This began as a post about where I was with our little homeschooling adventure, but I rethought it. Today is my birthday and seems to be a better day than most to assess where I am.
A year ago I was running my shop, ferrying my kids to lacrosse and Scouts and church and horseback riding and school, and feeling buried in the process. I loved my shop so much, my customers and employees, I loved the process of considering what lines to bring in or drop, anticipating what my customers would love or loathe. I loved providing a place of community for them, watching them gain skills and confidence, and grow friendships around the big table. It was very rewarding in so many ways.
I loved seeing my kids grow, too, but somehow they could be put off in favor of the shop. That sounds terrible but it is true! Our house continued to grow messier and messier while I focused more energy on my business. My friendships outside of the shop suffered greatly, too, something I am still very sad about. I don't know how to recover from that.
But during this last year I realized how very busy I was, with things outside of my home. Ecclesiastes tells us that everything has a season. I was running away from my season of child-rearing and home-making. Maybe that is too strong. But the shop had become my catch-all excuse for leaving things undone at home and anywhere else.
Moms who work, my hat is off to you. I don't know how you do it. But that is another thought for another time, or post.
The last year saw so many incredible blessings. We had some fantastic vacations (and here and here), genuinely wonderful times to relax and enjoy each other. Somehow my husband's business has continued to prosper in spite of the economy and increased government interference. We've gotten to help start a new church and form new friendships there. Of course, the biggest event in my life this year was selling my shop, a remarkably seamless transaction with a dear friend and excellent businesswoman.
So this year finds me starting new adventures: I am homeschooling our youngest child, and I bought a horse for myself back in July. My girls and I are looking forward to competing more as the year goes by. I am paying far, far more attention to what my other three children are studying and reading at school, unfortunately for their teachers! My house needs a lot of work; nearly three years of benign neglect doesn't sound like much but with this many people the clutter and mess can quickly be overwhelming. I even find myself sitting down at the piano and playing more, something I had all but stopped a year ago.
As I write this, I have to stop and observe what an extraordinary man my husband is. He is steady as a rock, and not only tolerates every wild hare I have--he encourages them! "Enable" is probably a better description. He offers advice and support, and even when things don't go so well he is always my biggest cheerleader. I am so lucky to have him.
So there we have it: a quick take on my life over the last year. I would say that this looks like one very very good year. I wonder how the next year will pass, what in the world God has in store for my family. Happy Birthday to Me!
Showing posts with label shop. Show all posts
Showing posts with label shop. Show all posts
Monday, August 29, 2011
Monday, June 13, 2011
A Shop-keeper's-eye View of Regulation
A couple of days ago I read this very interesting post by Amity Shlaes, author of The Forgotten Man. The post is here, so go read it.
Fascinating reading, and so are the comments. A few cast doubt on the idea that government can interfere with a small business so much that it becomes a drag on the economy. I'm pretty sure they have absolutely no idea what they're talking about!
When I started my business I would have never, ever believed how much the government would have their hands in my little business. My shop was the simplest possible business model: buy things at one price, sell them at a higher price. That's it. So here's what the government, from local all the way to the big Federal Gum-mint, made me do:
I set up as an LLC, which involved a trip to the lawyer and then submitting forms to the Secretary of State in my state. (1) I had to also get a sales tax number from the state (2) which allowed me to collect sales tax. That one took a while. I submitted a different form to the IRS to get my Federal Taxpayer ID number, sort of like a SSN for corporations. (3) Not so bad.
So I needed to open an actual shop. The space had to be remodeled, and the city had to sign off on the plans. (4) And of course I needed a sign, and so that plan also had to be submitted to the city. (5) I also needed to get an occupancy permit, the rough equivalent of a business license, from the city. (6)
Six things, so far. Not so bad. But wait! I needed employees, because I had no plans for doing this on my own. I had to get a different number from the Department of Labor (7) and then fill out application forms for Unemployment Insurance Payments to start. (8) I also had the forms you are familiar with if you've ever had employment: the Federal form with all the basic info so you can get paid (9) and a state form, again for unemployment insurance (10).
Okay, up to ten, and I haven't opened my doors yet. Don't forget...one misstep opens the door for the government to poke their noses around in ALL my business! A tightrope, for sure. But let's get started, and sell something!
Once a month, I file and pay my state sales tax (11). Once a quarter, I file and pay the income tax for my employees--state (12) and federal (13). Oh, wait, my employees didn't work enough to pay federal income tax. But there was STILL a form to say that they didn't make enough, so I didn't owe (14). Social Security withholding was a different form and a different method of payment (15). And once a year I have to file a property tax statement and pay property taxes on my inventory! (16) Did you know that businesses have to pay a tax on their inventory at December 31?! Yeah, me neither. Also at the end of the year are my employees' 1099's (17) and my corporate tax return (18).
While I'm open, the Fire Marshall can come visit and tell me to cover up my back door exit sign. (No joke, that happened one year.) (19) The code enforcers can stop by and tell me to raise or lower my sign and take signs out of my window. (20) The Department of Labor will stop and inspect the back storage closet to see that I've posted the mandatory "Know Your Rights" poster for my employees. (21)
Craziest of all, one month after I sold the shop, the new owner received a notice from the county of an audit that they would perform as of 12/31/10. WHAT?! They sent a long list of paperwork they needed for the audit, including some information from my personal tax return. (22) We got through it but what a pain!
Many, many of these reporting requirements are addressed by having a reliable accountant, which I did. But that has a cost, the cost of compliance with tax regulation. And one thing to point out is that I had only part-time employees. Were I to have full-time employees, we would have to worry about health care in the next couple of years. I have to say there would be TREMENDOUS incentive to cut everyone back to part-time to avoid the whole issue!
I'm not arguing for or against any of these requirements (well, maybe a little), but there are just so many! It's a Byzantine process, trying to satisfy each one of the government entities that believe they deserve a piece of my business. How can anyone doubt that these requirements are a drag on small businesses, and that each layer is another business or two or three that doesn't form, where the owner just decides it's not worth it.
So, is all of this regulation worth keeping some great ideas out of the marketplace? What have we missed out on?
Fascinating reading, and so are the comments. A few cast doubt on the idea that government can interfere with a small business so much that it becomes a drag on the economy. I'm pretty sure they have absolutely no idea what they're talking about!
When I started my business I would have never, ever believed how much the government would have their hands in my little business. My shop was the simplest possible business model: buy things at one price, sell them at a higher price. That's it. So here's what the government, from local all the way to the big Federal Gum-mint, made me do:
I set up as an LLC, which involved a trip to the lawyer and then submitting forms to the Secretary of State in my state. (1) I had to also get a sales tax number from the state (2) which allowed me to collect sales tax. That one took a while. I submitted a different form to the IRS to get my Federal Taxpayer ID number, sort of like a SSN for corporations. (3) Not so bad.
So I needed to open an actual shop. The space had to be remodeled, and the city had to sign off on the plans. (4) And of course I needed a sign, and so that plan also had to be submitted to the city. (5) I also needed to get an occupancy permit, the rough equivalent of a business license, from the city. (6)
Six things, so far. Not so bad. But wait! I needed employees, because I had no plans for doing this on my own. I had to get a different number from the Department of Labor (7) and then fill out application forms for Unemployment Insurance Payments to start. (8) I also had the forms you are familiar with if you've ever had employment: the Federal form with all the basic info so you can get paid (9) and a state form, again for unemployment insurance (10).
Okay, up to ten, and I haven't opened my doors yet. Don't forget...one misstep opens the door for the government to poke their noses around in ALL my business! A tightrope, for sure. But let's get started, and sell something!
Once a month, I file and pay my state sales tax (11). Once a quarter, I file and pay the income tax for my employees--state (12) and federal (13). Oh, wait, my employees didn't work enough to pay federal income tax. But there was STILL a form to say that they didn't make enough, so I didn't owe (14). Social Security withholding was a different form and a different method of payment (15). And once a year I have to file a property tax statement and pay property taxes on my inventory! (16) Did you know that businesses have to pay a tax on their inventory at December 31?! Yeah, me neither. Also at the end of the year are my employees' 1099's (17) and my corporate tax return (18).
While I'm open, the Fire Marshall can come visit and tell me to cover up my back door exit sign. (No joke, that happened one year.) (19) The code enforcers can stop by and tell me to raise or lower my sign and take signs out of my window. (20) The Department of Labor will stop and inspect the back storage closet to see that I've posted the mandatory "Know Your Rights" poster for my employees. (21)
Craziest of all, one month after I sold the shop, the new owner received a notice from the county of an audit that they would perform as of 12/31/10. WHAT?! They sent a long list of paperwork they needed for the audit, including some information from my personal tax return. (22) We got through it but what a pain!
Many, many of these reporting requirements are addressed by having a reliable accountant, which I did. But that has a cost, the cost of compliance with tax regulation. And one thing to point out is that I had only part-time employees. Were I to have full-time employees, we would have to worry about health care in the next couple of years. I have to say there would be TREMENDOUS incentive to cut everyone back to part-time to avoid the whole issue!
I'm not arguing for or against any of these requirements (well, maybe a little), but there are just so many! It's a Byzantine process, trying to satisfy each one of the government entities that believe they deserve a piece of my business. How can anyone doubt that these requirements are a drag on small businesses, and that each layer is another business or two or three that doesn't form, where the owner just decides it's not worth it.
So, is all of this regulation worth keeping some great ideas out of the marketplace? What have we missed out on?
Friday, April 22, 2011
Oh my goodness, I've been quiet!
Too silent here. This time, it's because things were brewing that I couldn't talk about, and those things consumed all of my mind. Whenever I sat down to write, I could only think about the "verboten" topic. I even quit cooking with French Fridays with Dorie. (Wow! My family is missing that one.)
But here's the news: I sold my shop. My precious sweet little yarn shop. I am so proud of it. And I am so relieved that I'm no longer the owner. Two and a half years ago I had an idea, really just a kernel of an idea. I was in graduate school in a competitive program, and was realizing that it wasn't for me. As a knitter of about eighteen months, I thought I'd like to spend my days surrounded by beautiful color and fun customers. So, after getting my FIRST EVER 4.0, I quit to open my shop. Talk about turning on a dime. My husband is a wonderful, patient man.
Fast forward two years. (Really, super fast fast fast forward.) My children are two years older, and we have found that we looooooove to travel. They are also so busy, with track and lacrosse teams, theatre musicals, horses, horses, horses, and homework. They weren't like this two years ago! And my sweet little shop? Busy as a beehive, thankfully! I had wonderful employees (including my mom!), but also hundreds of customers who truly felt invested in my little shop. If you've never been in a yarn shop, you should venture in sometime. It really can be a little community. I've been blessed to celebrate so many births and anticipated children and grandchildren, as well as friends who received the fruits of my customers' labors. I've also shared the lows, the illnesses and deaths, and have cried with my friends. What a blessing to be allowed to share all that life has to offer.
If you have ever received a handmade gift, I am here to tell you that the maker thought and considered, prayed and labored, over your gift. I saw it.
But one thing that I didn't count on was that, as the shop grew more successful, it would require even more of my attention, not less. I had the crazy idea that it would start to run itself. WRONG. And as my fifth "baby" demanded more attention, my home was faltering. Not just the messes. The going on field trips, the planning parties, the inviting friends home, just on the spur of the moment. Every single thing was planned to the minute, with no room for a sick day or even a "sick and tired" day. Couple that with the realization that my sweet oldest boy had turned twelve, two-thirds of the way to college, and something had to give. Of course that was my shop.
I believed when I opened the shop that I was following a path that the Lord had laid out for me. So when, after much prayer and deliberation, I decided I had to exit the shop, I expected that I would see some sort of path. It happened so much faster than I expected! The first day I told my employees, one of them called and offered to buy the shop. Just like that. I almost dropped the phone when she called me. Since then, we've had some little roadblocks, with timing and such, but overall we have had such a good time sharing this experience. The attorney handling the sale just shook his head as he watched us agree to a price. It was that easy. She is thrilled, and so am I.
So, the blog has been quiet. But now it isn't. I think I'll try to be more open, and I have some ideas moving forward. I wonder what it will be like to be "just" a mom again, for the first time in two-and-a-half years. I'm a little nervous. But I also look forward to the adventures the kids and I will have this summer, and beyond. And I think I'm looking forward to cleaning the laundry room. I know everyone else is looking forward to that. And a horse in my future? Mmmm, maybe?
But here's the news: I sold my shop. My precious sweet little yarn shop. I am so proud of it. And I am so relieved that I'm no longer the owner. Two and a half years ago I had an idea, really just a kernel of an idea. I was in graduate school in a competitive program, and was realizing that it wasn't for me. As a knitter of about eighteen months, I thought I'd like to spend my days surrounded by beautiful color and fun customers. So, after getting my FIRST EVER 4.0, I quit to open my shop. Talk about turning on a dime. My husband is a wonderful, patient man.
Fast forward two years. (Really, super fast fast fast forward.) My children are two years older, and we have found that we looooooove to travel. They are also so busy, with track and lacrosse teams, theatre musicals, horses, horses, horses, and homework. They weren't like this two years ago! And my sweet little shop? Busy as a beehive, thankfully! I had wonderful employees (including my mom!), but also hundreds of customers who truly felt invested in my little shop. If you've never been in a yarn shop, you should venture in sometime. It really can be a little community. I've been blessed to celebrate so many births and anticipated children and grandchildren, as well as friends who received the fruits of my customers' labors. I've also shared the lows, the illnesses and deaths, and have cried with my friends. What a blessing to be allowed to share all that life has to offer.
If you have ever received a handmade gift, I am here to tell you that the maker thought and considered, prayed and labored, over your gift. I saw it.
But one thing that I didn't count on was that, as the shop grew more successful, it would require even more of my attention, not less. I had the crazy idea that it would start to run itself. WRONG. And as my fifth "baby" demanded more attention, my home was faltering. Not just the messes. The going on field trips, the planning parties, the inviting friends home, just on the spur of the moment. Every single thing was planned to the minute, with no room for a sick day or even a "sick and tired" day. Couple that with the realization that my sweet oldest boy had turned twelve, two-thirds of the way to college, and something had to give. Of course that was my shop.
I believed when I opened the shop that I was following a path that the Lord had laid out for me. So when, after much prayer and deliberation, I decided I had to exit the shop, I expected that I would see some sort of path. It happened so much faster than I expected! The first day I told my employees, one of them called and offered to buy the shop. Just like that. I almost dropped the phone when she called me. Since then, we've had some little roadblocks, with timing and such, but overall we have had such a good time sharing this experience. The attorney handling the sale just shook his head as he watched us agree to a price. It was that easy. She is thrilled, and so am I.
So, the blog has been quiet. But now it isn't. I think I'll try to be more open, and I have some ideas moving forward. I wonder what it will be like to be "just" a mom again, for the first time in two-and-a-half years. I'm a little nervous. But I also look forward to the adventures the kids and I will have this summer, and beyond. And I think I'm looking forward to cleaning the laundry room. I know everyone else is looking forward to that. And a horse in my future? Mmmm, maybe?
Sunday, January 9, 2011
Revisiting "Open to Buy"
I don't "shop blog" much. Oh, the stories I could tell--maybe someday. But a little while back I blogged about a way of managing my buying, called "Open to Buy." I wanted to offer a little insight into how it is working out.
Wow...a budget! It was tough to get used to having to pick and choose what to purchase. There are tons of nice items to choose from, many would actually sell and more that would be nice to have in the shop. But OtB forced me to prioritize--what do I have to keep on hand to keep people coming back? What can I push to the next month? Have I exhausted the demand for that item? Hard questions sometimes.
We made it through the fall and Christmas rush very well, though. I over-spent, by just a little, a couple of months, but according to the OtB system you need to do that as you head into your busier months. Then you pull way back as you head into your down season, so that your inventory leads your sales more closely. I am thrilled to say that we have come into the new year in a much healthier cash position than we had six months ago!
Right now I'm assessing where we go in the waning months of winter and into our down season, late spring and summer. I have time to add some fun things for winter yet, but I'm also keeping an eye to what I need to pick up for spring. Unlike last year, I've given myself a framework to make decisions from. It really limits the shop in some ways, but it ensures that we'll be around for busy seasons yet to come.
One additional good point is that even when I've taken some riskier positions in inventory, I've been able to manage that risk by knowing how the position compares to the overall sales of the shop. I've taken more calculated risks this year. That includes holding sales--I've known how a sale is going to affect my inventory levels and thus my following month's purchasing. Very interesting.
Enough shop talk...time to gather the kids and head to church. And if you ever want to visit a really cute yarn shop in Peachtree City, Georgia, you can google just that and come and see us!
Wow...a budget! It was tough to get used to having to pick and choose what to purchase. There are tons of nice items to choose from, many would actually sell and more that would be nice to have in the shop. But OtB forced me to prioritize--what do I have to keep on hand to keep people coming back? What can I push to the next month? Have I exhausted the demand for that item? Hard questions sometimes.
We made it through the fall and Christmas rush very well, though. I over-spent, by just a little, a couple of months, but according to the OtB system you need to do that as you head into your busier months. Then you pull way back as you head into your down season, so that your inventory leads your sales more closely. I am thrilled to say that we have come into the new year in a much healthier cash position than we had six months ago!
Right now I'm assessing where we go in the waning months of winter and into our down season, late spring and summer. I have time to add some fun things for winter yet, but I'm also keeping an eye to what I need to pick up for spring. Unlike last year, I've given myself a framework to make decisions from. It really limits the shop in some ways, but it ensures that we'll be around for busy seasons yet to come.
One additional good point is that even when I've taken some riskier positions in inventory, I've been able to manage that risk by knowing how the position compares to the overall sales of the shop. I've taken more calculated risks this year. That includes holding sales--I've known how a sale is going to affect my inventory levels and thus my following month's purchasing. Very interesting.
Enough shop talk...time to gather the kids and head to church. And if you ever want to visit a really cute yarn shop in Peachtree City, Georgia, you can google just that and come and see us!
Friday, October 15, 2010
Open to Buy
Part of the idea of my blog is to give a view from behind the counter at my shop. Here goes...
Did you know it's possible for a business to grow itself out of business? Actually it is, and there's a formula in one of my corporate finance books around here. The idea is that, in funding your future activity with current dollars, your future sales are so big that you end up going bankrupt even as you have amazing cashflow.
That's not quite my problem, but I've been thinking about that as I deal with my current issue. In a retail shop, the only source of revenue is the inventory. You can't make money if it isn't in the shop to sell, flat out. My method of buying was, I thought, kind of careful, replacing only what I liked as it sold, increasing inventory judiciously. But I didn't really link it with revenue or actual sales. Part of that was because, when I opened, I had held back a portion of my initial investment to increase inventory later, as I got to know my customer base. Good idea, but it made me feel like I had money burning a hole in my pocket!
Fast-forward to this summer, as I'm doing my summer/fall buying in preparation for the fall high season. No "extra" money this year. In addition to replacing my low stock in preparation for fall, I also expanded into several new lines, to the tune of several thousand dollars. It's not as stupid as it sounds, because I did it in several baby steps: visits with reps during April, the trade show in June, and rebalancing as I assessed my stock. (It was kind of stupid.) BUT I hadn't planned on terrible cash flow in May. May was awful, and I was unprepared for it. And then June wasn't much better. So, I increased inventory while my cash flow was through the floor. This is bad news!!
Enter Open to Buy. This is an inventory system based on cash flow and expected sales, a way to put yourself on a diet. The idea is this: at the end of the month, total your sales. Take 50% of that, and that is how much you buy the next month. Period, with a couple of caveats. For instance, consider your sales trends. Low expected sales? Lay off! Don't buy as much. Only buy in anticipation of a good month. So for me, I should let my inventory dwindle a little during April-July, and then slam the shop full by October. The method of buying keeps you from having a full shop during months you just know you won't sell anything!
So I had way way WAY overbought this summer. And my cash flow was terrible, negative actually. I was glad to be able to give an influx of cash, drawing on my own personal credit line. (Writing that loan check to the shop was probably my all-time low so far with this business.)
I implemented Open to Buy in August. Ugh. I overbought tremendously, but mostly because July was such a low-sales month. September was better, but again a little over the line, because of deliveries I had had scheduled and just couldn't give up. Now, I'm only half-way through October and I've hit my limit! I don't quite know what to do...I'm out of needles to go with my yarn. This is after TWO purchases of needles this month.
A tightly run shop requires more than a good eye and a great passion for my customers. This has been a hard lesson to learn, even though it seems like a retired actuary should have this part down cold. But--ouch! It is a tightrope. I don't like seeing some of these empty shelves, but it is better than an empty bank account.
Did you know it's possible for a business to grow itself out of business? Actually it is, and there's a formula in one of my corporate finance books around here. The idea is that, in funding your future activity with current dollars, your future sales are so big that you end up going bankrupt even as you have amazing cashflow.
That's not quite my problem, but I've been thinking about that as I deal with my current issue. In a retail shop, the only source of revenue is the inventory. You can't make money if it isn't in the shop to sell, flat out. My method of buying was, I thought, kind of careful, replacing only what I liked as it sold, increasing inventory judiciously. But I didn't really link it with revenue or actual sales. Part of that was because, when I opened, I had held back a portion of my initial investment to increase inventory later, as I got to know my customer base. Good idea, but it made me feel like I had money burning a hole in my pocket!
Fast-forward to this summer, as I'm doing my summer/fall buying in preparation for the fall high season. No "extra" money this year. In addition to replacing my low stock in preparation for fall, I also expanded into several new lines, to the tune of several thousand dollars. It's not as stupid as it sounds, because I did it in several baby steps: visits with reps during April, the trade show in June, and rebalancing as I assessed my stock. (It was kind of stupid.) BUT I hadn't planned on terrible cash flow in May. May was awful, and I was unprepared for it. And then June wasn't much better. So, I increased inventory while my cash flow was through the floor. This is bad news!!
Enter Open to Buy. This is an inventory system based on cash flow and expected sales, a way to put yourself on a diet. The idea is this: at the end of the month, total your sales. Take 50% of that, and that is how much you buy the next month. Period, with a couple of caveats. For instance, consider your sales trends. Low expected sales? Lay off! Don't buy as much. Only buy in anticipation of a good month. So for me, I should let my inventory dwindle a little during April-July, and then slam the shop full by October. The method of buying keeps you from having a full shop during months you just know you won't sell anything!
So I had way way WAY overbought this summer. And my cash flow was terrible, negative actually. I was glad to be able to give an influx of cash, drawing on my own personal credit line. (Writing that loan check to the shop was probably my all-time low so far with this business.)
I implemented Open to Buy in August. Ugh. I overbought tremendously, but mostly because July was such a low-sales month. September was better, but again a little over the line, because of deliveries I had had scheduled and just couldn't give up. Now, I'm only half-way through October and I've hit my limit! I don't quite know what to do...I'm out of needles to go with my yarn. This is after TWO purchases of needles this month.
A tightly run shop requires more than a good eye and a great passion for my customers. This has been a hard lesson to learn, even though it seems like a retired actuary should have this part down cold. But--ouch! It is a tightrope. I don't like seeing some of these empty shelves, but it is better than an empty bank account.
Monday, October 11, 2010
How to Create a Job
It occurs to me that I have more first-hand experience creating jobs than the President. There seems to be some confusion about where jobs come from. I would like to explain where private-sector jobs come from.
First, where they DON'T come from: piles of money just sitting around with nothing to do. Unselfish rich people do not look at the poor unwashed, have mercy, and throw money at them.
Now, where they do come from: A person has an idea for making more money, some sort of good or service they want to provide. The sole purpose may not be to make money, but making money--really, creating WEALTH--where there was none previously is the basic building block. Now, the person may be able to execute the idea all by himself, for example a shopkeeper who works alone in the shop all day long. But what if the shop gets so busy that customers leave, unhappy that the shopkeeper can't wait on him? Or what if the shop grows because it is so popular and the shopkeeper is doing a great job? Both are good problems to have! Eventually, the shopkeeper may realize that he needs to hire someone so that his vision of his shop can be realized. The hiring of an assistant will help the shop to sell even more, thereby increasing revenue, or it may free the shopkeeper to have more time off or to start a new venture.
That's the important point right there--the hiring of an employee makes sense ONLY if the shopkeeper realizes a benefit. Actually, it is the only reason to hire an employee, ever. And if an employee ceases to return a worthwhile benefit to the company, then the job should not exist. This isn't because employers are mean; it's because eventually an employee like this, or many, will kill the company.
Since creating a job means hiring an actual person and forming a relationship with a person, most employers take this very seriously. They realize they are dealing with another person's livelihood, security and stability. So unless they are very sure of future demand for their good or service, an employer won't hire someone. Everyone else may work a little harder, even the sole shopkeeper who works longer hours.
In my case, I decided that I could not open my shop unless I had some part-time help. So employing people was part of my model all along. Creating a couple of jobs was required if I was going to even open the shop. But I didn't do it out of the sheer goodness of my heart. It was to fulfill the ultimate goal of making enough money to pay the kids' tuition. I wanted to make a profit. I haven't hired more people, as fun as it would be, because that gets in the way of making more profit.
So the next time you hear any government official or journalist discussing the jobs that aren't being created, I hope you think about this post. Jobs don't just appear because someone is feeling generous. Those are the worst kind of "make-work" jobs. REAL jobs create real wealth, both for the employee and the employer. They are the only ones that are a true benefit to the economy, and an employer can't be bullied into creating them. They only come from hope and determination and an atmosphere willing to recognize and reward risk.
First, where they DON'T come from: piles of money just sitting around with nothing to do. Unselfish rich people do not look at the poor unwashed, have mercy, and throw money at them.
Now, where they do come from: A person has an idea for making more money, some sort of good or service they want to provide. The sole purpose may not be to make money, but making money--really, creating WEALTH--where there was none previously is the basic building block. Now, the person may be able to execute the idea all by himself, for example a shopkeeper who works alone in the shop all day long. But what if the shop gets so busy that customers leave, unhappy that the shopkeeper can't wait on him? Or what if the shop grows because it is so popular and the shopkeeper is doing a great job? Both are good problems to have! Eventually, the shopkeeper may realize that he needs to hire someone so that his vision of his shop can be realized. The hiring of an assistant will help the shop to sell even more, thereby increasing revenue, or it may free the shopkeeper to have more time off or to start a new venture.
That's the important point right there--the hiring of an employee makes sense ONLY if the shopkeeper realizes a benefit. Actually, it is the only reason to hire an employee, ever. And if an employee ceases to return a worthwhile benefit to the company, then the job should not exist. This isn't because employers are mean; it's because eventually an employee like this, or many, will kill the company.
Since creating a job means hiring an actual person and forming a relationship with a person, most employers take this very seriously. They realize they are dealing with another person's livelihood, security and stability. So unless they are very sure of future demand for their good or service, an employer won't hire someone. Everyone else may work a little harder, even the sole shopkeeper who works longer hours.
In my case, I decided that I could not open my shop unless I had some part-time help. So employing people was part of my model all along. Creating a couple of jobs was required if I was going to even open the shop. But I didn't do it out of the sheer goodness of my heart. It was to fulfill the ultimate goal of making enough money to pay the kids' tuition. I wanted to make a profit. I haven't hired more people, as fun as it would be, because that gets in the way of making more profit.
So the next time you hear any government official or journalist discussing the jobs that aren't being created, I hope you think about this post. Jobs don't just appear because someone is feeling generous. Those are the worst kind of "make-work" jobs. REAL jobs create real wealth, both for the employee and the employer. They are the only ones that are a true benefit to the economy, and an employer can't be bullied into creating them. They only come from hope and determination and an atmosphere willing to recognize and reward risk.
Wednesday, August 25, 2010
Busy-ness
So I'm trying to decide how busy is too busy. We've had exactly four piano practices in two weeks (among four kids...do the math), and I don't know how to pack it in. Matching socks are nonexistent in my house, and the last three days at least four pieces of clothing from the kids have come directly from the dryer. My husband and I are trying to carve out time to just talk to each other without my falling asleep right there. That's not a commentary on him--I'm just exhausted. We get up at 5:45 to get moving, have a cup of coffee before the kids are up and trying to find their clothes.
We have a pony 20 minutes away who needs to be ridden at least four times a week. We have three lunches that must be made. Two loads of laundry a day to keep up. (Where do those clothes come from?) One business that needs to be run well. You can't keep great employees running a shop half-way! That doesn't count my husband's business which is actually how we eat, sleep, swim, vacation, school, everything our children and our life. So my shop is only for me. And possibly my shoes...the shoe money.
I feel like I'm not running my true calling, my home, to its best. But I stayed home for eight years with no outside occupation. And when I did that, I went NUTS. Literally. I have the doctor bills to prove it.
So now I'm wondering...what price sanity? What about the balance between my sanity and my home's? Maybe this is just the same boring old balance blah blah blah. But it is weighing on me. The shop may be coming out of the slump of summer. But will it be enough?
Wednesday, April 1, 2009
Checking in
Just a quick post...I miss blogging, and there is so much going on, and I'd like to share a little of what it's like to open up a business, too. But this will have to suffice for now.
The shop has been open for ten days now, and it is rolling along nicely. I'm starting to sell out of a few things, and so one of my worries is how to handle re-ordering, and how to not spend too much!
I hear "We're so glad you are here!" at least three times a day. That is good for the old ego but at some point you can't coast on that. Dealing with technology has been a major pain, even with my vaunted Macs. (Can you believe TWO defective mouses...er, mice?)
Another surprising pain is display space...how to balance spending money on lovely store fixtures with needing to not spend too much? Merchandising is key to retail, and it is fun, but biting off a $500 $1000 expense when I'm just starting out is a big decision. I spent several thousand on fixtures and improvements, but it wasn't quite enough. Guess I'll be looking for some more today.
The best part? Just chatting and getting to know my customers! And seeing my customers meet one another in the store...yesterday at three different times I had groups just sitting and chatting (and they did eventually buy, which is important). But I really want my shop to be a hub, a gathering place, and I think that it is moving in that direction!
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