Business 2 Jobs

Too many companies have "shipped American jobs overseas." That's the mantra that we hear time and time again. More recently even the President of the United States said businesses aren't hiring because they can't get bank loans.

Well, let's set the record straight; the jobs belong to the company that offers them, not to a country, person (or group of persons) or any locale. Wherever the jobs are or go, they don't belong to us, the employees. They belong to the company. We in America, used to understand this. As far as bank loans relating to hiring, here's a clue for those that buy that logic; businesses don't like to borrow money to hire people. Businesses hire people because there's enough demand for the product or service that justifies hiring workers.

As an employer, I often tell candidates that I can give them a job but it is up to them to keep it. You might be surprised at how many people in America think it is the employer's responsibility to provide jobs and conform to wishes the employees dictate.

The mentality in America has shifted and many believe that if a business moves its operations out of the U.S., the company is just being greedy.

If we understand nothing else about the jobs situation, we must know that many business decisions have to do with government regulation and market competition. I.e. if my company makes widgets in the U.S., complying with all governmental regulations and makes a profit of 1% per widget and a competitor manufactures overseas, ships to the U.S. and is able to sell for less than my company I won't stay in business long. And if you say that government regulation in the U.S. exists to ensure safety and quality standards exceeding the rest of the world you would be dead wrong. Yes, those regulations were originally intended for such reasons, but today many government operations are so inept they exist for the mere purpose of justifying someone's job. I have seen this first hand. If you still think I'm wrong about this ask yourself the following; why do many U.S. corporations send quality and safety inspectors to their overseas plants to ensure proper procedures are followed? I'll tell you why; they want the best quality, but not to put up with bureaucratic hassles so prevalent in America.

The United States of America was founded on the basic principle that government should have limited power over the governed. Over the years, we've demonized businesses and come to believe that all corporations make significant profits and therefore, should be able to bear the costs of many of our expenses (both private and government, i.e. healthcare, retirement savings, education, road construction, etc.). Businesses, like families, don't have an unlimited amount of money. Therefore it might be better to rid the country of many of the onerous laws, restrictions and regulations that hinder businesses from growing. I'll get into some of that in a future post.

For now, we should remember that it is cost and demand, for goods and services, that dictate whether businesses hire, fire or move their jobs.

Burning the Koran?

Okay, if you've read any of my other posts, you'll probably be a little surprised by this one.

What an absolutely idiotic idea in Gainesville, Florida, to have a Koran burning day. Here's why the story is so idiotic;

1. To think you're accomplishing anything good by having a Koran burning day is about as stupid a thought as anyone could ever have. Yep, Rev. You're an idiot.

2. Somehow the news media gave traction to this church of 50. That's right, a whopping 50 members.

3. There are idiots in Afghanistan who actually believe this represents America. Yes, I read the AP story this morning where a young Afghan boy (I think 18 years old) said they knew this was the opinion of America and the president. Proof that there are idiots all over the world.

Now, you might ask; what's the difference between foreigners thinking that this represents all of America when we have idiots here in America that think the 9/11 attackers represented all of Islam? NOTHING! And that's the point.

The dumb masses (say it quickly) continually fall for the crap put out by "the media."

God save us all.

Business 1 Profit

This is the first in a series of posts written from my perspective as a small business owner. It is intended to pass along insights into the world of small business by someone who's lived it.

Here are a few ground rules. This information is gleaned from my experience and limited research. While readers and commenters may have questions and points that I'll attempt to answer in a timely manner, it is not a discussion forum (in the style of instant messaging) where you should expect immediate responses to every question/point. While I will attempt to keep all references generic, I ask that commenters/responders do the same. I have 9 years of business ownership experience (first as a sole-proprietor and the last 5 as a corporation which employs people). Prior to that experience I have 9 years in the corporate world where I rose from front-line employee to department manager and where I was responsible for operations and the hiring of operational employees.

So let's get to it.

Profit; businesses exist to make a profit. Pure and simple. Profit shouldn't be a dirty word. Profit offers the opportunity to expand business, offer additional benefits to employees, charitable contributions and guarding against future economic downturns (that require the use of cash reserves to maintain operations). Before any charitable contributions can be made, employee benefits can be purchased or expansions considered, a business must make a profit.

While some would say that employee benefits are a cost of doing business, tax deductible and the right thing to do, they aren't usually required (literally) for the business to produce its product or service and they are only the right thing to do if in so doing it doesn't bankrupt the business (thereby putting everyone out of work).

Tax deductibility is often mentioned by those wishing to part businesses from their money, as a benefit/reason to give up said money. What many of those people often don't get is that deductible or not, the business must first receive the revenue before it can be expensed. I.e. if a business has an annual net income of $50,000 it does no good to be able to deduct a health care benefit (as an example) of $60,000 since it would cause the business to incur a loss of $10,000.

The next time you catch yourself (or others) bemoaning the corporate world for concentrating on profits, consider your personal life. By that I mean we all think we don't get paid enough and we often don't have "enough" money left after paying the bills. We want profit in our personal lives and we often don't care what that means to the business. Oh I know, we are charitable in our giving (how many of us actually give the 10% the bible suggests?) and we "care" about others, but we still think we're owed a certain amount of profit. Well, businesses do care about its people and charities. Many CEO's will tell you they'd be nothing without a good workforce. Therefore, they are willing to pay competitive wages, offer whatever benefits they can and generally treat their people well. Also, many corporate executives and board members actively participate with different charities locally and nationally.

"Profit isn't so bad, but we all know that some businesses have profits that are ridiculously high." How many times have you heard a statement like this? Even if you buy into this philosophy, I ask how much profit is too much? What if an insurance company reports a $10billion profit this year. Do you think that's too much? What if next year that same insurance company has to pay out $12billion in damage claims because a hurricane caused that much damage? Would you still say the company's previous year $10billion profit was too much? If some government agency came along and limited an insurance company's profits to, say $5billion per year and then one year couldn't pay your damage claim because they didn't have the reserves because of the cap on profits, how would you like that?

Next posting will focus on jobs.