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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#1
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"Poverty cycle" for businesses
We all have heard of "poverty cycle", where people are trapped in low
paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). i |
#2
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"Poverty cycle" for businesses
On Thu, 30 Oct 2014 17:30:22 -0500, Ignoramus28704
wrote: We all have heard of "poverty cycle", where people are trapped in low paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). Interesting thoughts, Ig. And I'm sure there's a lot of truth in it. A lot of small businesses are trapped, or trap themselves, in a "survival" cycle that's hard to escape. I might point out that there is help for those people. I've seen a couple of small businesses helped by the "Geriatric Squad," the retired businessmen and women to volunteer for the SBA-sponsored state small-business help groups. It varies by state, but the one here in NJ has been a big help to a lot of people. They look at your business and tell you what you need to do. They're worth it. They've been there, and they'll give an objective view of what's wrong, or what can be done. Even a successful business can get some free "consultation" from these people. -- Ed Huntrress |
#3
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"Poverty cycle" for businesses
I got got in this cycle...
Profits on apples were declining so I over expanded. We were beating ourselves to death running all over and needed too much help to get it all done. One year, we had a near crop failure, so we cut all expenses to the bone. Didn't have to work near as hard. The surprise: net profit was higher. We now produce 20% of the volume but higher price, and less delivery. AND there's time to go fishing. Karl |
#4
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"Poverty cycle" for businesses
On Fri, 31 Oct 2014 06:31:49 -0500, Karl Townsend
wrote: I got got in this cycle... Profits on apples were declining so I over expanded. We were beating ourselves to death running all over and needed too much help to get it all done. Ugg, suckage. One year, we had a near crop failure, so we cut all expenses to the bone. Didn't have to work near as hard. The surprise: net profit was higher. We now produce 20% of the volume but higher price, and less delivery. Is that when you switched to Honeycrisp, or had you planted/grafted them that way from the start? AND there's time to go fishing. Great! So, did the near crop failure result in the loss of 80% of your trees? From "cut all expenses" to "20% of the volume" is a massive jump. -- The more you know, the less you need. -- Aboriginal Saying |
#5
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"Poverty cycle" for businesses
....
Is that when you switched to Honeycrisp, or had you planted/grafted them that way from the start? AND there's time to go fishing. Great! So, did the near crop failure result in the loss of 80% of your trees? From "cut all expenses" to "20% of the volume" is a massive jump. I was big in Honeycrisp before it was even named. For several years I sold a great deal of budwood to several nurseries. I'm removing blocks due to old age now. The crop loss was just a spring freeze, so no long term damage and I had the entire year to plan my moves. being a grower is a bit like playing cards, you have to learn to play the hand you're dealt. Believe or not, my top three worst years were bumper crops. My two best years were small crops. In other words if you lose money on every bushel, you can't make up for it with volume. BTW, 60 is just a kid, right? karl |
#6
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"Poverty cycle" for businesses
On Fri, 31 Oct 2014 17:42:46 -0500, Karl Townsend
wrote: ... Is that when you switched to Honeycrisp, or had you planted/grafted them that way from the start? AND there's time to go fishing. Great! So, did the near crop failure result in the loss of 80% of your trees? From "cut all expenses" to "20% of the volume" is a massive jump. I was big in Honeycrisp before it was even named. Before it was going for gawdawful prices? For several years I sold a great deal of budwood to several nurseries. I hope you got good money for it. I'm removing blocks due to old age now. Blocks = acreage? The crop loss was just a spring freeze, so no long term damage and I had the entire year to plan my moves. being a grower is a bit like playing cards, you have to learn to play the hand you're dealt. Yeah, farmers have always been players. Believe or not, my top three worst years were bumper crops. My two best years were small crops. In other words if you lose money on every bushel, you can't make up for it with volume. Were the bad years bad because everyone else had a bumper crop, too, and prices dumped? BTW, 60 is just a kid, right? Right. But if I ache like this at 60, I hate to think of living past 70, and don't get me started thinking about 80 or 90... Ayieeeeeeeee! -- The more you know, the less you need. -- Aboriginal Saying |
#7
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"Poverty cycle" for businesses
Karl Townsend wrote: BTW, 60 is just a kid, right? Yes, as long as you believe it. -- Anyone wanting to run for any political office in the US should have to have a DD214, and a honorable discharge. |
#8
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"Poverty cycle" for businesses
On 10/31/2014 6:42 PM, Karl Townsend wrote:
... Is that when you switched to Honeycrisp, or had you planted/grafted them that way from the start? AND there's time to go fishing. Great! So, did the near crop failure result in the loss of 80% of your trees? From "cut all expenses" to "20% of the volume" is a massive jump. I was big in Honeycrisp before it was even named. For several years I sold a great deal of budwood to several nurseries. I'm removing blocks due to old age now. The crop loss was just a spring freeze, so no long term damage and I had the entire year to plan my moves. being a grower is a bit like playing cards, you have to learn to play the hand you're dealt. Believe or not, my top three worst years were bumper crops. My two best years were small crops. In other words if you lose money on every bushel, you can't make up for it with volume. BTW, 60 is just a kid, right? karl It's hard to imagine how you contend with variables that you have absolutely no control over. It's bad enough without complete unknowns, I never want to play Poker with you! |
#9
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"Poverty cycle" for businesses
On 10/30/2014 7:17 PM, Ed Huntress wrote:
On Thu, 30 Oct 2014 17:30:22 -0500, Ignoramus28704 wrote: We all have heard of "poverty cycle", where people are trapped in low paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). Interesting thoughts, Ig. And I'm sure there's a lot of truth in it. A lot of small businesses are trapped, or trap themselves, in a "survival" cycle that's hard to escape. I might point out that there is help for those people. I've seen a couple of small businesses helped by the "Geriatric Squad," the retired businessmen and women to volunteer for the SBA-sponsored state small-business help groups. It varies by state, but the one here in NJ has been a big help to a lot of people. They look at your business and tell you what you need to do. They're worth it. They've been there, and they'll give an objective view of what's wrong, or what can be done. Even a successful business can get some free "consultation" from these people. SCORE https://www.score.org/ They have helps us make decisions many times over the years. |
#10
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"Poverty cycle" for businesses
On Sat, 01 Nov 2014 12:14:57 -0400, Tom Gardner
wrote: On 10/30/2014 7:17 PM, Ed Huntress wrote: On Thu, 30 Oct 2014 17:30:22 -0500, Ignoramus28704 wrote: We all have heard of "poverty cycle", where people are trapped in low paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). Interesting thoughts, Ig. And I'm sure there's a lot of truth in it. A lot of small businesses are trapped, or trap themselves, in a "survival" cycle that's hard to escape. I might point out that there is help for those people. I've seen a couple of small businesses helped by the "Geriatric Squad," the retired businessmen and women to volunteer for the SBA-sponsored state small-business help groups. It varies by state, but the one here in NJ has been a big help to a lot of people. They look at your business and tell you what you need to do. They're worth it. They've been there, and they'll give an objective view of what's wrong, or what can be done. Even a successful business can get some free "consultation" from these people. SCORE https://www.score.org/ They have helps us make decisions many times over the years. Yes! Probably even better. I forgot about them. The SBA may have shifted their volunteer operations to SCORE. They're one of SCORE's sponsors. -- Ed Huntress |
#11
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"Poverty cycle" for businesses
On Thursday, October 30, 2014 6:30:24 PM UTC-4, Ignoramus28704 wrote:
We all have heard of "poverty cycle", where people are trapped in low paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). No. Traditionally, low income workers call to bring union reps to the job site and they rally out in front until the business agrees to big labor terms. (Like what McDonald's and other workers are doing). In Europe, they rally and march several times a year just to keep pressure on businesses to stay on big labor terms. In the US they hardly ever rally or march. Therefore big labor contracts involve lower pay and less benefits. (because there is no pressure on industry to pay higher wages) |
#12
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"Poverty cycle" for businesses
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#13
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"Poverty cycle" for businesses
On Sat, 01 Nov 2014 12:31:44 -0400, Tom Gardner
wrote: someone said: (because there is no pressure on industry to pay higher wages) Not every job can pay rocket scientist wages. Entry level jobs teach people responsibility and skill and other marketable qualities. Meanwhile, people should have paid attention in school and not gotten a trophy for "showing up" at a sports game? $15/hr for a burger flipper is STUPID! It's brilliant! Just think: How many people would put up with $20 hamburgers and $3ea condiments after that goes into effect? People would have to eat healthier foods. Win/win, wot? Why can't people have some responsibility for their lot in life and not just have everything handed to them or have some corrupt organization fight for unearned benefits using extortion, threats and blackmail? We can have that again. All we have to do is vote out the current regime. No, I meant _both_ sides of the aisle. sigh Much more easily said than done. -- The more you know, the less you need. -- Aboriginal Saying |
#14
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"Poverty cycle" for businesses
On Sat, 01 Nov 2014 13:51:37 -0700, Larry Jaques
wrote: On Sat, 01 Nov 2014 12:31:44 -0400, Tom Gardner wrote: someone said: (because there is no pressure on industry to pay higher wages) Not every job can pay rocket scientist wages. Entry level jobs teach people responsibility and skill and other marketable qualities. Meanwhile, people should have paid attention in school and not gotten a trophy for "showing up" at a sports game? $15/hr for a burger flipper is STUPID! It's brilliant! Just think: How many people would put up with $20 hamburgers and $3ea condiments after that goes into effect? People would have to eat healthier foods. Win/win, wot? While you're practicing your arithmetic, you might want some real-world prices to put into your homework. Fast-food restaurants' average labor costs -- total, front- and back-operations -- run around 25% of sales. McD's workers average around $8.50/hour. Figure one manager for eight employees (which is about right), at $11.50/hour, you get an average of $8.83 for all employees. That represents $1.00 of a $3.99 Big Mac. If you raised them all to $15.00/hour, that would add $0.80 to the price of that burger: It would sell for $4.79. That's significant, but before you start thinking "$20 burgers," try running the numbers and get real. -- Ed Huntress |
#15
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"Poverty cycle" for businesses
On Saturday, November 1, 2014 5:44:04 PM UTC-4, Ed Huntress wrote:
d have to eat healthier foods. Win/win, wot? While you're practicing your arithmetic, you might want some real-world prices to put into your homework. Fast-food restaurants' average labor costs -- total, front- and back-operations -- run around 25% of sales. McD's workers average around $8.50/hour. Figure one manager for eight employees (which is about right), at $11.50/hour, you get an average of $8.83 for all employees. That represents $1.00 of a $3.99 Big Mac. If you raised them all to $15.00/hour, that would add $0.80 to the price of that burger: It would sell for $4.79. That's significant, but before you start thinking "$20 burgers," try running the numbers and get real. -- Ed Huntress Are your labor costs including the cost of benefits? And how many businesses are going to raise the cost of the burgers above that $4.79 and blame the extra price increase on the minimum wage increase? Dan |
#16
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"Poverty cycle" for businesses
"Ed Huntress" wrote in message ... On Sat, 01 Nov 2014 13:51:37 -0700, Larry Jaques wrote: On Sat, 01 Nov 2014 12:31:44 -0400, Tom Gardner wrote: someone said: (because there is no pressure on industry to pay higher wages) Not every job can pay rocket scientist wages. Entry level jobs teach people responsibility and skill and other marketable qualities. Meanwhile, people should have paid attention in school and not gotten a trophy for "showing up" at a sports game? $15/hr for a burger flipper is STUPID! It's brilliant! Just think: How many people would put up with $20 hamburgers and $3ea condiments after that goes into effect? People would have to eat healthier foods. Win/win, wot? While you're practicing your arithmetic, you might want some real-world prices to put into your homework. Fast-food restaurants' average labor costs -- total, front- and back-operations -- run around 25% of sales. McD's workers average around $8.50/hour. Figure one manager for eight employees (which is about right), at $11.50/hour, you get an average of $8.83 for all employees. That represents $1.00 of a $3.99 Big Mac. If you raised them all to $15.00/hour, that would add $0.80 to the price of that burger: It would sell for $4.79. That's significant, but before you start thinking "$20 burgers," try running the numbers and get real. -- Ed Huntress Simple solution, reform labor laws. Provide for a yearly COLA tied to the rate of inflation. That would at least slow down the errosion of the buying power for low wage workers. Best Regards Tom. |
#17
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"Poverty cycle" for businesses
On 2014-11-01, Ed Huntress wrote:
On Sat, 01 Nov 2014 13:51:37 -0700, Larry Jaques wrote: On Sat, 01 Nov 2014 12:31:44 -0400, Tom Gardner wrote: someone said: (because there is no pressure on industry to pay higher wages) Not every job can pay rocket scientist wages. Entry level jobs teach people responsibility and skill and other marketable qualities. Meanwhile, people should have paid attention in school and not gotten a trophy for "showing up" at a sports game? $15/hr for a burger flipper is STUPID! It's brilliant! Just think: How many people would put up with $20 hamburgers and $3ea condiments after that goes into effect? People would have to eat healthier foods. Win/win, wot? While you're practicing your arithmetic, you might want some real-world prices to put into your homework. Fast-food restaurants' average labor costs -- total, front- and back-operations -- run around 25% of sales. McD's workers average around $8.50/hour. Figure one manager for eight employees (which is about right), at $11.50/hour, you get an average of $8.83 for all employees. That represents $1.00 of a $3.99 Big Mac. If you raised them all to $15.00/hour, that would add $0.80 to the price of that burger: It would sell for $4.79. That's significant, but before you start thinking "$20 burgers," try running the numbers and get real. Ed, what are the other costs? Costs of burgers, costs of electricity, buns, trash disposal, etc. Right? They are all affected by the wages of people who work there. Most low paid people will be out of a job eventually, due to automation. With high minimum wage, it will happen a little sooner. i |
#18
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"Poverty cycle" for businesses
n 11/1/2014 4:51 PM, Larry Jaques wrote:
It's brilliant! Just think: How many people would put up with $20 hamburgers and $3ea condiments after that goes into effect? People would have to eat healthier foods. Win/win, wot? I wouldn't care if every fast food joint closed! I can't eat any of it. It all makes me sick...literally. Maybe if the burger-flipper jobs didn't exist, people would be forced to be responsible enough to earn a better livelihood. |
#19
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"Poverty cycle" for businesses
"Tom Gardner" wrote in message ... n 11/1/2014 4:51 PM, Larry Jaques wrote: Maybe if the burger-flipper jobs didn't exist, people would be forced to be responsible enough to earn a better livelihood. They could become community organizers which will lead them to bigger and better things. Best Regards Tom. |
#20
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"Poverty cycle" for businesses
On Sat, 01 Nov 2014 12:31:44 -0400, Tom Gardner
wrote: snip $15/hr for a burger flipper is STUPID! Why can't people have some responsibility for their lot in life and not just have everything handed to them or have some corrupt organization fight for unearned benefits using extortion, threats and blackmail? /snip Problem is that one way or the other the individual makes at least that much, as it costs at least this much to live in the US, assuming they are not living in the storm drains and dumpster diving for food. If they are engaged in criminal activity, it is estimated they will cause *at least* 10X damage for the amount of money they "earn." Thus if you have a "car clouter," that steals a package worth 50$ from a car, they will have caused 500$ damage by smashing a window, requiring replacement. This equates to at least 300,000$ or more societal loss. If they are employed in low paying jobs, particularly in high cost areas such as SF or NYC, the taxpayer still takes it in the shorts because of the social safety net costs for SNAP, section 8 housing, Medicare, etc. etc. for which they must pay (now or later). It would appear far more efficient and equitable to require the employers to pay the 15$ (or more) per hour and include these costs in their register prices for their customers, rather than hiding these costs by foisting these off on the general taxpayers, many of whom are not customers. In many cases this will indeed "squeeze" the returns of the corporate employers and their 1% stockholders, but they can afford it, based on their rapidly increasing share of the GDP and wealth. The alternative is the creation/expansion of third world enclaves in the US economy, with all of their problems. Correction of this problem will be expensive, but no where as expensive as not correcting it. -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
#21
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"Poverty cycle" for businesses
On 11/1/2014 5:22 PM, F. George McDuffee wrote:
On Sat, 01 Nov 2014 12:31:44 -0400, Tom Gardner wrote: snip $15/hr for a burger flipper is STUPID! Why can't people have some responsibility for their lot in life and not just have everything handed to them or have some corrupt organization fight for unearned benefits using extortion, threats and blackmail? /snip Problem is that one way or the other the individual makes at least that much, as it costs at least this much to live in the US, assuming they are not living in the storm drains and dumpster diving for food. If they are engaged in criminal activity, it is estimated they will cause *at least* 10X damage for the amount of money they "earn." Thus if you have a "car clouter," that steals a package worth 50$ from a car, they will have caused 500$ damage by smashing a window, requiring replacement. This equates to at least 300,000$ or more societal loss. If they are employed in low paying jobs, particularly in high cost areas such as SF or NYC, the taxpayer still takes it in the shorts because of the social safety net costs for SNAP, section 8 housing, Medicare, etc. etc. for which they must pay (now or later). It would appear far more efficient and equitable to require the employers to pay the 15$ (or more) per hour and include these costs in their register prices for their customers, rather than hiding these costs by foisting these off on the general taxpayers, many of whom are not customers. In many cases this will indeed "squeeze" the returns of the corporate employers and their 1% stockholders, but they can afford it, based on their rapidly increasing share of the GDP and wealth. The alternative is the creation/expansion of third world enclaves in the US economy, with all of their problems. Correction of this problem will be expensive, but no where as expensive as not correcting it. I'm all for the "Star Trek" society! But humanity ain't ready or willing. As long as the degree of greed exists, this is what we have. So, disincentivizing striving to be a 1%er is NOT the way to go...yet. Again, something for free has no value. |
#22
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"Poverty cycle" for businesses
On Saturday, November 1, 2014 5:22:17 PM UTC-4, F. George McDuffee wrote:
l It would appear far more efficient and equitable to require the employers to pay the 15$ (or more) per hour and include these costs in their register prices for their customers, rather than hiding these costs by foisting these off on the general taxpayers, many of whom are not customers. Unka' George I disagree. I think it as better to keep larger numbers of minimum wage workers employed and having the government subsidize them . I see the alternate as increasing the number of minimum wage earners that are unemployed and having the government pay a lot more for assistance to the unemployed. One way the government pays part of the costs. The other way the government pays all of the costs. Also if they are employed , they will not commit as many crimes. Raising the minimum wage will increase the rate at which we automate. Dan |
#24
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"Poverty cycle" for businesses
On 11/2/2014 3:09 AM, John B. Slocomb wrote:
The 120-centimetre (four-foot) tall robot, which moves on rollers and has what looks like a tablet computer strapped to its chest, was unveiled in June by SoftBank president Masayoshi Son. He billed it as an "emotional" robot that understands "70 to 80 percent of spontaneous conversations". Pepper is set to go on the market from February for about $2,000 apiece. One can only speculate when MacDonalds will follow. I was talking to a guy at the food store the other day about just this. He said they would work out great unless management painted them black. I don't believe in racial humor but I laughed out loud. |
#25
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"Poverty cycle" for businesses
"Ignoramus28704" wrote in message
... We all have heard of "poverty cycle", where people are trapped in low paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). I Its certainly a problem in business to decide how you want to work, and how to stay in business doing it. All the business models they teach you in college work... on paper. The thing is unless you are the dominant bullying big player (Wal-Mart, Ford, Bass Pro Shops, Home Depot, etc) in your market segment many of those things are invalidated or distorted by necessity for customer service, conditions of your vendors, selection vs turn rate vs repeat & addon business. Even for the big players there are times when its tough. Look at GM. |
#26
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"Poverty cycle" for businesses
On 10/31/2014 2:19 PM, Bob La Londe wrote:
Its certainly a problem in business to decide how you want to work, and how to stay in business doing it. All the business models they teach you in college work... on paper. The thing is unless you are the dominant bullying big player (Wal-Mart, Ford, Bass Pro Shops, Home Depot, etc) in your market segment many of those things are invalidated or distorted by necessity for customer service, conditions of your vendors, selection vs turn rate vs repeat & addon business. Even for the big players there are times when its tough. Look at GM. Hope for the best but plan for the worst! |
#27
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"Poverty cycle" for businesses
On 2014-10-31, Bob La Londe wrote:
"Ignoramus28704" wrote in message ... We all have heard of "poverty cycle", where people are trapped in low paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). I Its certainly a problem in business to decide how you want to work, and how to stay in business doing it. All the business models they teach you in college work... on paper. The thing is unless you are the dominant bullying big player (Wal-Mart, Ford, Bass Pro Shops, Home Depot, etc) in your market segment many of those things are invalidated or distorted by necessity for customer service, conditions of your vendors, selection vs turn rate vs repeat & addon business. Even for the big players there are times when its tough. Look at GM. Both small and big businesses can be in a business poverty cycle. What determines if the business is in poverty is a non-working business models, low returns, and a lot of distractions for management. GM is a perfect example. i |
#28
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"Poverty cycle" for businesses
On Thursday, October 30, 2014 5:30:24 PM UTC-5, Ignoramus28704 wrote:
We all have heard of "poverty cycle", where people are trapped in low paying jobs, have to work a lot just to make ends meet, have no time for education, start drinking on top of that etc. This poverty cycle is real, and while it is possible to get out of it, it takes a real feat and a superhuman effort. What I want to bring up is that there is an analogy of poverty cycle for businesses. This is includes one-man businesses, just as well as larger companies. The poverty cycle for a company is being trapped in a low return, high hassle business. Similar problems accompany companies in poverty, such lack of funds to improve, lack of time to think about doing things differently, being unable to reject undesirable clients, etc. A big effort needs to be made to stay out of the business poverty cycle. Getting out of it, may be completely impossible (unlike for people). i Iggy, (at the risk of breaking the off-topic cycle) I spent many years in sales and marketing for an auto parts distributor. I visited independent auto parts stores all over Texas and Oklahoma. Many, many of them were Mom and Pop outfits that were in a decades-long rut, making maybe $30K/year net, working 6 days a week, and no vacations. They had a business that was unsellable, and were flat worn out. Those people were trapped in their cycle. Usually the best thing that happened to them was when they finally had that bad month that broke the back of the company. They had to get a job, and they were much happier. I spent a lot of time and effort helping my customers break that cycle and move their business to the point where they could hire some help, take some time off. I know a guy like that right now that let his store (in Dallas) get reduced by the big national chains until he isn't even making a living. He has a good job waiting for him, but he has to unload the inventory first. He calls me once a week to help him find a buyer. And it's *real* cheap right now. Anyone want to buy a complete auto parts store? The other side of that job was working with people looking to buy a business. In so many cases they were planing to quit a job and buy a store with their life savings. After visiting with them, looking at their business plan (if any) and running the numbers, most of the time they would have been "buying a job". Those people I encouraged to re-think the plan. They would have ended up 10 years later trapped in a store, savings gone, and making less money than they did working for The Man. Oh, and no benefits. Math skills: You would e surprised at the number of business owners who do not know the difference between markup and margin. I have taught that subject many, many times. ROI is another eye-opener for most of them. I would tell a store owner "Oil is the most profitable product line in your store". Of course, most hated oil. They made 10% (markup!) on it, where they might make 35-40% on an idler arm. But that idler arm sat on the shelf for a year waiting for a sale, where their entire oil inventory would turn once a month. I still did not convince many people. There are still people doing quite well in that business, but the ones that excel - and escape the trap - are the optimistic, pragmatic entrepreneurs that have fun playing The Game. If the business isn't growing, it ain't fun. But those people, and those skills aren't that common. And people that can maintain all that over decades of time are exceptional. |
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"Poverty cycle" for businesses
On 2014-11-02, Rex wrote:
Iggy, (at the risk of breaking the off-topic cycle) I spent many years in sales and marketing for an auto parts distributor. I visited independent auto parts stores all over Texas and Oklahoma. Many, many of them were Mom and Pop outfits that were in a decades-long rut, making maybe $30K/year net, working 6 days a week, and no vacations. They had a business that was unsellable, and were flat worn out. Those people were trapped in their cycle. Usually the best thing that happened to them was when they finally had that bad month that broke the back of the company. They had to get a job, and they were much happier. I spent a lot of time and effort helping my customers break that cycle and move their business to the point where they could hire some help, take some time off. I know a guy like that right now that let his store (in Dallas) get reduced by the big national chains until he isn't even making a living. He has a good job waiting for him, but he has to unload the inventory first. He calls me once a week to help him find a buyer. And it's *real* cheap right now. Anyone want to buy a complete auto parts store? The other side of that job was working with people looking to buy a business. In so many cases they were planing to quit a job and buy a store with their life savings. After visiting with them, looking at their business plan (if any) and running the numbers, most of the time they would have been "buying a job". Those people I encouraged to re-think the plan. They would have ended up 10 years later trapped in a store, savings gone, and making less money than they did working for The Man. Oh, and no benefits. Math skills: You would e surprised at the number of business owners who do not know the difference between markup and margin. I have taught that subject many, many times. ROI is another eye-opener for most of them. I would tell a store owner "Oil is the most profitable product line in your store". Of course, most hated oil. They made 10% (markup!) on it, where they might make 35-40% on an idler arm. But that idler arm sat on the shelf for a year waiting for a sale, where their entire oil inventory would turn once a month. I still did not convince many people. There are still people doing quite well in that business, but the ones that excel - and escape the trap - are the optimistic, pragmatic entrepreneurs that have fun playing The Game. If the business isn't growing, it ain't fun. But those people, and those skills aren't that common. And people that can maintain all that over decades of time are exceptional. Thank you for a GREAT post, specific and illustrating similar points. Owning a store, with a high cost inefficient business model, is a perfect example of a business trap. In any kind of business involving inventory, it is also not immediately obvious how much money one is making, if you do not properly deal with stale inventory. So there is always a temptation to fool oneself into thinking that one makes more money than is the case in reality. i |
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"Poverty cycle" for businesses
"Ignoramus3507" wrote in message news In any kind of business involving inventory, it is also not immediately obvious how much money one is making, if you do not properly deal with stale inventory. So there is always a temptation to fool oneself into thinking that one makes more money than is the case in reality. i That happened to a lot of used machinery dealers in chicago (lake street) they held onto obsolete machines in the hopes of selling them someday. Even as they were slowley going broke they would not discount anything. Best Regards Tom. |
#31
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"Poverty cycle" for businesses
On Sun, 2 Nov 2014 00:33:08 -0700, "Howard Beal"
wrote: "Ignoramus3507" wrote in message news In any kind of business involving inventory, it is also not immediately obvious how much money one is making, if you do not properly deal with stale inventory. So there is always a temptation to fool oneself into thinking that one makes more money than is the case in reality. i That happened to a lot of used machinery dealers in chicago (lake street) they held onto obsolete machines in the hopes of selling them someday. Even as they were slowley going broke they would not discount anything. Best Regards Tom. I used to work at a garage/used car dealer where the boss was that way. A car would sit on the lot for 5 years and he wouldn't come down fifty bucks. He has old used farm equipment out in the orchard that was the same way. It would rust away before he'd sell it for a dollar less. |
#32
Posted to rec.crafts.metalworking
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"Poverty cycle" for businesses
Howard Beal wrote:
"Ignoramus3507" wrote in message news In any kind of business involving inventory, it is also not immediately obvious how much money one is making, if you do not properly deal with stale inventory. So there is always a temptation to fool oneself into thinking that one makes more money than is the case in reality. i That happened to a lot of used machinery dealers in chicago (lake street) they held onto obsolete machines in the hopes of selling them someday. Even as they were slowley going broke they would not discount anything. Aaron's Machinery on Halsted by Lake may be the last hold out. I'm not sure what justifies a "showroom" of riveting machines, but they're still there as everything next to and across the street has been demolished and turned into ugly condos and stuff like that. Lake street is no longer nothing but chop shops and sketchy businesses. |
#33
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"Poverty cycle" for businesses
"Cydrome Leader" wrote in message ... Howard Beal wrote: "Ignoramus3507" wrote in message news In any kind of business involving inventory, it is also not immediately obvious how much money one is making, if you do not properly deal with stale inventory. So there is always a temptation to fool oneself into thinking that one makes more money than is the case in reality. i That happened to a lot of used machinery dealers in chicago (lake street) they held onto obsolete machines in the hopes of selling them someday. Even as they were slowley going broke they would not discount anything. Aaron's Machinery on Halsted by Lake may be the last hold out. I'm not sure what justifies a "showroom" of riveting machines, but they're still there as everything next to and across the street has been demolished and turned into ugly condos and stuff like that. Lake street is no longer nothing but chop shops and sketchy businesses. Condos bring in a lot more in property taxes, a lot of those old 19th century buildings are obsolete and cannot be updated to meet todays building codes at a reasonable cost. Sad but true. Chicago has been de-industrializing for a long time now as they want a service based ecconomy. Best Regards Tom. |
#34
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"Poverty cycle" for businesses
Ignoramus3507 on Sat, 01 Nov 2014
23:59:57 -0500 typed in rec.crafts.metalworking the following: ROI is another eye-opener for most of them. I would tell a store owner "Oil is the most profitable product line in your store". Of course, most hated oil. They made 10% (markup!) on it, where they might make 35-40% on an idler arm. But that idler arm sat on the shelf for a year waiting for a sale, where their entire oil inventory would turn once a month. I still did not convince many people. There are still people doing quite well in that business, but the ones that excel - and escape the trap - are the optimistic, pragmatic entrepreneurs that have fun playing The Game. If the business isn't growing, it ain't fun. But those people, and those skills aren't that common. And people that can maintain all that over decades of time are exceptional. Thank you for a GREAT post, specific and illustrating similar points. Owning a store, with a high cost inefficient business model, is a perfect example of a business trap. In any kind of business involving inventory, it is also not immediately obvious how much money one is making, if you do not properly deal with stale inventory. So there is always a temptation to fool oneself into thinking that one makes more money than is the case in reality. Reminds me of the story of the High School Reunion. The kid voted "east likely to succeed" shows up in a limo, with a fancy suit, and a pretty wife with real expensive jewelry. So, of course every body wants to know how he's been doing, how did he make so much money. "Oh I buy stuff for a dollar and sell it for two. You know, over time that 1% adds." -- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone." |
#35
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"Poverty cycle" for businesses
On Sat, 01 Nov 2014 23:59:57 -0500, Ignoramus3507
wrote: On 2014-11-02, Rex wrote: Iggy, (at the risk of breaking the off-topic cycle) I spent many years in sales and marketing for an auto parts distributor. I visited independent auto parts stores all over Texas and Oklahoma. Many, many of them were Mom and Pop outfits that were in a decades-long rut, making maybe $30K/year net, working 6 days a week, and no vacations. They had a business that was unsellable, and were flat worn out. Those people were trapped in their cycle. Usually the best thing that happened to them was when they finally had that bad month that broke the back of the company. They had to get a job, and they were much happier. I spent a lot of time and effort helping my customers break that cycle and move their business to the point where they could hire some help, take some time off. I know a guy like that right now that let his store (in Dallas) get reduced by the big national chains until he isn't even making a living. He has a good job waiting for him, but he has to unload the inventory first. He calls me once a week to help him find a buyer. And it's *real* cheap right now. Anyone want to buy a complete auto parts store? The other side of that job was working with people looking to buy a business. In so many cases they were planing to quit a job and buy a store with their life savings. After visiting with them, looking at their business plan (if any) and running the numbers, most of the time they would have been "buying a job". Those people I encouraged to re-think the plan. They would have ended up 10 years later trapped in a store, savings gone, and making less money than they did working for The Man. Oh, and no benefits. Math skills: You would e surprised at the number of business owners who do not know the difference between markup and margin. I have taught that subject many, many times. ROI is another eye-opener for most of them. I would tell a store owner "Oil is the most profitable product line in your store". Of course, most hated oil. They made 10% (markup!) on it, where they might make 35-40% on an idler arm. But that idler arm sat on the shelf for a year waiting for a sale, where their entire oil inventory would turn once a month. I still did not convince many people. There are still people doing quite well in that business, but the ones that excel - and escape the trap - are the optimistic, pragmatic entrepreneurs that have fun playing The Game. If the business isn't growing, it ain't fun. But those people, and those skills aren't that common. And people that can maintain all that over decades of time are exceptional. Thank you for a GREAT post, specific and illustrating similar points. Owning a store, with a high cost inefficient business model, is a perfect example of a business trap. In any kind of business involving inventory, it is also not immediately obvious how much money one is making, if you do not properly deal with stale inventory. So there is always a temptation to fool oneself into thinking that one makes more money than is the case in reality. i Particularly in the computer business, valuing inventory over a month old at cost is being delusional. (which is why I don't inventory ANYTHING anymore) If you buy 2 of something and only sell one, you are farther ahead to just expense it right away, and if you get lucky enough to sell it and make some money, claim the whole income as profit. Otherwise you are continually trying to re-evaluate inventory and take write-downs on the inventory at year end. I have pretty good suppliers, so really no reason for me to inventory anything. My main customers have a spare power supply on the shelf and a spare hard drive, so they are seldom down waiting for parts. (because the last time they needed one, I bought 2, and they paid for them both. Insurance. (main customer is an insurance office) |
#36
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"Poverty cycle" for businesses
On Sat, 1 Nov 2014 19:03:11 -0700 (PDT), Rex
wrote: I spent many years in sales and marketing for an auto parts distributor. I visited independent auto parts stores all over Texas and Oklahoma. Many, many of them were Mom and Pop outfits that were in a decades-long rut, making maybe $30K/year net, working 6 days a week, and no vacations. They had a business that was unsellable, and were flat worn out. Those people were trapped in their cycle. Usually the best thing that happened to them was when they finally had that bad month that broke the back of the company. They had to get a job, and they were much happier. I spent a lot of time and effort helping my customers break that cycle and move their business to the point where they could hire some help, take some time off. I know a guy like that right now that let his store (in Dallas) get reduced by the big national chains until he isn't even making a living. He has a good job waiting for him, but he has to unload the inventory first. He calls me once a week to help him find a buyer. And it's *real* cheap right now. Anyone want to buy a complete auto parts store? The other side of that job was working with people looking to buy a business. In so many cases they were planing to quit a job and buy a store with their life savings. After visiting with them, looking at their business plan (if any) and running the numbers, most of the time they would have been "buying a job". Those people I encouraged to re-think the plan. They would have ended up 10 years later trapped in a store, savings gone, and making less money than they did working for The Man. Oh, and no benefits. Math skills: You would e surprised at the number of business owners who do not know the difference between markup and margin. I have taught that subject many, many times. ROI is another eye-opener for most of them. I would tell a store owner "Oil is the most profitable product line in your store". Of course, most hated oil. They made 10% (markup!) on it, where they might make 35-40% on an idler arm. But that idler arm sat on the shelf for a year waiting for a sale, where their entire oil inventory would turn once a month. I still did not convince many people. There are still people doing quite well in that business, but the ones that excel - and escape the trap - are the optimistic, pragmatic entrepreneurs that have fun playing The Game. If the business isn't growing, it ain't fun. But those people, and those skills aren't that common. And people that can maintain all that over decades of time are exceptional. I owned a service station in the 80s. Every kid with a new car had to have a custom stereo. Most were self installed. I made more profit on fuses and keys than gas and oil. No one knew what a fuse should cost. Everyone knew where the cheapest gas was. Another high profit line was specialty fasteners (think door panel Xmas trees). We were charging the city $5 for the 10 minutes it took to remove rear door handles and window cranks on police squad cars. Niche markets are almost always the most profitable; and that niche is usually hard dirty work no one else wants to do...or has the expertise to do. |
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