Business topic that i would appreciate some hearing your views on.

Rob Keeble

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I am doing some research for myself which is the general motivation for this thread but i would like to ask for input here from anyone who works for a privately owned company typically with a single owner and has done so for most of their life. They may have worked at several different small businesses not just one.

I would like to hear thoughts on how you would feel were the owner of the business to come along one day and offer you shares in the business.

I dont wish to lead your thoughts so i would like to hear how you would interpret this and what you would see the implications being to you in the business in the short term and long term.

Then if that same owner were to offer you a profit sharing scheme as an alternative to the shares what would you prefer and whats your reasoning behind your thoughts.

What i am after is trying to get a view of how guys in our demographic group would percieve these two elements within their working time at a company.

If you would prefer to respond privately for some reason hey pm me but this is just a general discussion i am merely trying to gather different views on how these elements are viewed outside of my own head and thoughts. So their aint no right or wrong answer just your opinion.
 
well rob can we add to this mix that they present owner was a fair and trustworthy,, because some are not and have other motives..

given this addition, i would think that either option would make the receiver of this option, a reason to do more and try harder to make it work. also i think the majority of folks i am close to in a similar income level, would prefer the profit sharing set up.. todays stock outlook isnt real good and to many have lost a large portion of there investment from the loss of value in the stocks..so they seem to tend to get a dollar in there pocket rather than piece of paper saying you got so many shares of company ABC..
 
First thing I would think of is he has a problem with cash flow if he is all of a sudden offering shares of his privately owned company. I would need to see the books and see his projections for future work and or business.

You also need to look at the personality of the person making you this offer. Is he willing to listen to new ideas and possibly incorporate them or are they the type to agree with what your saying but in the end blow them off.

I would opt for profit sharing if I was working for the company.
 
well rob can we add to this mix that they present owner was a fair and trustworthy,, because some are not and have other motives..

+100 on this. If you are a partial owner you are also potentially partially liable for debts (not a lawyer, depends on business structure, ymmv). I've heard stories of a specific type of business that is usually structured as a partnership suddenly offering shares to junior members when they face going under to spread the debt.

I would generally consider the motives of the owner and what the perceived benefits are. If the owner is older and considering retiring, offering an ownership interest could be a way to start transitioning ownership of the business (I had a similar situation to that that I ended up passing on for various reasons). It could also be as part of a "vested interest" plan, I've considered a particular venture several times (but keep chickening out :D) and would definitely consider offering partial ownership or at least profit sharing to key employees who make the business what it is. Its a good way to keep good employees vested in the business and provide them with a sense of ownership and pride. A local brewery did very well doing this and has produced a lot of successful alumni who eventually sold back their shares and moved on to other ventures. In that case it was also a way to keep initial salaries manageable, you take a cut now in the promise of growth later.

For the shares, in this case I don't believe it sounds like you're considering the "stock value" in the stock market sense so the actual valuation of the stock is mostly meaningless, except for a couple of key items: can you sell it back and if so have you agreed on a value ahead of time? Presumably you would get some percentage of profits (if any) or there is some other long term strategy towards which you are working (otherwise its just paper, I've also had that... made nice fire starter :rolleyes:).

Profit sharing is relatively straight forward, except if it is structured to adjust your bottom line down in the case of poor revenue (i.e. we're cutting your base by 50%, but hey you get 25% of profit - oops we have no profit... hey look you just got a 50% pay cut).

Sorry if we're all sounding so negative, either can be a great deal; but the downsides are where there are downsides so naturally that's whats going to come up first.
 
Are you being offered an ownership (profit or loss) share in lieu of a wage or salary? If so, make sure you see the profit/loss history for the past couple years. If your share of profit is less than your current wage/salary, then take a pass.

Are you being offered a share as a bonus? Again, make sure the share doesn't expose you to company debts.

Is this a privately held corporation (An "S" corp or LLC in most U.S. states)? If so what is the value of the shares offered, and or, will this include a partnership or corporate officerdom? If it makes you a partner, then you might have some liability exposure.

If the shares have monetary value, can you sell them to a third party?

All these questions need answered befor you jump in. All the questions in previous messages here are also quite valid.

Do your homework!!
 
Had it happen to me. I gave boss notice I was moving on and was offered a 25% share of the company and a raise if I stayed. I declined the offer and six months later the company went under. I believe it was headed that way anyway, which is why i left. I found out later there were no profits to share and the boss had been working without a salary for months.
 
Ok this is as i said research. No applicability to me.
See what i am getting at is what Larry was on about. In my view, should a owner reach the point where they are stepping out or down from a going concern but the business is a privately owned business imho offering the staff the shares and consequential ownership is not something i belive most working people want.

I think a profit sharing scheme where their participation means more money if compnay does well is a more meaningful proposition. Imagine for a minute that your colleagues suddenly become your fellow shareholder and one of them is elected through the bunch of you voting to have that person suddenly lead the company.
Now what.? How would you feel?
Also in a private company you are not generally free to sell your stock to anyone. Typically you end up selling it back to the company that is if the company can buy it. If its a small amount anyway and the company dont want to buy it few others would buy into a private company when its a small stake.

See there also potentially comes a time when as a group of workers you may have to be prepared to take on the liability of a line of credit for the company so would you still want stock in the company ?
My question has nothing to do with who or what the owner is or the company is about and more about the fundamental difference between the worker and the business owner.

One party has taken a risk to have the freedom to chart the company course and the other has surrendered this freedom for a theoretically constant income.
Offering shares to the worker when said shares are not able to be easily traded at will is a total dead horse in my view.

Few people realise that even stocks that are listed in some cases might mean you as a shareholder have to ante up with more funds even tbough you dont have a liability to do so. This often happens simply in a disguised form through dilution where the company issues more shares to raise capital. Your share becomes worth less per share by and by default you put money into the business even though you did not write a check.


With this insight and current owner out of the picture what say you now to the idea of having shares given to you in that private company.?

Like i say this is research on my part to get a sample of views of people that have worked for a boss all their life rather than been their own boss or self employed.



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I don't fit your original profile, Rob, but I experienced a similar perspective and have an opinion, which you are free to disregard. I was laid off from the telephone company in the early '80's at an age where getting another job was problematic. Coupled with a body of knowledge for which there was no current market, I was forced to become self employed. The only thing in which I had knowledge and tooling was woodworking. I was also gifted in people skills, writing, marketing and teaching skills. I knew zip about money, investing, estimating, inventory control, purchasing power, and gazillion other things I had to learn on the fly. My shop was too small. I didn't have sufficient storage or assembly area, and I was missing some key machines.

The skills and interests that it takes act in the capacity of the owner are significantly different from that of a salaried or hourly employee. I was ill-equipped to be self-employed, but because I had no other choice, I had to acquire the knowledge needed or fail, losing my house and likely becoming homeless. I was never very far away from that reality for decades. I also did not have a family to support.

FWIW, I believe that the skills and experiences of employees do not prepared them in any way to operate a company, whether it is a sole proprietorship or employing numerous other workers. The fiscal, marketing, sales, strategy, planning, forecasting, and many other essential components of a successful business are overwhelming for one person, let alone for one also doing a job before acquiring a controlling interest.

Further, I think that a business that wants employees to take shares in lieu of either raises or benefits is gathering rats for the sinking ship. The comments made earlier with regard to liability and such ought not to be lightly dismissed.

I managed to not starve from then to now, but I took on many different things to keep bills paid and beans on the table. I started with building furniture, but also had to invent, manufacture, and market tools, teach in the classroom and my own shop, write a book, and go on the road to do paid demonstrations and presentations, and that didn't happen until I had developed some recognition by others. The business doesn't have to be woodworking, but flexibility applies to all ventures.

My two cents.
 
As has been already mentioned, I would first gather all accounting information about the company, second I would find out up to what extent I would be able to influence the decisions of the company or if I would be only an investor with no power at all.
And last but not least, if I thought it was worth, I would think why I hadn't thought about making the same proposal to the owner, instead of waiting for him doing it.

I don't know about US, but here there is a type of bussines called "Cooperativa" where all members are owners, and share benefits and risks, on top of that the "Cooperativa" can hire workers of any level, even general managers that are not members. I know that there are different legal kinds of those Cooperativas depending whether they have a limited amount of owners, wheter the owners respond with their own capital or only with the capital invested and so forth but my knowledge of those details is nil.
 
Toni, we have some 'co-ops' in the U.S. Some are successful and some aren't. Farmers often form coops for selling grain and such. There are also employee owned businesses that can be successful. As you say, the bewildering maze of laws is a big factor in forming, or maintaining, a company.
 
Like the others, distributing shares raises a lot off red flags to me about the company health. You can always implement profit sharing without surrendering any rights or ownership in the company. However, a friend of mine is the sole salesman for a machine shop. He is very critical to that business, and was given a % ownership. I suspect the shares are forfeit if he ever leaves, because the whole point was to keep him there.
 
This is wonderful feedback i would like to try and remain out of the role of adding my two cents for now. Please pile in with more thoughts.

As a person that has grown up outside of the USA its entirely fascinating to hear these views coming from what i believe is still the powerhouse of the worlds entrepreneurs and marketing prowess.

I would like to open this debate up to hear more views. It would seem to me that the "worker" today has been so conditioned with being a paycheck worker that any thought of possible change to that concept raises enormous suspicions bordering on the old communist under the bookshelf concept of the cold war.

Let me add something here that may put a little different perspective on things.

First small business is the largest segment of business in the world today. Fact.

Next the demographics of the west means that an enormous amount both in terms of physical numbers and by total valuation due to that physical amount of small business has to change hands in the coming years in order for the economy to continue and for the worker to have an income. Forget the concept "job".

This means a transistion of wealth greater than the resources available to fund such a transistion. The reality is that if the transistion does not happen these entities will simply close forcing people into a state such as Carol described in her comments. Now this is nothing new or revolutionary its something the entire business community in the western world has known for years.
What is also not new is that so many of the small businesses have anything but the kind of net value that the owner percieves it to have after the lifetime of sweat and worry.

But it would seem that the worker is totally unaware of the tsunami that is going to engulf their world. The workers kids are off to School to be better educated but with an education more suited to a coporate defined role after an internship. In this arena essentially competeing for a job for which thousands of their peers are also competing.

Yet what i am hearing is that the worker unless the ownership is transfered in a risk free manner ad infinitem is unwilling to do anything towards extending their continued receipt of a paycheck while they are part of an entity that has numerous more benefits (even one that has difficulties (yes) ) than ending up unemployed and risking all on their own to produce a paycheck.

Wow.....wow.....wow.....is what i am hearing correct?

It would seem to me that the way to bring down the powerhouse of capitalism is to provide a few generations with comfort and a tv that they become entirely risk averse and being typical of our species will not react until unfortunately the tsunami is unpon them. Quiet the opposite to what i have experienced being the case in other parts of the world.

Its one thing not to participate in economic activitiy when faced with adversity such as say sanctions but entirely something else when one is born in a free state.

I would love to hear more thoughts from ya all on this matter.


In my mind i see the images of New York being built with guys swinging around on I beams without hard hats and proper shoes and taking enormous risks to earn a paycheck. Whats happend to that spirit. Whats happened to the spirit of those people that manned the wagon trains and packed up every worldly possesion and headed out with a dream of having a piece of land. Or the guys that built those crazy wood and string planes.???
 
as you have said, we , me included have instilled in our children to get a education, use your brain rather than your back. but in the same formative years i also taught them how to be self sustained, how to swing a hammer and how to fend for themselves if need be. both got degrees and have done ok for themselves. but even still they are in the mix of relying on the corporate farmer to feed them, and the other consumables form where ever.. if we dont get back to learning and doing our our people right we wont be here to run a business adventure. if the corporate jobs were to dry up what good is this piece of sheep skin..take the auto industry for example, you might be the best air bag engineer going but if no one is buying cars where is that degree gonna take you,, if the country needs to build new housing or factories because the last war took most of it away.. or even if the country hasnt kept the existing ones up to par.. who is gonna do this kind of work.. we have lost alot of craftsman and alot to the gaming and texting pastimes.. we need to get back to the trades so that we can be the high iron workers and the ditch diggers to make the roads and other necessary meaningful tasks and we also need to be able to survive on the wages that are there.. you cant work if your hungry and homeless.. if this sounds political and i am outa line go ahead and delete it but at least read it first.. and look back at your past and see what has been in the back ground up threw your journey in life.
 
I believe most people in todays economic environment, are just too scared to take risks that involve their financial stability, or dissolve whatever nest egg they have.
People like working 9-5 knowing a paycheck will be there each friday, and they dont have to put that at risk.
Its no wonder so many businesses went down the past 5 years, no innovators, no new blood pumping in ideas to keep up with todays times.
Things are tough out there today, and I dont think people want to risk anything financially knowing how fragile things are.
Getting something for free, well, doesnt mean there arent consequences.
Nothing is free. Nothing comes without its headaches and hard work.
 
allen to add to your words,, one must remember that we shouldnt rely on the 9 to 5 being there tomorrow. alot of us have seen these changes, what once was secure because of loyalty, seniority and skills is now replaced by a train of thought that age is a deterrent, and that we can always replace the number that made this product elsewhere. some how we need to sustain ourselves and not be reliant on others as much.
 
I think you are perhaps misstating the response slightly (at least for my part). I agree that there is culturally a vast unwillingness to take risk; and I do blame both our educational system (which is largely designed to turn out worker bees who are told what and not how to think and was more appropriate to the factory era of 50+ years ago) as well as some of the cultural heritage of the "good lifetime job" myth. However speaking for my response only; I am adding caution because I've seen people being offered "opportunities" that are anything but. Buying into a failing business is not an advancement, and practically speaking many (?most?) small businesses are distressingly "poorly" run and most go under.

This isn't always the fault of the owner, at least not in an obvious way; I have some friends starting a business and I see them doing things that are going to cost them days or weeks of critical revenue later in order to save a couple of hundred today - but the trade off is that they can pay the bills today and if they can't do that they risk going under. As an owner you sometimes have to make trade offs that aren't pleasant and sometimes things just don't work out (don't be the 5th failed restaurant in the same location - its a bad location).

You also have to consider who you are polling. Generally speaking hobbiest woodworkers tend to be fairly middle class and up who have some leisure time (pro woodworkers have it a lot rougher - hats off to you guys). This class has generally been somewhat conservative don't rock the boat types.

You can also bet that the follows building the skyscrapers back then didn't have any company shares and many of the people who ventured west were - by modern standards desperately poor. If you have nothing to loose you're more willing to take chances, or if you see strong growth opportunities ditto. We're in sort of a weird place in history where neither are very true which does lead to some weird incentives.

You also have to actually believe in the business. As a founder you can easily start wearing rose colored glasses (I call this "irrational optimism" and believe its necessary for anyone starting a business to have it - you NEED to believe in success and crush all evidence to the contrary - it helps if you're also correct in your call but it seems that's not absolutely necessary, sometimes strong individuals can create a powerful enough reality distortion field to overcome logic). Expecting all of the employees to believe in your business the same way you do is irrational as well (unless you're the next Steve Jobs... reality distortion field engaged).

There is also the question of control and self destiny. If you do believe in something there are few things more painful than watching it die because of decisions you don't have any control over. Having "ownership" means nothing if you can't influence some of the direction, it just means that you are frustrated and see good opportunities being tossed. In the one case where I sort of had a possible long term takeover scenario I had built (more or less single handedly) a pretty reasonable revenue stream for one side of the business. I really wanted to grow that side of the business and could see where we could make a LOT of money by expanding our market share. The (sole) owner was unwilling to invest any of the profit back into the side of the business I was working on and was bleeding the profits back into the other side (which was the side he understood and what had admittedly built and carried the business for a long time before I started but was going through a rather rough spell - again I understand the dilemma/thinking but disagreed with the outcome). I tried to work with him to put some of the profit from my side back into building the business but eventually gave up and moved on. If I had had access to ~$25k in capital at the time I believe I could likely have built a comparable business to one that sold to Sprint ~5 years later for 1 Billion dollars (yes really, I was a year earlier than they were but the overall model and strategy were the same - no guarantee of course but right place, right time, didn't happen - I made a few abortive attempts to get some side funding but none of them worked out).

In at least some cases the individual would be much better off spinning out to their own business. Technology improvements and (lets be honest) crazy wealth as a nation have lowered the bar to entry for many types of business to unprecedented levels (there are obvious exceptions; like if you need a shop full of machinery the startup cost may be prohibitive and there are some capital heavy industries that just have a high barrier to entrance naturally). I happen to work in a technology field where the barrier to entry is ridiculously low in historical terms so I'm pretty sure my perspective is somewhat skewed, adjust your reading of this accordingly. People who really want it are willing to take "sacrifices" (i.e. I lived for years in AZ with no AC, no phone - for periods, no TV, no real furniture besides a chair and a desk) - I put the word "sacrifices" in quotes because if you're busy you don't miss most of it; and the vast majority of the world still can't imagine most of those things anyway. I actually see some evidence of this in some of some of the younger generation.

I'm also, from a personal finance point of view, hesitant to put to many eggs in one basket. If my primary income is at <firm A> I'm hesitant to invest large percentages of my savings in <firm A> as well, I saw this sort of thing go horribly wrong for some folks in the 2000 tech crash. There are some exceptions here where you may decide to go big or go home and take the risk. If its a mom & pop small business plodding along though I find it harder to muster enthusiasm the same way because (lower barrier to entry myself, limited growth prospects).

For entirely selfish reasons I've spent a little more time investigating the example business I mentioned earlier (full sale brewing). I know of at least four people who are "alumni" and have used ?some? of their employee ownership rewards (and based on talking to folks + other evidence more savings from salary, etc..) to open "competing" businesses in the local area (I believe that the craft beer market is at least somewhat synergistic so I don't consider them to be fully competing). Two of the earlier offshoots I believe did fairly well from their employee ownership, the later ones I believe less so as the value in the original company became more dilute (this makes sense anyway, earlier means more risks).

Some random things I found along the way:

To quote some of the comments from glassdoor.com:
"Employee ownership is marketing scheme, and not a reality. Only upper management really benefits from ownership. Most employees see minimal monetary value."

This was from what I think is a later employee who has a smaller share.

From a cnn article: http://money.cnn.com/galleries/2009/smallbusiness/0909/gallery.worker_owner_coop.smb/2.html
"avoid being bought by a larger company and "incentivize the [47] people already working there." "
"this arrangement has helped the company find ways to save money and increase profits in the face of a recession."

So again from a primary owner perspective - spread the risk, incentivize the employees, cut costs - makes sense. From an early employee perspective where you have possible large growth or long term benefits, again makes sense. From a later employee or one where you don't see the growth (for whatever reason) its less compelling.

Interesting article at national center for employee ownership (there is a lot more there): http://www.nceo.org/main/article.php/id/26/

So can employee owner ship work and be good for all parties? Sure of course. Does it practically do so in all or even most cases? I'm less sure. Its certainly more complicated than "here kid have some shares" in order for it to be beneficial for all parties involved.
 
Well Larry you add some very interesting points to this topic.

If any of you have Netflix take a moment next time you at the box to watch a documentary or two instead of the hollywood garbage. Most of the netflix stuff is B grade anyhow. But there is a documentary there made by the BBC called "Wild China" . Its a multi part series about China looking at it more from the physical country amd wildlife perspective and examing how all this is coping with what is happening in China from a growth perspective.

So you might ask where is the relevance to this business topic?

Well ....one interesting facet is a part of the country where they grow rice in paddy fields that quiet frankly we would consider too difficult to access and bother with. These fields go up the side of steep hills. They still turn them over with an ox as the source of engine power. The thing is on its own anyone of these individual pieces is nothing but like a quilt tie them together with an aerial view and you have a vast area. So looking at this one might wonder how the local farmer gets the whole lot planted. There is certainnly no mechanical means available to do it.
Well here comes the punchline....the entire local community gets involved and makes it happen. Why? Well quiet simple if they dont there wont be food.

Now this is no different to an informal co operative or in just a different set of terms a small business. Its time we woke up to the fact that these words we have come to use mean pretty much the same and that having a stake in a small business is no different to being one of the villagers in that Chinese business.

You may begin to see your place of work somewhat differently once you digest this point.

That village still risks hoping their efforts are not spoilt by some act of nature which is entirely less control of events compared to what i am hearing here. i.e. That unless i can effect control over how the rice is going to be planted i am not going to participate in rice planting.
You can be certain there is only one farmer calling the shots in this field. He has learnt through the years what it takes to know when to do what process and how.

We should have learnt by now that a committe never gets to do anything of a wow innovative nature. Committees simply boil things down to a common consesus forming level diluted of the original idea.
I always say collaborate but only one man can pull the trigger at time and to get something going or done you need thatone man prepared to do it.

On the subject of risk, it never ceases to amaze me how the general populace perceive risk.
Most wives i know feel more secure living in a dwelling they have a liability to pay with said dwelling having a mortgage dependent on a paycheck dependent on a business owner being a success.
They therefore are tied to the physical location to such a risky extent that were that owner to fail, and the paycheck cease, they are worse off than said business owner but in their mind perceive this setup to be secure.

Where is the sense in this logic. Surely there is less risk being actively involved and engaged in the venture generating the paycheck being able to adapt to change without a ball and chain called a mortgage.

Yet when i propose said paycheck earner taking over the shares from the "rice farmer" the community would rather go without rice and deal with the consequences.

Me thinks this makes no sense. :)

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I have worked for a company that had profit sharing, and encouraged share purchases. It was more of a joke than a reality. The reason is that it was a very large share held company and the bottom line was that the employees had little or no say in the direction of the company.

In a smaller company I can see offering profit sharing as an incentive to retain employee loyalty. In my mind this would require a sterling fiscal integrity on the part of the owner and transparency. It is true that your employees are the most important asset of a company.....if they are given an honest chance to be that. So this kind of company would have to be creative, cooperative, work hard at communication, and reward innovation.

I think a sliding scale of profit sharing would be perhaps the best model. If employee "x" worked to improve their skills and education to further the profits of the company, then employee "x" should be given a larger share in the profits. Some employees are just there for a paycheck and really don't care about the bottom line. So they shouldn't reap as much of a reward for their services.

I am pretty much disgusted with corporate America. It is every man for himself and I think we are seeing the wreckage of this greedy mentality in the current economic melt down. People are reduced to being just a number on the corporate rolls. This has always resulted in corporate decline or collapse. Personally, I have experienced the lack of business morality. Often it seems that corporate people are concerned with short term gains at any expense and are busy trying to claw their way to the top of the heap rather than doing what they can to help develop other people to help grow a cooperative business vision where everyone's position is advanced.

To myself, a business exists to provide a decent living for the FAMILY. In this country where the individual ie "individuality" is prized, the family suffers. Most businesses I have been part of, or worked for, suffered from a myopic vision where the people at the top recruited others like themselves, who thought the same way, and had the same faults. A healthy business model has people with different personality types, different strengths, different thinking styles, and different backgrounds. There is a tension that exists there that helps keep a business healthy. But also an atmosphere where true innovation and creativity can exist.
 
Ryan thanks for your extensive and well thought out reply. We share most of the same views. In fact i agree with all you have said.
I am especially concerned that our systems turn out worker bees. Being a lifetime entrepreneur i have exactly personally witnessed the need to see things through rose colored glasses. Also got to a point several times where those glasses had to be changed for clear ones. :) and face the facts of the reality of a situation.
Now i am assisting other small business owners who face the dilema of a changing of the guard and they finding its not that easy to do.

Small business does not mean micro businesses. A business with 100 people is classified as a small business and there are many many this size and smaller even much bigger are still small business.

I should say i have three primary areas i concern myself about that center around small business.

1) The small business or independent business owner.
2) Unemployed normal people that want to work. ( because i also believe there are those people that fundamentally for many reasons simply dont want to work)
3) Youth that are educated and dont find work but want to work.

My experience with the number 1 has shown that many in this category that are today gray haired and not ivy league educated but business savvy started out the business not neccessary because of choice, speaking to your point about the state one often is in when a business is started. With much at risk and no fancy education around the management style is not neccessary adapted to producing successors.

Number 2 is not normally a problem in a decent economy but we are living in very volatile changing times and if you were spawned as a worker bee, its not easy or fair to expect this person to suddenly become a business owner but number 2 did back in the day.

Number 3 has me thinking back to my days in South Africa. When you have unemployment at levels of 40% it does not matter how educated you are. Yet the argument put forward to the youth regardless of color was get an education. The consequence of this kind of approach is now having a educated unemployed 40%. To me if every one wants to create dissent and resentment which threatens the very stability of that comfortable middle class lifestyle all one needs to do is ignore these people. When educationalists, governments and industrialists have told a group to get an education and they duely have and done so under duress that exceeds what western kids have experienced then you have resentment and militantcy second to none.

For this reason i try to do my small part to alleviate where possible through my daily work or influence the circumstances these groups face because "there but for the grace of God go I" .

I do think we need to examine with fresh approaches some of the issues facing our communities. While i am polling a bunch of hobby woodworkers that are possibly middle class there are also a bunch of working pros and others here that might benefit to think of solutions in a different manner than what has been the tradditional approach but without exposure to such options these thoughts may never occurr.

For one example i think of the number of solo wooworkers who are micro businesses in their own right and our debates in the past about how difficult it is to make a living doing this.

Yet little discussion has ever evolved the concept of collaboration and collective selling. I love the self reliant independant nature, heck i am that way myself, but there is no doubt in my mind the one person cannot be good at every facet of a business just the same cannot be excellent at every facet of woodworking.

In a country where the likes of FEDEX can get something from one place to another faster than Walmart can get a ship from Shangai to Los Angeles, there is little excuse in my view for lack of collaboration among shops.

In my time i visited Taiwan on business back in my tech days. The way they worked back then was to have many smaller shops each shop had no overhead but one key element it produced or sevice it undertook.
One guy set himself up as an agent for all the shops. This way they did not all have to have sales staff or marketing. By representing a few he managed to cover the costs spread over a range of products.

I have seen a similar approach in Northern Italy. But i have not seen much of this kind or style of operation in North America and i am not meaning a wholesale or distribution type operation.

I still would like to hear from more about their views of ownership of shares in a private company. This is not for me its to garner outlook from a sample of people.

Thanks for putting up with my business posts. I do value what my friends say and yeah i know most of you would prefer to forget the business side and leave it out of the forum.
 
For one example i think of the number of solo wooworkers who are micro businesses in their own right and our debates in the past about how difficult it is to make a living doing this.

Sorry for the tangent, but this part is interesting to me :D In this case I think there is a bit of challenge in determining cause and effect (i.e. why is it difficult). I've thought about that quite a bit (I think a lot, which is probably why I still work for someone else - over thinking) and I believe I have at least a tentative answer (cavalierly disregarding all of the other obvious challenges to actually running a business).

TL;DnR: selling commodities as a small business is ridiculously hard, selling craftsmanship is also hard but plausibly successful.

There appear to be two primary markets you can go in small manufacturing for:

  1. Things people need
  2. Things people want

The problem seems to be that going after category 1 you are a) competing with the volume people (aka walmart) and b) are generally vastly under appreciated (yeah so its a table who cares, I can get one made from pressboard at le targete for 25% of the price). People who do well at low volume seem to be mostly the people who are hitting a sweet spot in category 2. Price also matters (but not how you might think), a table with a $100 price tag on it is "meh whatever" (see previous), slap a $2000 price tag on it and all of a sudden its "art" or at least "craftsmanship" instead of a "commodity", sure you sell less of them.. but you need to sell less as well (not claiming its logical but a lot of psychology studies back me up here). I've talked to a couple of folks who ran small scale production cabinet shops who disagreed with me here in that they did well selling cabinets people "needed", my response was "yeah but they wanted the nice one you make. I also don't believe that it was an easy living :D

To speak to your below point, this requires the person to either also be an expert in marketing or just plain get lucky. I think a lot of people who are successful end up being lucky and a few figure out the marketing and have the rest and are no longer small...

Yet little discussion has ever evolved the concept of collaboration and collective selling. I love the self reliant independant nature, heck i am that way myself, but there is no doubt in my mind the one person cannot be good at every facet of a business just the same cannot be excellent at every facet of woodworking.

In a country where the likes of FEDEX can get something from one place to another faster than Walmart can get a ship from Shangai to Los Angeles, there is little excuse in my view for lack of collaboration among shops.

In my time i visited Taiwan on business back in my tech days. The way they worked back then was to have many smaller shops each shop had no overhead but one key element it produced or sevice it undertook.
One guy set himself up as an agent for all the shops. This way they did not all have to have sales staff or marketing. By representing a few he managed to cover the costs spread over a range of products.

I have seen a similar approach in Northern Italy. But i have not seen much of this kind or style of operation in North America and i am not meaning a wholesale or distribution type operation.

The downside is that you give up some control (or, as bad, believe you give up some control). The reason I make things is because I enjoy making them.. If I had to make the same rubber stamped item every day it would rapidly turn into (horrors) a job :rofl: Seriously though, I see this as a problem in most craft based industries and there is a delicate balance here between collaboration and lack of control. This is why breweries do "brewers shares" where the brewer decides what to make and does something fun for them (day in/out they do the same boring beers we all drink :bonkers:).


I still would like to hear from more about their views of ownership of shares in a private company. This is not for me its to garner outlook from a sample of people.

I have a sneaking suspicion that you aren't actually asking the correct (complete?) question or that at least its a very hard question to answer as asked in generic terms and that there may be a more direct question that would help you get a more useful set of answers. I'm not sure what that question is, but I think you're hinting at it above...


BTW: If you haven't read this (and you're into this sort of thing :rolleyes:) its well worth a read:

http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-the-office-according-to-the-office/

This (imho) explains some of the psychology of entrepreneurship vs not and may explain some of the ownership vs not questions (WHY its this way is another question altogether).
 
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