Why shouldn't Business accept all of THEIR RISKS.

Profit is the reward.

Claiming you lost money this year buy ONLY making $750 mil. instead of $900 mil. IS NOT LOOSING MONEY OR NOT MAKING A PROFIT.

They should. Apparently unless they are too big to fail or as a result of crony capitalism or corporatism. We small and medium business owners do. Sure, if we go under our employees stand to lose their jobs but that is the extent of their risk. We owners shoulder all of the risk. Many of us pour our compensation back into the business when times are tough. We (our company) take a great amount of pride in the fact that we have not laid anybody off, cut back in benefits (despite a 20% cost increase over the past two years), cut back on Christmas bonuses or reduced anyone's hours. Yet there is still grumbling and discontent from our hourly employees because there haven't been any raises in two years. Me? I've reduced my compensation by almost 25% to keep things at a comfortable level, business-wise certainly not personally. They're still gainfully employed, with a better benefits package than our state employees and getting paid the same as they have been. We could certainly make-do with one or two less of them, but that wouldn't sit well with us. Yet we're still the cheap bad guys who won't give them a raise.


Profit is the reward. And when there is profit left at the end of the fiscal year, we're going to take a chunk of it. If there's a larger chunk, we give them percentage larger bonuses and profit-sharing contributions.


But Washington is able to call a reduction of an increase a cut? While it's such a crazy number for me to try to get a grasp on, it does make a big difference where that $750 million number comes from. Is that net? Gross? EBITDA?

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1980 300TD-China Blue/Blue MBTex-2nd Owner, 107K (Alt Blau) OBK #15
'06 Chevy Tahoe Z71 (for the wife & 4 kids, current mule) '03 Honda Odyssey (son #1's ride, reluctantly) '99 GMC Suburban (255K+ miles, semi-retired mule) 21' SeaRay Seville (summer escape pod)

If a business PROJECTS a profit of $1million and only realize $750k BUSINESS considers it a LOSS of $250k, you know that.

however the AVERAGE person on the street considers it a profit of $750k.


If what you say above is true i commend you for not laying off those one or two "extra" employees however we both know NO business keeps more employees than they KNOW they need

Sounds like businesses use the same accounting as government bureaucrats.
I disagree with both.
Profit is profit, a small profit is still a profit. If my broker tells me that I will earn xxx and I don't can I hold him accountable?

I do not get your argument. Just because some businesses do questionable accounting, they should be taxed more? huh? Your argument seems tangential. at best, to the discussion.

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1982 300SD " Wotan" ..On the road as of Jan 8, 2007 with Historic Tags

After thinking about it, I'd probably revise that to one we could get by without rather than two.

Unless it's a last-ditch effort to keep things afloat (and these past few years it may very well be), I'd bet most companies (of all sizes) are carrying employees they could get by without. And it could very well be in middle or upper management (and probably that's often the case-look at some of Fulcrum525's posts on that matter). When times are good it's easy to overlook it, when they're bad the focus changes.

In our case (and I would imagine for many small/family businesses), it's mostly conscience that keeps them employed. I'd bet the majority of family businesses are employing a family member that they could do without but won't since they're family. I'd like to think it's not me, though.

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1980 300TD-China Blue/Blue MBTex-2nd Owner, 107K (Alt Blau) OBK #15
'06 Chevy Tahoe Z71 (for the wife & 4 kids, current mule) '03 Honda Odyssey (son #1's ride, reluctantly) '99 GMC Suburban (255K+ miles, semi-retired mule) 21' SeaRay Seville (summer escape pod)

I take it, and I could be wrong, that you're not in immediate danger of losing those experienced employees due to their perceived low compensation levels? They aren't going to "jump ship" to a higher paying competitor, otherwise you might consider increasing their wage/benefit package or offer some other form of recognition.

The labor market is in business' favor at the present. As reported in the news, larger companies have cut their largest cost component, human costs, and despite lower sales revenue, have maintained or increased their margins and are sitting on fairly large cash reserves, and the qualified ones have the ability to obtain very low interest loans to add to capital.

Is it really regulatory or tax risks that is preventing hiring, growth or expansion? Or is there a sizable component of "who are we going to sell to?"

Probably not. Our benefits package is better than they're going to find anywhere else (we're currently paying 75% of their premiums but in the face of a 20% HC increase we may have to shift 2.5% more to them) and their pay is still in the neighborhood if not higher than they're going to find elsewhere. Keep in mind, I'm talking about our general labor crew. Some never graduated high school, some have GED's. We've offered to pay for GED classes for those who don't have them and continuing education for those with GED's and have gotten none...zero...of them to take us up on the offer. I would love to move them up on the ladder (on the pay and the responsibility scale). But there are no signs of initiative from them to do so. So as a result, we hire qualified candidates with room to grow and the others get left behind. The days of longevity raises are gone. I'm more than willing to pay well for taking on more responsibility and independence. They want the "paid well" but don't want to do anything more for it. I have one who is sharp enough to handle it and will take it upon myself in the coming year to push him a bit harder, convince him that he is more than capable and reward him for it.

On the other side of the equation, there's a strong disincentive in the state of CT to firing or laying off employees. Get one or two and the unemployment reimbursement goes through the roof. And just to give you an idea of how the system here works, we had an employee retire after the summer of '10. All of the paperwork was filled out and filed in a timely fashion. The former employee filed for unemployment this spring. Our HR manager attended the hearing, provided all of the required paperwork, there was no question the employee left on good terms and of their own volition. They were still awarded unemployment compensation. Sometimes it's easier to put up with some of them than it is to get rid of them.

Overall, we are well positioned for the recovery when it happens. We've hired a new sales rep to cover an comfortably-expanding territory for us (thanks to the big national distributors dropping the ball) and two mid-level managers (much to the chagrin of the hourly employees-however it's due to the impending retirement of one of the principals who has decreased his hours and compensation by half, thereby increasing the hours and compensation of everyone below him). We are diversified enough so that even though things are not great right now, we're still employing everyone, paying all of the bills and making some money. A lot of folks are hurting right now so the last thing I want to sound like I'm going is complaining. If it does, it's absolutely not my intention.

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1980 300TD-China Blue/Blue MBTex-2nd Owner, 107K (Alt Blau) OBK #15
'06 Chevy Tahoe Z71 (for the wife & 4 kids, current mule) '03 Honda Odyssey (son #1's ride, reluctantly) '99 GMC Suburban (255K+ miles, semi-retired mule) 21' SeaRay Seville (summer escape pod)