A Business Owner's Take On The Current Economic Situation

[arpie]

Business Owner Who Tells It Like It Is


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 Subaru Outback outside. You've seen my big home at last year's Christmas party. I'm sure all these flashy icons of luxury conjure up some idealised 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 2 bedroom flat for 3 years. My entire living area 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 baked beans, stew and soup because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a wonky transmission. I didn't have time to go out with women. 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 $50,000 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 David Jones for the latest hot fashion item, I was trolling through the discount stores 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 Subaru, the vacations... you never realise the back story and the sacrifices I've made. 


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

Yes, business ownership has its 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. Unemployment taxes. Taxes on taxes. I have to hire an accountant 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 cheque to the Australian tax Office for $288,000 for quarterly taxes. You know what my "stimulus" cheque was? Zero. Zip. 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 cheque? Obviously, government feels the latter is the economic stimulus of this country. 

The fact is, if I deducted (Read: Stole) 50% of your pay 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 the government suddenly mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Canberra 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 Australia and always has been. To restart it, you must stimulate it, not kill it. But the power brokers in Canberra believe the poor of Australia are the essential drivers of the Australian 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 4WD 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 penalises 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. 

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



Signed,



Your boss

 

[johnno]

He has some good points

but he must understand not everyone is cracked up to be an employer.

and the people who work for him now has also helped make his money.

but in doing so they have been paid for it.

As the saying goes

work hard and be good to your mother

[glennmreid]

Some very good points made. There is alot of truth in that statement.

[pjbink]

The stereotype of the the worker being present from 9 to 5 (and only mentally present from 12 to 5), while the boss being on the job all hours is a rather unrealistic. Along with the workers frivilously spending all their money while the business owner wisely investing for the future. After all it was the business types that helped get us into this mess (eg subprime lending, dodgy investment schemes etc). I take it he hasn't heard of shift workers. My last job I worked every hour around the clock at one time or another. They kept me on afternoon shift for almost four years straight and then they would make me come in Sat morning as well if that what they required. The bosses on the other had would be at home with their families every night and weekend.

As to the stimulus packages they give it to the low income earners so it is more likely to be spent. Not on designer clothes and flashy cars - but basics and perhaps small luxuries and entertainment. The idea is to boost spending and the circulation of money in the economy - quickly. Very important to small business by the way as they are very dependent on consumer spending. If anything is the 'heart of the economy' it is consumer spending.

I'm not sure where he gets the 50% tax figure from. Company tax is 30%, and companies have a lot of deductions they can claim (and he neglected to mention), eg depreciation, R&D, sometimes fuel excise, cost of managing tax affairs. The average PAYE taxpayer has very few deductions available and the top marginal rate is a bit under 50%.

[GregL]

I just don't understand why everyone doesn't get it???

Tax cuts are fairer to everyone.

The more you earn, the more you spend......

[Robbielites]

That one has been doing the rounds a bit..

There have been a few responses posted around the net, I like this one though..

Thank you for your words explaining your life story and how you got where you are today. Yes, we have been "rumbling" about the future of this company because we are paid at existence level wages and if the company goes under, we will all be up the creek - but we will take comfort in knowing that you took the paddle with you. At least we'll know it's safe.

You'll be pleased to know that your Toyota Corolla is still serving even though you dumped it for the new Mercedes you get every year - you see, I drive it here to work every day. It's all I can afford, but it gets me here and back so that I may make the products you sell which enable your nice house and new car. Oh, and the transmission is still defective. Wish I could afford to get it fixed; it's a good, dependable car and with what YOU pay, I can't afford a newer one.

We appreciate that you acknowledge our sacrifices in life so that you might live more prosperously, even though you appear to have nothing but contempt for your employees with your implication that we don't actually do any work, all we do is show up and expect a paycheck. Yet, there is still product flowing out the door. Thank goodness for Magical Elves doing all the work, huh?

So, 28 years ago your friends were making a "modest" $50k per year at only 40 hours per week...are there any of those jobs still available? We ask because it would be a step up from the job we have with you that pays $28k for 40 hours. (And that's in TODAY'S economy.) Oh, and we stay at home weekends a lot, too. We would date more, but for some reason, the people we date don't appreciate a Big Mac dining experience the way folks used to.

Now the economy is falling apart and you are asking the people who keep income flowing your way to sacrifice so you can still get your new car next year.

As you say, you 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." Oddly, all of those items help your bottom line because you deduct them from YOUR taxes and take your depreciation allowance, interest deductions, and all those other expenses of running your business. I used to be able to deduct my mortgage interest, but since the interest rates rose faster than my pay, the foreclosure ended that. My landlord still gets HIS deduction, though, thank goodness!

You may want to check to see if your accountant is stealing from you because it's impossible for 14 of us to rack up $21,000 EACH in tax requirements during the last quarter. For someone who seems obsessed with their business, you are fairly oblivious to what's going on with your finances. Of the $288,000 you say you deposited, how much of it will you be getting back when you file you taxes and deduct every penny of it?

That single mother pregnant with her fourth child waiting for a welfare check? Well, she used to work here, but was fired when her babysitter got sick and your reaction was that it wasn't your problem. She's been trying ever since to get a job but when people see she was fired, they assume it was due to nefarious reasons. And thanks to the welfare reforms passed over a decade ago, she has a limited time to collect those safety net checks before she is cut loose to swim on her own or drown.

What color Mercedes are you going with this year, by the way?

Why was it when George Bush gave you the tax cuts you desired, instead of raising our wages or hiring new employees, you put that money in your pocket? Incredibly stimulating, wasn't it? What in the world would lead us to think that you would do anything differently if you receive another round of tax cuts? Would you start offering affordable health care? Didn't think so.

If you don't think the "poor" run our economic engine, try running a business WITHOUT them. Who do you think you are selling your product to? Who does the work which enables you to live the lifestyle you've become accustomed to? Yet you disrespect our contributions and accuse us of defrauding you because we have the nerve to want to be paid for our efforts. (You know, we are called THE WORKING CLASS for a REASON)

So, if you only make 3/4 of a million dollars instead of the full million, your motivation to work and to provide jobs will disappear and you will run off to another country, huh? And you expect us to blame the GOVERNMENT?

What a whiny, snivelling, greedy, inconsiderate coward you are! You make it clear that you DON'T give a damn about your employees and their worries were NEVER yours, yet you don't mind exploiting us for every penny you can gather.

So, close your company, move to another country, and retire. Spend the riches we have helped you to accumulate. Turn your back on your country - we'll be better off without you. We're at a time when everyone needs to pitch in together to fix the problems the "Free Market" has caused and if you would rather cry in your Dom about how abused YOU are because you can only have steak four times a week instead of five, don't let America's door hit you in the ass on your way out...

Putz.

Signed,

The hard working employees who keep your company going

[jewgaffer]

That's a well written letter and a well written response, it seems open minded arbiration is needed, if there is ever going to be such a thing, to establish a middle ground in the best interests of all and for the benefit of the country.

Cheers

jewgaffer

[Nashy]

when ronald reagan was in power in the US he had the great idea of the "trickle down effect". By reducing the taxes of the upper classes, they hoped that they would then increase their spending and it would flow on down to the people below them making everyone rich, just like the business owner before said he would. Well guess what happened, the rich became richer as they simply just pocketed it and the rest, to offset these taxes became poorer.

[Helmut]

Lets forget modern day economics and go back to the barter system.....i'm sure fish were worth a bit back then so we'll all eat just fine.

I am an employee but do also have my own retail business which is run by my wife. We are also struggling but managing and the need to cut staff is ever present but is only done as a last resort in any business. Its never an easy decision to mess with someone's livelihood no matter how well off or not.

At some point though and not just in business sometimes you have to look out for number one. Number one should always include your family.

Generally all stops are taken to preserve people's employment and pay cheques but sometimes that's not enough and employment costs are not a fixed and necessary expense at times.

Life is sometimes tough but people survive and move on and are often thankful as a result. Often a push is needed for some people to get ahead and move out of a comfort zone.

anyway back to fishing.................how about those bull sharks eh!! Anyone watch that special last night on how they're found 50 miles inland on the Brisbane river system!!?

[urchin]

great letters.. are they actually real though? lol

[james7]

Sure, you see me park my Subaru Outback outside. You've seen my big home at last year's Christmas party. I'm sure all these flashy icons of luxury conjure up some idealised thoughts about my life.

Subaru Outback - "flashy icons of luxury"?????

I never considered an Outback as "flashy".

Now I will demand more respect from everyone!

My diet consisted of baked beans, stew and soup ... I drove a rusty Toyota Corolla with a wonky transmission. I didn't have time to go out with women. Often times, I stayed home on weekends, while my friends went out drinking and partying...

This is my life now , except sustitute the "Corolla with a wonky transmission" with an Outback with a wonky transmission!

That's a well written letter and a well written response, it seems open minded arbiration is needed, if there is ever going to be such a thing, to establish a middle ground in the best interests of all and for the benefit of the country.

Cheers

jewgaffer

On a serious note, I agree with you Jewgaffer, "open minded arbiration is needed" and "establish a middle ground in the best interests of all and for the benefit of the country".

Cheers

Peter

Edited February 18, 2009 by peterS

[Helmut]

I have a tricycle and a metro ten as we can only afford one car at the moment and guess what.........my wife drives it. Its a 1995 honda, but she happily drops me at the lake on saturday mornings but you get some funny looks from the passengers on the bus in the afternoon.

[pjbink]

when ronald reagan was in power in the US he had the great idea of the "trickle down effect". By reducing the taxes of the upper classes, they hoped that they would then increase their spending and it would flow on down to the people below them making everyone rich, just like the business owner before said he would. Well guess what happened, the rich became richer as they simply just pocketed it and the rest, to offset these taxes became poorer.

Yes the rich got richer and the poor got poorer and on top of that the budget deficit blew out. His successor and fellow Republican George Bush Senior described it as "voodoo economics".

Edited February 18, 2009 by billfisher

[BFB]

Being a small business owner I really like the statement made that the boss gets to go home every night to the family and has weekends free.

I can assure that there is not very many waking hours in the day that I am not either working on or thinking about the business and how to make it happen. I can not remember the last time that I did not at least spend some time of the day on the computer conducting business work. That includes weekends, holidays, etc.

This is most likely the reason why I treasure the chance I have to go fishing but, unfortunately, can not do it often enough.

I often sit back and think, wouldn't it be nice to be an employee again and know that from the time I leave work till the time I get back to it the business is not my worry and I can relax.

Sure running a business has its lurks and purks but in the end it is down to just hard work and many hours to make it work. If as an employee you averaged between 80 to 100 hours per week, 52 works per year, at work that you would like to be able to afford what it seems the boss takes for granted.

Remember, if running a business was easy everyone would be doing it and small business keeps the country going.

Support small business it is what makes Australia work.

Glad that is off my chest. Let's get back to some nicer topics like when is the next time I am going fishing and will I catch anything this time?

[Helmut]

Since this discussion is at "The Bar" then i'll have another schooner of pale thanks........

If people were serious about and enjoyed there jobs they would also spend time away from work thinking about there work. If not then maybe there in the wrong profession and don't have the balls to make changes. (pardon the expression)

got any nuts left barman?

[Dreamtime]

Interesting, to say the least.

When I was an employee I was working 3 jobs, totalling between 12 and 16 hours a day. Go home totally knackered, with no concerns, except for personal pleasure and or entertainment. (beer, fishing, girls,etc..)

As an owner of several businesses, employing in excess of 100 staff, I am still hammering away 16, and sometimes more, hours each day. Go home totally knackered, head still spinning with forward planning, staff discipline matters, el nino (shipping business), fuel prices, etc, etc, etc... and have very little time to enjoy my family, fishing or other recreational past times as I did before. A holiday is out of the question.

Now, the decision to become a businesman was mine alone. There is no sense or reason behind complaining about the hours worked, taxes, sacrifices, risks or losses that may be encountered in this venture. To think that an employee could possibly be sympathetic is unrealistic. That is the wrong forum to be having this discussion in. It would be like the Army General whining to the enlisted Corporel - WTF?

Write to your local and Federal member. They don't care either, but they are used to that sort of rhetoric.

As the saying goes: If you can't stand the heat then get out of the kitchen.

I know that I am laying a platform for my future generations. That's what being a parent is all about. If you ever get the opportunity to go into business for yourself, then go for it. You will only get out of it what you put in.

That's my 2 bobs worth anyway.

Cheers

Mariner.

Edited February 18, 2009 by Mariner 31

[tide'n'knots]

I have lived both sides of this story. I started my own bussiness 8yrs ago and know exactly where the BOSS is coming from with everything you continually have to pay - put simply you get bent over big time and the government expect YOU to supply the ky jelly while THEY are haveing thier way with you! I recently borrowed money to tie up all my business debts and started working for someone else. Although the company debt is now gone I still have personal debts that will now take 7 yrs to pay. I started a business with dreams of having something better than I could have by working a job for someone else. At one stage I had built things up to a point where my yearly turnover was about 130k, only small compared to some busnesses but i was proud of my achievments none the less. My daughter came to work for me around this particular time straight out of school and I remember sitting at the computer with her at the end of month about to pay all the bills, there was about 10grand in my account - her response was WOW! I simply said to her watch this!

I proceeded to pay the monthly bills - employee wages ,tax,super, petrol, Gst, carpayments etc finally my account was down to just over 300 dollars and I turned to her and said - I still have to pay ME yet and I still have to pay tax and super out of that!

I found that the more i grew so did my expenses and all I was doing was keeping someone else employed.

Owning a bussines is a lot tougher than some people realise and I tip my hat to those who have become sucessful and wealthy from a business - believe me they earned it. The stress of worrying how you are going to generate enough income to get through is enough to stop most people.

As i said before I now work for someone else and the repayments on my personal loan are taken out of a seperate account that I dont see or have to even think about - I have more time to go fishing, no more money worrys even though I only earn a very modest wage and I feel like the weight of the world has been lifted from my shoulders.

even though the BOSS in this particular case seems greedy - walk a mile in his shoes - I guarantee you will very soon be grateful you have a job and that there are people just like him who has the intestinal fortitude to do what he has done so that you can have a job!

Pete.

[Davemmm]

In my job I here this story about once a month. It usually comes after I have explained to a boss that what he has done to his employees for the last couple of years is highly illegal and he owes them a couple of bucks in backpay. Thats generally when the whole sob story starts and the small business owner tells me if he has to pay his employees the legal minimum requirement he would go broke and they wouldnt have a job.

Haven't met one yet who decides to close his business and deny himself an income.

Dave

[tide'n'knots]

In my job I here this story about once a month. It usually comes after I have explained to a boss that what he has done to his employees for the last couple of years is highly illegal and he owes them a couple of bucks in backpay. Thats generally when the whole sob story starts and the small business owner tells me if he has to pay his employees the legal minimum requirement he would go broke and they wouldnt have a job.

Haven't met one yet who decides to close his business and deny himself an income.

Dave

then you obviously havent read my post just before yours!

[urchin]

In my job I here this story about once a month. It usually comes after I have explained to a boss that what he has done to his employees for the last couple of years is highly illegal and he owes them a couple of bucks in backpay. Thats generally when the whole sob story starts and the small business owner tells me if he has to pay his employees the legal minimum requirement he would go broke and they wouldnt have a job.

Haven't met one yet who decides to close his business and deny himself an income.

Dave

mate, understandably its annoying not getting paid what you're either entitled to or supposed to get BUT it's ALOT better getting $2 than nothing at all..

hopefully things will start to pick up again slowly..