Replies to This Discussion

Permalink Reply by MedusaOblongata on April 30, 2012 at 8:26pm

I’d like to make you a business offer…

Seriously. This is a real offer. In fact, you really can’t turn me down,
as you’ll come to understand in a moment.

Here’s the deal. You’re going to start a business or expand the one
you’ve got now. It doesn’t really matter what you do or what you’re
going to do. I’ll partner with you no matter what business you’re in
— as long as it’s legal.

But I can’t give you any capital — you have to come up with that
on your own. I won’t give you any labor — that’s definitely up to you.
What I will do, however, is demand you follow all sorts of rules about
what products and services you can offer, how much (and how often)
you pay your employees, and where and when you’re allowed to
operate your business. That’s my role in the affair: to tell you what to do.

Now in return for my rules, I’m going to take roughly half of whatever
you make in the business each year. Half seems fair, doesn’t it?
I think so. Of course, that’s half of your profits.

You’re also going to have to pay me about 12 percent of whatever
you decide to pay your employees, because you’ve got to cover my
expenses for promulgating all of the rules about who you can employ,
when, where, and how. Come on, you’re my partner. It’s only "fair."

ETA: Any failures and/or losses along the way will be your responsiblilty.
I am only here to tell you what to and how to do it.

Now… after you’ve put your hard-earned savings at risk to start this
business, and after you’ve worked hard at it for a few decades
(paying me my 50 percent or a bit more along the way each year),
you might decide you’d like to cash out — to finally live the good life.

Whether or not this is "fair" — some people never can afford to retire
— is a different argument. As your partner, I’m happy for you to sell
whenever you’d like… because our agreement says, if you sell,
you have to pay me an additional 20 percent of whatever the
capitalized value of the business is at that time.

I know… I know… you put up all the original capital. You took all the risks.
You put in all of the labor. That’s all true. But I’ve done my part, too.
I’ve collected 50 percent of the profits each year. And I’ve always come up
with more rules for you to follow each year. Therefore, I deserve another,
final 20 percent slice of the business.

Oh… and one more thing…

Even after you’ve sold the business and paid all of my fees,
I’d recommend buying lots of life insurance. You see, even after you’ve
been retired for years, when you die, you’ll have to pay me 50 percent
of whatever your estate is worth.

After all, I’ve got lots of partners and not all of them are as successful
as you and your family. We don’t think it’s “fair” for your kids to have
such a big advantage. But if you buy enough life insurance, you can
finance this expense for your children.

All in all, if you’re a very successful entrepreneur … if you’re one of the
rare, lucky, and hard-working people who can create a new company,
employ lots of people, and satisfy the public … you’ll end up paying me
more than 75 percent of your income over your life. Thanks so much.

I’m sure you’ll think my offer is reasonable and happily partner with me
… but it doesn’t really matter how you feel about it, because if you ever
try to stiff me — or cheat me on any of my fees or rules — I’ll break down
your door in the middle of the night, threaten you and your family with
heavy, automatic weapons, and throw you in jail.

That’s how civil society is supposed to work, right? This is America , isn’t it?

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Permalink Reply by Joseph L. Rogers on April 30, 2012 at 9:12pm

Wow.  Dramatize much?  Your premise is flawed and over-simplified.  Proper Estate and Financial Management allows for better returns than what you speak of.

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Permalink Reply by Nathanael on April 30, 2012 at 10:40pm

Take it to the Great Debate.  This ain't what the OP asked for.

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Permalink Reply by LShieldes on May 1, 2012 at 6:55am

Got a friend who has a side business.  He and another opened a food truck that they run at a few bars every weekend.  He doesn't make a ton of money, but I've never seen him more proud of himself, nor have I seen him mature so much.

 

Got another friend, amazing salesman, he could sell anything.  Had worked for many different firms but would get laid off because he would get too aggressive and usually mouth off to the wrong people, or his firm would get bought out.  Learned an industry from another guy, saw that guy turn to drugs, found some financial backing and is becoming very succesful.  Works his ass off, but it is for himself and if he has to reign himself in he knows fully why.  Been begging for me to move up there and work for him.

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Permalink Reply by Joseph L. Rogers on May 1, 2012 at 7:31am

I can get down with that.  I came to the conclusion that I was "psychologically unemployable" some time ago, much like your friend.  The maturity comment is interesting, too.  Brett wrote articles along those lines at one point, I believe.

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Permalink Reply by SB on May 1, 2012 at 10:29am

Congratulations on your business success.  As a friend once told me when I started my first business "Now that you own your own business you only have to work half the day--and you get to pick which 12 hours it is!".

 There is no other feeling like being your own boss.  It brings real meaning to the words 'living by your own wits'.  I have owned an environmental consulting firm since 1997, have taken on partners and let them go, have ranged from 2 to 18 employees, but in all that time I have been acutely aware that it is by my will that we survive.  That is a very humbling, scary and exhilarating realization.

Good luck to you in this endeavor.  Don’t give up, even when the joy wears off and things look bleak.  Businesses run in cycles and, chances are, you’ll experience both the top and the bottom numerous times.

 

For what its worth, the Lower Brain has it right—the government will try to take as much as they can get, and then some…

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Permalink Reply by Suburban Sentinel on May 1, 2012 at 10:51am

I was a corporate drone for 10 years and now a business owner for 20+ years.  In my view neither is better, just different.

As an employee you can be axed at any moment and your income potential is usually limited.  But steady paychecks, sick days and vacations are nice too.

As a business owner sometimes you end up just serving multiple taskmasters by way of unreasonably demanding customers and there are very few owners who actually get away from it for a day let alone a week.  It can be all consuming.  You have to worry about everything all the time.

As my granddaddy said "the grass is always greener but it's just as hard to cut".

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Permalink Reply by SB on May 1, 2012 at 11:36am

I hear what you're saying.  Looking back, I think that I have taken about 6 weeks of vacation in 15 years.  Some guys I know get that every year!

Regardless of the downside, and there are negative aspects to owning your own business, I love what I do and could not imagine working for someone else.     

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Permalink Reply by Suburban Sentinel on May 1, 2012 at 11:50am

+1 I think loving what you do is key.  The first business I had for 18 years I absolutely hated and drove me nuts.

I think the key to self employment is do that which inspires you and outsource the rest.

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Permalink Reply by Mudinyeri on May 1, 2012 at 3:01pm

I sold my business to spend time with my family.  (I traveled nearly 100% with brief stops at home to kiss the wife, hug my son, do the laundry, re-pack my suitcases and head back out again.)

A little over five years ago, I sold the business and took a W2 job.  For the most part, the W2 job has been unrewarding.  However, I'm back on track toward self-employment again.  If all goes well, I'll be gainfully self-employed in another 2-3 years and able to spend time with my family.

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Permalink Reply by Michael D. Denny on May 2, 2012 at 4:55pm

It's the American way, quite literally. You can do no better than entrepreneurship in this, what one Founding Father called "The animating contest of Freedom". 

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Permalink Reply by Joseph L. Rogers on May 3, 2012 at 11:49am

+1, Denny.

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