Politics.... Bush tax cuts for business owners.... Minimum wages... Below is my understanding of these topics... It is another long post, and this time it wont be considered religious in nature. I am just tired of hearing uneducated people talking about stuff they dont understand. If you want to save our economy apply the below information: There is a little known fact that people seem to not understand about business. The majority of businesses in America are operated like the majority of the homes in America- struggling to break even. Homes are concerned with the cost of living, businesses are concerned with the cost of business.There is so much over head and cost associated with business. You have employee taxes and insurance. You have wages and supplies. Don’t forget utilities and advertising. When setting your price for your product or service you have to worry about being able to break even or break better than even. Did you know that a lot of business owners, at least the successful ones are forced to work without pay from their business until trial and error establishes a business model that lets them bring home money? In fact the business has to establish a budget that pays itself and the owner as if they too were employees. If you take that money out before it is truly successful it is like getting a blood donation from a new born baby; it’s not only stupid it’s dangerous and detrimental to your business. Once the business model is set and the business is proven to be a success you must then worry about maintaining these ratios. If you think about a checkbook you have to either stay in the black or show some positive growth. You absolutely can’t afford to show a negative trend where you start losing money. This makes common sense to me! Problems are then inset if the costs of any of these elements change. If one cost goes up the overall cost of production goes up. If production cost goes up you are forced to find a way to balance you cost to your income. If you don’t quickly correct the problems created by elemental changes your business will go under in a matter of months or even weeks. The size of the elemental change is directly related to how fast you have to react to the change. There are really only two ways to react when cost rises, that is raising your income or reducing your cost. You have two options for raising your income, sell more or raise your cost on you product/service. Well face it if you could sell more products at the price you have it you would already be doing that. Man that is a delicate balance. If you raise your price people can’t afford it so they buy less. So let’s look at reducing your cost. There are proven business processes for reducing cost, but they are usually expensive and it takes a long time to see the return on investment. So businesses are often forced to reduce cost in two extremely negative ways. One option to reduce cost is to skimp on quality hoping to still sell the product without having to “put as much into it.” This option is business suicide. If your customers come to you a few times and get a poor quality product repeatedly they will quickly chose your competitor to get your product. This option is ignorant and should never be used. Your next option to quickly reduce cost is to reduce the quantity of your employees. This means that you lay people off in hopes of reducing your payroll and your payroll taxes. Ouch that doesn’t sound good for the economy!!!! This is the hardest thing for the business owner to do, but they usually switch off their humanity, and then pass the orders down to their lower management to reduce the staffing by a percentage. The lower level management is then forced to pick who they think they can live without. Then the people who are left are then forced to pick up the slack left behind by the newly unemployed. So now not only do you have fewer people employed but you also have people working a lot harder to keep the business afloat. Wow that makes owning a business look less appealing, huh? Well let’s think for a min when you raise the taxes on a business owner or force them to raise minimum wage, these problems are applied to every business in the nation. This causes a spiral of trouble. Think about it. Some people raised their prices and others cut their employees. Now a business owner buying his supplies and raw goods are hit with yet another higher price due to his supplier adjusting to the higher cost of business. Now gosh his cost of business just increased again. So his customer’s cost of business has just increased. It keeps circling. Think about the farmer who has to buy gas for his tractors. When the price of gas goes up he is forced to charge more for his vegetation. The dairies and meat producers buy his vegetation as feed for their livestock. The cost of meat and dairy has now gone up. Then the grocer has to purchase these at a higher price. The grocer has also been forced to raise the pay he has to give the cashier, bag boy, stocker and etc at his store. What does that do to our prices at the store? Well I tell you this, the raise that the bagger got when the minimum wages went up will at best break you even on all of the cost going up, but more than likely it will not get you ahead. Everyone is effected the same way. Now the cost of living has raised and this includes the business owner and dad gum he now has to adjust to this change as well. If you are on the bottom here and you think that you are going to get at THE MAN by the government forcing THE MAN to pay you more look at what it is going to do to yourself. When I look at business I see that THE MAN is only concerned with the bottom dollar. If you lower the business cost the business can charge less which leads to selling more. If a business has more sales he can afford to hire more people. The bottom dollar can be increased by having more people help them produce more product to sell more!!!
Posted on: Thu, 20 Mar 2014 13:36:08 +0000
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