Saturday, February 28, 2009

Business Plan...

Being a small-business owner, I can genuinely relate to the following letter. In a culture that loves to pretend that successful people became successful by accident or luck, folks need a reminder that real success is the fruit of hard work, sacrifice, and vision. It is particularly insulting when I hear someone imply that because someone has more, that he or she owes some portion of it to the great collective. We saw this happen with the basketball coach at UConn this week. A reporter had the nerve to ask if Calhoun was going to give back some of his the people. Some have acted like his eruption to the reporter was overblown. Personally, I'd have strangled the reporter. The thrust of the question is that if someone thinks you are paid too much, then you should consider sacrificing some of it.

I believed enough in my own abilities to start up my own business. It's a young operation, so I don't yet have any employees. If today's work includes writing a letter or picking up a set of plans or working up an invoice or making contact with potential new clients, guess who does that job. Ten years from now, if I've survived that long and generated enough business that I can afford to hire a person to do some of that, how patient do you expect I'll be if I overhear one of my employees tell a client of mine, "...that's not my job..."?

That's what I was told yesterday, when I picked up a set of plans and asked the girl whether she checked the scale on them. "Hee, hee...I got my nails done, today..hee, hee...check the scale? No, I don't do that..."

A client is planning on submitting a bid for millions of dollars worth of work. That client wants to beat the other bids, so he hires me to tell him precisely how much work is there. I drive 45 minutes to the reprographic firm, someone I pay to do work for me, and the more-important fact of her life on this day is her friggin' nails. Because I can't afford to repeat this trip if the scale is off, and because my reputation and the future of my business depends on it, I got a scale and checked it then and there. Hee-hee-hee.

I hope this letter hits home.

To All My Valued Employees,

There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country.

However, let me tell you some little tidbits of fact which might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You've seen my big home at last years Christmas party. I'm sure, all these flashy icons of luxury conjure up some idealized thoughts about my life.

However, what you don't see is the back story.

I started this company 28 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.

My diet consisted of Ramen Pride noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn't have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom's for the latest hot fashion item, I was trolling through the Goodwill store extracting any clothing item that didn't look like it was birthed in the 70's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Mercedes, the vacations...

You never realize the back story and the sacrifices I've made.

Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail-out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.

Yes, business ownership has is benefits but the price I've paid is steep and not without wounds.

Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then guess what? I have to pay taxes for employing him.

Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my "stimulus" check was? Zero. Nada. Zilch.

The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (Read: Stole) 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.

Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the poor of America are the essential drivers of the American economic engine. Nothing could be further from the truth and this is the type of change you can keep.

So where am I going with all this? It's quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child's future. Frankly, it isn't my problem any more.

Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

If you lose your job, it won't be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the constitution, and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about....


Your boss

Aside from what I put on a credit card, I didn't borrow big to start up. Recently, there were 2 months where zero business came in, and things were looking bleak. I do not have, nor will I supplicate myself for, a parachute from the government. If I become successful, it will be due to the strength in my own hands, the quality of my work. I don't want to owe you or the state for what I've built. If you read this ten years from now, and you're my employee thinking that I owe you your job, ask yourself how comparatively you've risked and sacrificed.

But I, too, see the writing on the wall for business in America. I'm not convinced that there will be such a thing as independent, for-profit, business anymore. Very soon, if we continue as we're currently headed, the only work shall be what is government funded, controlled, and mandated. Once you've removed the reward from the equation, wherein shall I justify the risk?

Like the author of the letter, like Ayn Rand's character John Galt, I will have thrown my hands up and walked away. Those deadbeats among you aren't worthy of leeching off of us.


  1. I really enjoyed the post. I couldn't agree more. America is built on Entrepreneurship and if they take that away what is America?


  2. Thanks Eric, glad to have you as a reader. I've enjoyed your blog, too, and hope to read more in the future. I'm afraid the answer to your question is: FRANCE...or maybe CUBA.

    Be well, blog more.