require an application fee to see their UFOC. Some will not let you see it until you fill out a detailed application.
However, in some cases, you can get around this by searching for the UFOC on the Caleasi site:
http://134.186.208.228/caleasi/pub/exsearch.htm
Review this document and have some good questions ready.
Next, pick up a telephone and call people who are currently in the system. My advice: don't wait until you're deep in the process to do this. Just do it. There is no law or rule against it. Some folks won't want to talk to you. Some folks will chat your ear off. Just be honest: tell them you're considering investing your life savings into their franchise system and you want to know their experiences as an owner.
Not everybody will be sympathetic enough to cooperate, but some will. Listen to them. They will tell you the good in their system, but they'll tell you the bad, too. I was warned off of many, many bad systems and market segments by owners who took the time to give me the real scoop.
I cannot emphasize enough how these interviews will inform your decision. If you take a UFOC to an attorney, they'll tell you that the franchise agreement is completely biased in favor of the franchisor and you'd be foolish to sign it. From an attorney's perspective, they're right.
From a business perspective, though, they may not be. However, an owner will be more than happy to tell you when they feel their franchise system is screwing them over.
Sometimes, I was able to get hold of somebody who USED to be part of a franchise system, but got out. Not all of them were negative towards their old franchisor, but many were. Mostly, they were very honest and objective because they truly had no reason to flower things up at all.
If you can get somebody to agree to let you visit their facility, that's worth a lot. I would even advise volunterring to WORK for the franchisor for a day or a week or whatever, to get a feel for what life is really like in the franchise system.
Once you've conducted your research, you can submit your application, application fee, and schedule your visits to the franchisor. At that point, you should already have a good idea what you're getting yourself into.
A final note regarding franchises: some folks consider this the minor-leagues of small business. Whereas, more conventional entrepreneurs are the big leagues. I think that's not particularly true. Many franchise concepts allow you to grow into a business with sales of $10 million, and in many cases even more. Franchising is not better than, or worse than other more entrepreneurial business concepts. It's just an option that's available to you.
Best of luck if you chose to go this route, but chose carefully. It has the potential to be either the best or worst decision you've ever made.
Comments on Obama's Health Care Speech...
One of the really nice things about being in the radical middle is that I am allowed to try and embrace the best of ideas from both the left and the right. My inclinations are somewhat to the conservative side of the fence, but frankly, the conservatives can be ass-stupid sometimes. I just find that in a few more instances, the liberals can be ass-stupider.
That sort of goes along with the territory, as the definition of conservatism generally means "conserving" an existing order and liberalism generally involves tinkering with the formula. The liberals have the harder job: trying to make improvements on systems that have been proven throughout the entire course of human history.
As some who know me already know, I support Obama's government health care reform. In fact, I support some of the more radical options including a government-option. My preferrence would be a Medicare for all provision that allowed every American the ability to enroll in the same health insurance program that our seniors do.
I have some personal perspective on this. I didn't have health insurance for a few years during my 20s. Fortunately, I was young and healthy, but I also had to pay for things like an ambulance ride to the ER when a little kid cut my wrist open with an ice-skate. I also remember removing my stitches with a swiss army knife because I couldn't afford a doctor visit to have a physician do it.
Also, as a small business owner, I simply cannot afford to provide health-insurance to my employees the way we currently fund health care in this country. I know that a government overhaul that included adding health benefits would be expensive to me. However, my hope is that it would be possible, which it isn't right now.
We are paying 2 to 3 times more, per patient, on health care in this country than any other industrialized country. I know that providing health insurance to every American will be expensive, but it makes sense that the following areas are areas for improvement:
1. Trial lawyers are not improving the health of americans. Threat of litigation drives insurers and physicians to perform unnecessary tests and procedures and adds to the cost of health care. Trial lawyers would argue that without the ability to sue, doctors would not perform good medicine. However, if this were true, we'd have the best medicine the world had to offer. We don't. In many cases, our health outcomes are actually WORSE than those of other industrialized nations.
2. We pay 2 to 3 times more per patient on health care in the US than any other industrialized country. The medical industry is remarkably non-standardized. There are centers of excellence that produce superior health outcomes at lower costs. The Mayo Clinic is one such center. We need to do a better job of proliferating best-practices through the health care industry.
3. The pharmaceutical companies are thieves and are stealing from you just because you're American. They want to destroy the American economy and to prove it, they're charging you about twice what most other industrialized countries pay for pharmaceuticals. They're charging you 20 or 30 or 40 times what they charge in the developing world? Why? Because we'll pay it.
All we have to do is say we won't pay it, just like everybody else in the world has done, and they'll stop. Trouble is, their lobbyists are constantly trying to protect their right to steal from Americans. So far, they're doing a great job. Any meaningful reform of American health care would include constraints on pharmaceutical costs. I'm not advocating that we pay any less than any other industrialized country. I just don't think that paying 50% or 100% or 150% more should be allowed.
There are other ways we could control costs: for instance, insisting that we can import pharmaceuticals from any other country in a fee-trade zone. That way, we could import drugs from Mexico and save 80% or so. They've already retaliated by threatening not to sell pharmaceuticals to any country that exports them to the United States. We should counter-threaten to deny the US market, entirely, to any pharmaceutical company that violates free-trade agreements and takes punative action against free-trade partners. Personally, I wish our legislators would use threats like this as a club to get big pharma to stop trying to destroy the United States.
If I had my way, I'd take every major executive from every major pharmaceutical company one-on-one into a locked room for 30 minutes and show them the error of their ways. These are America-hating, profiteering organizations who are trying to bankrupt us. Just us. Not Canada. Not Japan. Not Great Brittain. Not Germany or France. Just the United States of America.
4. Although aggregate costs will rise moderately, individual health policy cost should, in theory, go down. Why? Because we've got a terrible free-rider problem in America. Employers (like me) who don't offer health insurance benefit if spouses of our workers have health insurance. ANOTHER COMPANY is subsidizing the health-care of some of my employees.
Why, you might ask, don't I insure my employees and right this wrong? One of the main reasons is that I can't afford to subsidize the health-care of SOME OTHER COMPANY'S employees.
Also, as we all know, uninsured people will sometimes delay care until they have to be taken to a hospital where they receive the most expensive health-care we can offer: the emergency room. With regular access to a physician, we may be able to avoid some of these $1,000 ER visits by providing a few $80 periodic checkups.
Overall, I'm not naive. I know this will cost money. However, we're already insuring our nation's most expensive patients: the elderly and the poor.
When my business was very new, I had a person who worked in my office who made $8 or $9 an hour. She supported 2 kids and a worthless sperm-donor baby daddy. They had better health-care at lower copays and deductibles, than my family did under the plan I was paying for, myself.
So, the idea that "government health care" is worse than what we're getting through private insurance is laughable, in my opinion.
One problem occurred to me as Obama said these words about detractors of Ted Kennedy, a long-time supporter of a government health-care plan: "In their mind, his passion for universal health care was nothing more than a passion for big government."
Trouble is, it isn't like that. The problem with Kennedy is that people perceive that his passion for big government was simply manifesting itself at the moment in a passion for universal health care.
I believe health care is a necessary and important government service. However, the left's willingness to tax everybody to death and try to provide a wasteful government solution to every problem has left people wary.
On this, I will only say: let's not shoot the messenger in this case. Not every government program is bad. Yes, if the left weren't so willing to tax every possible penny away from us, and to waste our money on pointless, stupid and useless government programs, there wouldn't be such a "boy who cried wolf" aspect to this entire debate.
Which leads me to the next resonant thing Obama said:
"the plan I'm proposing will cost around $900 billion over ten years - less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration".
At first, I cringed. The fundamental need of Democrats to demonize and punish successful people is one of the more embarassing things about the Democratic party, in my opinion. They may as well come out and say, "We're losers. We'll always be losers. We can't achieve anything. But we can get together and drag down anybody who won't be a loser just like us."
Putting aside the class-warfare implications of his statement, though, there are things that are sometimes worth the cost. Again, yes, if the Democrats didn't have such an extensive history of simply taxing for the sake of taxing, and spending for the sake of spending, they would be taken more seriously. However, the Republicans, under George Bush, were guilty of the same thing, just to a much smaller extent.
I can't help but believe that the one and only government initiative that I can see justifying a rollback of tax cuts, or even justifying an increase of taxes, is the ability to finally provide some health-care security to everybody, and to extend coverage to the 30 or 40 million Americans who currently lack it.
It was refreshing to see Obama finally take the lead on this issue. He made a grave error by turning this thing over to congressional Democrats to sort out. Granted, he was trying not to repeat the mistakes of the Clinton health initiative, but handing his program over to a bunch of special-interest whores was a bad idea from the start. I'd be surprised if more than a dozen of them gave a damn about health care for anybody. The few things they managed to produce were written entirely by lobbyists. For example: the number of proposals that preserved big pharma's ability to destroy America were astounding. The provisions that made everybody sacrifice, except the labor unions, was impressive. And not one single proposal to curtail the cost of litigation was brought forth.
I trust Obama. I think he's an honest man and a brilliant man. I don't agree with his politics a lot of the time, but I think he's smart enough to learn.
Most of all, I trust him more than I trust the lobbyists who own Washington. So, I'm glad he's taking charge of this debte.
That sort of goes along with the territory, as the definition of conservatism generally means "conserving" an existing order and liberalism generally involves tinkering with the formula. The liberals have the harder job: trying to make improvements on systems that have been proven throughout the entire course of human history.
As some who know me already know, I support Obama's government health care reform. In fact, I support some of the more radical options including a government-option. My preferrence would be a Medicare for all provision that allowed every American the ability to enroll in the same health insurance program that our seniors do.
I have some personal perspective on this. I didn't have health insurance for a few years during my 20s. Fortunately, I was young and healthy, but I also had to pay for things like an ambulance ride to the ER when a little kid cut my wrist open with an ice-skate. I also remember removing my stitches with a swiss army knife because I couldn't afford a doctor visit to have a physician do it.
Also, as a small business owner, I simply cannot afford to provide health-insurance to my employees the way we currently fund health care in this country. I know that a government overhaul that included adding health benefits would be expensive to me. However, my hope is that it would be possible, which it isn't right now.
We are paying 2 to 3 times more, per patient, on health care in this country than any other industrialized country. I know that providing health insurance to every American will be expensive, but it makes sense that the following areas are areas for improvement:
1. Trial lawyers are not improving the health of americans. Threat of litigation drives insurers and physicians to perform unnecessary tests and procedures and adds to the cost of health care. Trial lawyers would argue that without the ability to sue, doctors would not perform good medicine. However, if this were true, we'd have the best medicine the world had to offer. We don't. In many cases, our health outcomes are actually WORSE than those of other industrialized nations.
2. We pay 2 to 3 times more per patient on health care in the US than any other industrialized country. The medical industry is remarkably non-standardized. There are centers of excellence that produce superior health outcomes at lower costs. The Mayo Clinic is one such center. We need to do a better job of proliferating best-practices through the health care industry.
3. The pharmaceutical companies are thieves and are stealing from you just because you're American. They want to destroy the American economy and to prove it, they're charging you about twice what most other industrialized countries pay for pharmaceuticals. They're charging you 20 or 30 or 40 times what they charge in the developing world? Why? Because we'll pay it.
All we have to do is say we won't pay it, just like everybody else in the world has done, and they'll stop. Trouble is, their lobbyists are constantly trying to protect their right to steal from Americans. So far, they're doing a great job. Any meaningful reform of American health care would include constraints on pharmaceutical costs. I'm not advocating that we pay any less than any other industrialized country. I just don't think that paying 50% or 100% or 150% more should be allowed.
There are other ways we could control costs: for instance, insisting that we can import pharmaceuticals from any other country in a fee-trade zone. That way, we could import drugs from Mexico and save 80% or so. They've already retaliated by threatening not to sell pharmaceuticals to any country that exports them to the United States. We should counter-threaten to deny the US market, entirely, to any pharmaceutical company that violates free-trade agreements and takes punative action against free-trade partners. Personally, I wish our legislators would use threats like this as a club to get big pharma to stop trying to destroy the United States.
If I had my way, I'd take every major executive from every major pharmaceutical company one-on-one into a locked room for 30 minutes and show them the error of their ways. These are America-hating, profiteering organizations who are trying to bankrupt us. Just us. Not Canada. Not Japan. Not Great Brittain. Not Germany or France. Just the United States of America.
4. Although aggregate costs will rise moderately, individual health policy cost should, in theory, go down. Why? Because we've got a terrible free-rider problem in America. Employers (like me) who don't offer health insurance benefit if spouses of our workers have health insurance. ANOTHER COMPANY is subsidizing the health-care of some of my employees.
Why, you might ask, don't I insure my employees and right this wrong? One of the main reasons is that I can't afford to subsidize the health-care of SOME OTHER COMPANY'S employees.
Also, as we all know, uninsured people will sometimes delay care until they have to be taken to a hospital where they receive the most expensive health-care we can offer: the emergency room. With regular access to a physician, we may be able to avoid some of these $1,000 ER visits by providing a few $80 periodic checkups.
Overall, I'm not naive. I know this will cost money. However, we're already insuring our nation's most expensive patients: the elderly and the poor.
When my business was very new, I had a person who worked in my office who made $8 or $9 an hour. She supported 2 kids and a worthless sperm-donor baby daddy. They had better health-care at lower copays and deductibles, than my family did under the plan I was paying for, myself.
So, the idea that "government health care" is worse than what we're getting through private insurance is laughable, in my opinion.
One problem occurred to me as Obama said these words about detractors of Ted Kennedy, a long-time supporter of a government health-care plan: "In their mind, his passion for universal health care was nothing more than a passion for big government."
Trouble is, it isn't like that. The problem with Kennedy is that people perceive that his passion for big government was simply manifesting itself at the moment in a passion for universal health care.
I believe health care is a necessary and important government service. However, the left's willingness to tax everybody to death and try to provide a wasteful government solution to every problem has left people wary.
On this, I will only say: let's not shoot the messenger in this case. Not every government program is bad. Yes, if the left weren't so willing to tax every possible penny away from us, and to waste our money on pointless, stupid and useless government programs, there wouldn't be such a "boy who cried wolf" aspect to this entire debate.
Which leads me to the next resonant thing Obama said:
"the plan I'm proposing will cost around $900 billion over ten years - less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration".
At first, I cringed. The fundamental need of Democrats to demonize and punish successful people is one of the more embarassing things about the Democratic party, in my opinion. They may as well come out and say, "We're losers. We'll always be losers. We can't achieve anything. But we can get together and drag down anybody who won't be a loser just like us."
Putting aside the class-warfare implications of his statement, though, there are things that are sometimes worth the cost. Again, yes, if the Democrats didn't have such an extensive history of simply taxing for the sake of taxing, and spending for the sake of spending, they would be taken more seriously. However, the Republicans, under George Bush, were guilty of the same thing, just to a much smaller extent.
I can't help but believe that the one and only government initiative that I can see justifying a rollback of tax cuts, or even justifying an increase of taxes, is the ability to finally provide some health-care security to everybody, and to extend coverage to the 30 or 40 million Americans who currently lack it.
It was refreshing to see Obama finally take the lead on this issue. He made a grave error by turning this thing over to congressional Democrats to sort out. Granted, he was trying not to repeat the mistakes of the Clinton health initiative, but handing his program over to a bunch of special-interest whores was a bad idea from the start. I'd be surprised if more than a dozen of them gave a damn about health care for anybody. The few things they managed to produce were written entirely by lobbyists. For example: the number of proposals that preserved big pharma's ability to destroy America were astounding. The provisions that made everybody sacrifice, except the labor unions, was impressive. And not one single proposal to curtail the cost of litigation was brought forth.
I trust Obama. I think he's an honest man and a brilliant man. I don't agree with his politics a lot of the time, but I think he's smart enough to learn.
Most of all, I trust him more than I trust the lobbyists who own Washington. So, I'm glad he's taking charge of this debte.
Monday, September 7, 2009
September Perspective on Small Business
We just finished up one of our worst months in ages. Not that surprising, really. We're at ground-zero of the current economic fiasco. At least we have the werewithall to ride the storm a little longer. We also got some work last week that should keep us busy for a while. All in all, things are not where I'd like them to be, but we should be able to limp along until our busy season hits. (Usually in the December time-frame.)
I am 2 months shy of renewing my franchise license. I opened my doors on the last day of January 2005, but I actually purchased my license in October 2004.
5 years of self-employment has been an adventure. I have only one regret about going into business for myself: I should have done it years earlier. I am better off in every conceivable way now that I am self-employed. (Granted, you might want to ask me my opinion a year from now if the busy season doesn't deliver.)
Even though things have been slow, I haven't laid anybody off, yet. We've had to fire people for reasons unrelated to the economy. (Both of them simply stopped showing up for work.) We went through a few weeks were there was, literally, no work for anybody to do.
I treated it as business as usual. I have expectations of my employees: that they'll show up on time and they will work once they're here. However, I feel I have obligations to them in return. For instance, that I won't send them home early (and thus cut their weekly pay for a few hours) just because we're slow.
We made work for them to do in the warehouse. We had them finish the upstairs offices that have been in-progress for more than a year, now. We had them organize the equipment and implement a few visual management systems I've wanted for a while, now.
We also sent people off for some much-needed out of town training and certifications. I'll probably send off a few more folks in the coming months.
Now, we're busy, thank goodness. I can't say that I will never lay off a worker. Who knows what the future brings. We went 2 weeks without any work, which is one thing. I can dip into my personal savings to keep the place afloat. However, there are limits to my resources. If the slowdown had lasted 3 months, I would have had little choice but to let people go.
That is a last resort for me, though. To me, that's a complete game-changer. From that point forward, how can I blame an employee who feels that my company has shown no loyalty to them? How can I take the moral high ground when an employee slacks?
I also feel that I have an obligation during this economic downturn. Even if I didn't make a penny, I want to employ people. The jobs I have may offer modest pay, but for the workers who take them, that pay is the difference between a dignified, modest standard of living, and poverty. These people worked for me when times were good for me. I want to do all I can to make sure they keep their jobs when times are bad for me.
Underneath it all, I'm optimistic. I'm doing all I can to expand our marketing reach. I'm ready to commit full-force to some initiatives my franchisor is launching that should allow us to continue to grow despite the economic conditions in our corner of the world.
We've grown every year during our 5 years in business. I don't see why this year can't be the same. We took a hard shot by crappy August results, but we still stand an outside shot at a million in sales this calendar year.
The biggest challenge facing us is that we're transitioning from being a smallish business to having to implement the same systems and controls that large businesses do.
In the past, we could get away with relying on the fact that either I, or my operations manager, Mike, knew what to do in a given situation. That works when you have 2 trucks and 4 employees.
Right now, we have 5 production trucks and enough people to staff all of them. I can't be 5 places at once, and neither can Mike. Which means adding some supervisory capacity, but also means training the people all the more thoroughly so they can operate with minimal supervision.
Training and the HR function are becoming more and more critical to our success. There's just no way you can run a $5 million dollar business with the same management structure that worked as a $500,000 business. So, our days without an HR and Training administrator of some sort are severely numbered.
The one thing that I wasn't ready for with small business is how much the business environment changes every year. The restoration industry has changed dramatically even since I first got in to it. We constantly have to change and improve our way of doing things in order to stay one step ahead of the competition.
Every company has the same thing to deal with: improve or die, but the pace of change in small business is staggerring. Entire markets disappear virtually overnight.
5 years ago, a printing business was a viable business opportunity. However, in the past 5 years, half the printers I used to know are out of business. Half of the remaining ones are trying to sell.
I try to remind myself whenever I get frustrated that we have to implement a new system or procedure or respond to a new market challenge, that the alternative is to have a business that essentially remains unchanged from year to year: like printing.
The keys to small business, or to business in general, never really change from year to year. Treat employees well. Treat customers well. Provide quality goods and services at prices customers are willing to pay. Respond to market changes. Look for opportunties to grow.
Most of all: when you're no longer up to the challenge of doing those things, it's time to get out.
I don't feel like it's time for me to get out, just yet. We're still growing, which means I'm still excited and engaged. The past 5 years were everything I had hoped they would be and more. I hope to make the next 5 years even better.
I am 2 months shy of renewing my franchise license. I opened my doors on the last day of January 2005, but I actually purchased my license in October 2004.
5 years of self-employment has been an adventure. I have only one regret about going into business for myself: I should have done it years earlier. I am better off in every conceivable way now that I am self-employed. (Granted, you might want to ask me my opinion a year from now if the busy season doesn't deliver.)
Even though things have been slow, I haven't laid anybody off, yet. We've had to fire people for reasons unrelated to the economy. (Both of them simply stopped showing up for work.) We went through a few weeks were there was, literally, no work for anybody to do.
I treated it as business as usual. I have expectations of my employees: that they'll show up on time and they will work once they're here. However, I feel I have obligations to them in return. For instance, that I won't send them home early (and thus cut their weekly pay for a few hours) just because we're slow.
We made work for them to do in the warehouse. We had them finish the upstairs offices that have been in-progress for more than a year, now. We had them organize the equipment and implement a few visual management systems I've wanted for a while, now.
We also sent people off for some much-needed out of town training and certifications. I'll probably send off a few more folks in the coming months.
Now, we're busy, thank goodness. I can't say that I will never lay off a worker. Who knows what the future brings. We went 2 weeks without any work, which is one thing. I can dip into my personal savings to keep the place afloat. However, there are limits to my resources. If the slowdown had lasted 3 months, I would have had little choice but to let people go.
That is a last resort for me, though. To me, that's a complete game-changer. From that point forward, how can I blame an employee who feels that my company has shown no loyalty to them? How can I take the moral high ground when an employee slacks?
I also feel that I have an obligation during this economic downturn. Even if I didn't make a penny, I want to employ people. The jobs I have may offer modest pay, but for the workers who take them, that pay is the difference between a dignified, modest standard of living, and poverty. These people worked for me when times were good for me. I want to do all I can to make sure they keep their jobs when times are bad for me.
Underneath it all, I'm optimistic. I'm doing all I can to expand our marketing reach. I'm ready to commit full-force to some initiatives my franchisor is launching that should allow us to continue to grow despite the economic conditions in our corner of the world.
We've grown every year during our 5 years in business. I don't see why this year can't be the same. We took a hard shot by crappy August results, but we still stand an outside shot at a million in sales this calendar year.
The biggest challenge facing us is that we're transitioning from being a smallish business to having to implement the same systems and controls that large businesses do.
In the past, we could get away with relying on the fact that either I, or my operations manager, Mike, knew what to do in a given situation. That works when you have 2 trucks and 4 employees.
Right now, we have 5 production trucks and enough people to staff all of them. I can't be 5 places at once, and neither can Mike. Which means adding some supervisory capacity, but also means training the people all the more thoroughly so they can operate with minimal supervision.
Training and the HR function are becoming more and more critical to our success. There's just no way you can run a $5 million dollar business with the same management structure that worked as a $500,000 business. So, our days without an HR and Training administrator of some sort are severely numbered.
The one thing that I wasn't ready for with small business is how much the business environment changes every year. The restoration industry has changed dramatically even since I first got in to it. We constantly have to change and improve our way of doing things in order to stay one step ahead of the competition.
Every company has the same thing to deal with: improve or die, but the pace of change in small business is staggerring. Entire markets disappear virtually overnight.
5 years ago, a printing business was a viable business opportunity. However, in the past 5 years, half the printers I used to know are out of business. Half of the remaining ones are trying to sell.
I try to remind myself whenever I get frustrated that we have to implement a new system or procedure or respond to a new market challenge, that the alternative is to have a business that essentially remains unchanged from year to year: like printing.
The keys to small business, or to business in general, never really change from year to year. Treat employees well. Treat customers well. Provide quality goods and services at prices customers are willing to pay. Respond to market changes. Look for opportunties to grow.
Most of all: when you're no longer up to the challenge of doing those things, it's time to get out.
I don't feel like it's time for me to get out, just yet. We're still growing, which means I'm still excited and engaged. The past 5 years were everything I had hoped they would be and more. I hope to make the next 5 years even better.
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