America Ranks Low in Self-Employment

[Aunt Spiker]

One key about good business is maintaining good business rapport. . . being polite and helpful beyond your expected means. This will actually help your business grow.

If I was in your shoes and someone wanted 50/100 business cards I'd politely point them in the direction of Walmart - they sell a small variety of punch-out non perforation business cards for maybe $10.00 for 100. Great for starters - I've used them extensively but large quantities are expensive and the quality is only as good as your printer and program.

If they start their business with their homemade business cards that you suggested they use and things go well - they will consider you to be their source for larger numbers of business cards. . . and come back for cards or other services.

By intentionally discouraging them from doing business with you - you drive away their possible future business and other possible business they might bring. Perhaps they have a friend who's a lawyer or a brother who's in the military who occasionally purchase business cards?

If just 1 or 2 of these people in an entire year came back - or mentioned your business as a good business to someone else - then that's *more* business for you = more profit.

You can't be judgmental - looks don't matter - some of the *best* business men I've known looked like crap but were honest, hard working and paved a good path for their selves. One such person is my septic-tank guy, Harold. He looks like crap (he works with crap, what do you expect?) but he's polite, hard working and savvy - and now is co-owner of the pump-company's truck and equipment supplier. He makes excellent money.

I've been assistant and department manager of several businesses in my life - a positive attitude is key. Especially if you're just 'the dude behind the counter' - you don't want to just *be the guy who rang me up* you want to *be the guy that helped me get my businesses going - what a great guy!*

If this isn't your concern then why are you working in a customer-oriented business?


Onto your question of what is considered a Small Business?

According to the SBA:

A small business concern is organized for profit; has a place of business in the United States; makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor; is independently owned and operated; is not dominant in its field, on a national basis; and is no larger than SBA’s small business size standard for its industry. A business can find the size standard for its industry in SBA's Table of Size Standards.

Small business size standards are numerical definitions of what constitutes a small business. A business concern is small if it is at or below a size standard. If a business concern is small it is eligible for Federal government programs reserved for small business concerns. Size standards have been established for types of economic activity, or industry, as defined under the North American Industry Classification System (NAICS). The most size standards are defined based on either average number of employees over the past 12 months or average annual revenues over the past three years. The most common standards are as follows:
$0.75 million for most agricultural industries
$33.5 million for heavy construction industries
$14.0 million for specialty trade contractors
500 employees for most manufacturing and mining industries
100 employees for all wholesale trade industries
$7.0 million for most retail and service industries
(For complete list of size standards, see the SBA's Table of Small Business Size Standards).


About one-fourth of industries have a size standard that is different from these levels. They vary from $0.75 million to $35.5 million for size standards based on average annual revenues and from 100 to 1,500 employees for size standards based on number of employees. Several SBA programs have either alternative or unique size standards. For instance, the Small Business Innovation Research Company (SBIC) and Certified Development Company (CDC) Programs use either the industry based size standards or net worth and net income based size standards.

More info:
Small Business Size Standards

 

[MaggieD]

I have always wondered where the SBA gets its figures from and how they define the existance of a "small business". During the spring, in my business (we are a printing company) probably half of the people who walk into my shop are wanting to start either sometype of "landscaping" business (usually cutting grass) or pressure washing business. The first place a new business owner heads to is the local print shop to get business cards. They don't realize that it is hard to get customers, they don't have the sales/marketing skills to do it, they don't have the cash or equipment to do it, they don't have the right personallity to succeed in business, it gets friggen HOT in these parts by the end of June, and they don't want to put in the effort that it takes. But it sounded good to them when they concieved the idea and they were excited about it and wanted to get started in a hurry (that explains why they all want their business cards on the spot while they wait even though they haven't even thought up a business name yet).

I rarely get repeat business from them because within a month the vast majority of those people are out of business (although 95+% of my business in terms of dollars invoiced is from repeat customers).

I figure if someone purchases business cards, even if they havent filed any type of paperwork, they still qualify as a business for the few days that they pursue being a business. I would guess that the true 5 year failure rate far exceeds 90%.

A few weeks ago this guy comes in, he wants business cards, I could tell right off that he was a total looser. I get really tired of dealing with these people (business cards are NOT a major profit center for our shop) so I decided to a different tactic with him. I said something to the effect of: "You are not just going to need business cards, you are going to need yardsigns, and vehicle graphics, and invoices, and business checks, and mailers, and fliers, and customer satisfaction questionairs, and a perminant sign, and advertising specialty items, and screen printed or embroidered employee apparal, and employee time cards, and screen printed shirts to give to your customers and venders, and some vinyl lettering on your business vehicles, and a set of removable car magnets for your personal cars." I told him that I could work up a package deal for him on all of that stuff for around $5,000. The guy said he would have to come back later. Naturally I never saw him again.

Had a lady call a while back, she wanted to know how much it cost for 50 business cards. I told her that our minimum was 500. She explained that she did not want to purchase that many because she did not know if the business would be sucessful. I explained that if she didn't think that she could give out 500 business cards that her business would indeed not be sucessful and that she might as well save her money. Needless to say, she didn't place an order.

ImagP -- I have to ask you -- are you proud of the way you discourage these people? I owned a printing company (started it myself at 19) for 22 or so years. I get what you're saying but . . .

Aunt Spiker -- You're so right about looks. Ha! If someone judged me by the way I dress sometimes, I'd never get anything done. I am smart enough to know when it matters, though. ;-) Nice post.

 

[Aunt Spiker]

I've managed plenty enough to know where Imagep is coming from, though - absolutely. Work is exhausting.

My true thought on I's situation is to actually capitalize on the small-business start ups rather than discourage it. How many come in? If everyone came in and spent $50.00 how much $ would that be?

I see profit-possibilities: sell products for their home-start use (self-print business cards and like materials) - and packaged deals that can "get them advertised for $75, $150, $200". . . of course the larger quantities *would* be cheaper to purchase when you break it down - the smaller start-packages would be more costly per unit to offset the slightly more intensive work of *change change change* that goes along with more frequent and smaller orders.

 

[MaggieD]

I've managed plenty enough to know where Imagep is coming from, though - absolutely. Work is exhausting.

My true thought on I's situation is to actually capitalize on the small-business start ups rather than discourage it. How many come in? If everyone came in and spent $50.00 how much $ would that be?

I see profit-possibilities: sell products for their home-start use (self-print business cards and like materials) - and packaged deals that can "get them advertised for $75, $150, $200". . . of course the larger quantities *would* be cheaper to purchase when you break it down - the smaller start-packages would be more costly per unit to offset the slightly more intensive work of *change change change* that goes along with more frequent and smaller orders.

My business was in an upper-middle-class area. That $50 business card order? Chances are, it would have turned into an order for $150 -- for some stationery/envelopes. We never ever turned business away. Everybody that came to us got a brochure on the myriad services we offered. We got referrals allll the time. If not for this, then for that. I guess that's why we were very successful and had a business to sell when we were ready to hang it up.

 

[Aunt Spiker]

My business was in an upper-middle-class area. That $50 business card order? Chances are, it would have turned into an order for $150 -- for some stationery/envelopes. We never ever turned business away. Everybody that came to us got a brochure on the myriad services we offered. We got referrals allll the time. If not for this, then for that. I guess that's why we were very successful and had a business to sell when we were ready to hang it up.

Yep - business cards and so on are advertisement to your customer's needs.

And their business *with* you is your advertisement.

 

[phattonez]

The tax system definitely benefits a self-employed person. So many things can get written off above the line that can't otherwise be done. Need a car in your business? You can lease one and write off the payment. Write off car repairs and gasoline, insurance. You can deduct your health insurance from dollar one. You can take advantage of SEP's to shelter money. Eating out? That can pretty easily be called 'advertising/promotion expense' in many instances. Oh, charitable contributions -- again, off the top. If your business starts making REAL money, you can shelter an awful of it through a Defined Benefit Pension Plan. That's just a few I can think of right now.

I've been self-employed my entire career. I pay around $600 a year to have my taxes done. Withholding for employees is a snap once you're on to it. And most people don't start right off with employees, so they sneak in to that complication a little at a time.

Decide on a business you want to open. Open up a separate checking account, and you can be open for business tomorrow.

Seems like stuff I wouldn't want to do if I were to become an entrepreneur. I'd rather look for new ideas and try to get people into the business rather than spend a lot of time and money doing taxes. I absolutely hate accounting and I'm sure that many would-be entrepreneurs feel the same way.

 

[Aunt Spiker]

Seems like stuff I wouldn't want to do if I were to become an entrepreneur. I'd rather look for new ideas and try to get people into the business rather than spend a lot of time and money doing taxes. I absolutely hate accounting and I'm sure that many would-be entrepreneurs feel the same way.

Well that's why many Entrepreneurs pay accountants to do their taxes as a service by proxy. Businesses and individuals in general, really.

they're necessary, really, if you don't understand the tax codes thoroughly you'll likely **** yourself over trying to do it yourself. Sure, some people have a knack and commit no fouls - but many don't.

 

[phattonez]

Well that's why many Entrepreneurs pay accountants to do their taxes as a service by proxy. Businesses and individuals in general, really.

they're necessary, really, if you don't understand the tax codes thoroughly you'll likely **** yourself over trying to do it yourself. Sure, some people have a knack and commit no fouls - but many don't.

Seems like a waste of resources as compared to a simple flat tax.

 

[PeteEU]

Seems like a waste of resources as compared to a simple flat tax.

Nothing is every simple. A flat tax is nothing but a massive tax cut for the rich.

 

[Aunt Spiker]

Seems like a waste of resources as compared to a simple flat tax.

So you think that if we were on a flat-tax system we wouldn't have any accountants - and companies would never have to hire bookkeepers?

We'll always have accountants and bookkeepers and other number crunchers - no matter how simple things get.

 

[XYZABC]

Because you adhere to a school of thought that cannot explain or even theorize firm creation/expansion, i do not expect you to agree; institutional costs (be whatever they may) have a direct long run connection to firm creation. Reason be, firms can exploit tacit knowledge to create what mainstream economists refer to as "economies of scale". If you eliminate institutional costs, the need for firms goes to zero.

The Capitalist and the Entrepreneur: Essays on Organizations and Markets - Peter G. Klein - Mises Institute

11 matches for firm - Mises Audio/Video

Kind of a big mistake on your part it seems.

And how many were published by major journals? :lamo

Here is a list of major journals that they (the Austrian School economists) have published in other than their own journals on the "Theory of the Firm", which is just a small sample of what's available:

Boettke, Peter J. 1998. "Coase, Communism, and the Black Box of the Soviet-Type Firm." In Steven Medema, ed., Coasean Economics: Law and Economics and the New Institutional Economics. Boston: Kluwer, pp. 193-207.

Boudreaux, Donald, and Randall Holcombe. 1989 "The Coasian and Knightian Theories of the Firm." Managerial and Decision Economics 10: 147-54.

Foss, Kirsten and Nicolai Foss. 2000. "Economic Organization in a Process Perspective: an Explorative Discussion." In Jackie Krafft, ed. The Process of Competition. Aldershot: Edward Elgar.

Foss, Kirsten and Nicolai Foss. 2002. "Coase vs Hayek: Economic Organization in the Knowledge Economy." International Journal of the Economics of Business 9: 9-36.

Foss, Kirsten, Nicolai J. Foss, and Peter G. Klein. 2007. "Original and Derived Judgment: An Entrepreneurial Theory of Economic Organization." Organization Studies 28, no. 12 (June 2007): 1893-1912.

Foss, Kirsten, Nicolai J. Foss, Peter G. Klein, and Sandra K. Klein. 2002. "Heterogeneous Capital, Entrepreneurship, and Economic Organization." Journal des Economistes et des Etudes Humaines 12, no. 1: 79-96.

Foss, Kirsten, Nicolai J. Foss, Peter G. Klein, and Sandra K. Klein. 2007. "The Entrepreneurial Organization of Heterogeneous Capital." Journal of Management Studies 44, no. 7: 1165–86.

Foss, Nicolai J. 1993. "More on Knight and the Theory of the Firm." Managerial and Decision Economics 14: 269-76.

Foss, Nicolai J. 1999. "The Use of Knowledge in Firms." Journal of Institutional and Theoretical Economics 155: 458-86.

Foss, Nicolai and Jens Frøslev Christensen. 2001. "A Market Process Approach to Corporate Coherence." Managerial and Decision Economics 22: 213-26.

Foss, Nicolai J., and Peter G. Klein. 2005. "Entrepreneurship and the Economic Theory of the Firm: Any Gains from Trade?" In Rajshree Agarwal, Sharon A. Alvarez, and Olav Sorenson, eds., Handbook of Entrepreneurship: Disciplinary Perspectives. Norwell, Mass: Kluwer.

Foss, Nicolai J., and Ibuki Ishikawa. 2006. "Towards a Dynamic Resource-based View." To appear (in a slightly revised version) in Organization Studies.

Langlois, Richard N. 1995. "Do Firms Plan?" Constitutional Political Economy 6: 247-61.

Langlois, Richard N. 2002. "Kirznerian Entrepreneurship and the Nature of the Firm." Journal des Economistes et des Etudes Humaines 12, no. 1.

Lewin, Peter. 1998. "The Firm, Money and Economic Calculation: Considering the Institutional Nexus of Market Production." American Journal of Economics and Sociology 57, no. 4: 499-512.

There is no congruent attempt to understand the firm, and therefore your adornment for mises.org falls on deaf ears.

The difference between you and i; i have studied both sides of the spectrum extensively.

The Austrian School has every reason to understand the theory of the firm, since entrepreneurship is central to their economic theories.

That you assert that you "studied both sides of the spectrum extensively" should be evidence of willful blindness on your part of the extensive scholarship that is available.

Your lack of a real response to the evidence that I've shown you is very telling. Just a cop-out, no matter how much you try to put down the argument, it's not a real response.

The sad part is, you have not a clue where my comment leads. Because firm planning replaces market process, any Austrian theory of the firm will come off hypocritical because the idea of a firm revolves around central planning (from within the institution). Which is why there have been no real attempts by austrians to embark on such an endeavor. Hence, you cannot understand firm creation or existence within your ideological frame work.

The sad part is that you are deaf and dumb to what the Austrian School has to provide in this field. They are aware of the Ronald Coase theory of the firm.

They are the first to admit that a centrally planned economy (such as within a firm) can still do economic calculation, provided there is still an outside market available.

Hence you have come to a gun fight with a knife.

But you see, the posse has arrived. LOL :lol: :2wave:

 

[phattonez]

So you think that if we were on a flat-tax system we wouldn't have any accountants - and companies would never have to hire bookkeepers?

We'll always have accountants and bookkeepers and other number crunchers - no matter how simple things get.

I didn't say we'd have none. We'd certainly have a lot less though.

 

[Aunt Spiker]

I didn't say we'd have none. We'd certainly have a lot less though.

I doubt it.
Their jobs would be easier - but accountants do far more than *just* process taxes yearly.

and a flat-tax system will make some things easier - but it's not smooth sailing.

 

[MaggieD]

Seems like stuff I wouldn't want to do if I were to become an entrepreneur. I'd rather look for new ideas and try to get people into the business rather than spend a lot of time and money doing taxes. I absolutely hate accounting and I'm sure that many would-be entrepreneurs feel the same way.

I would say we've hit on why you're not an entrepreneur. If you don't see the benefit of a higher net bottom line, I don't know what ta' tell ya'.

What does "try to get people into the business" mean? You spend your time getting CUSTOMERS. You don't spend a lot of time and money doing taxes, you keep decent records (which is nothing more than a checkbook and copies of all your bills/invoices), and give it to your accountant. Now, if you're not a complete idiot, you'll give your accountant a list of how much you spent on WHAT and pay 'im $600 a year. But, truthfully? Most entrepreneurs are prolly too cheap and do their own with easy-peasy tax programs.

 

[Esuric]

Because you adhere to a school of thought that cannot explain or even theorize firm creation/expansion, i do not expect you to agree; institutional costs (be whatever they may) have a direct long run connection to firm creation. Reason be, firms can exploit tacit knowledge to create what mainstream economists refer to as "economies of scale".

Your comments reveal that you posses, at the very best, a fundamentally superficial understanding of institutional economics. The field has come a long way since Coase's work, and Austrian contributions have proven themselves to be quite fruitful. Theories of the firm and entrepreneurship are absolutely central to Austrian capital theory (Hayek, Lachmann, ect), which is why they devote so much time explaining entrepreneurial discovery, expectations, uncertainty/risk, firm integration/disintegration, capital combinations, et al.

If you eliminate institutional costs, the need for firms goes to zero.

Absolutely incorrect. Read Alchian, Demsetz, Williamson, Hans, Holstrom, Milgrom, Liebenstein, Bewely, Simon, ect.

 

[imagep]

I would say we've hit on why you're not an entrepreneur. If you don't see the benefit of a higher net bottom line, I don't know what ta' tell ya'.

What does "try to get people into the business" mean? You spend your time getting CUSTOMERS. You don't spend a lot of time and money doing taxes, you keep decent records (which is nothing more than a checkbook and copies of all your bills/invoices), and give it to your accountant. Now, if you're not a complete idiot, you'll give your accountant a list of how much you spent on WHAT and pay 'im $600 a year. But, truthfully? Most entrepreneurs are prolly too cheap and do their own with easy-peasy tax programs.

I always do my own accounting and taxes. I think that is part of the job of being a business manager. You look at each and every expenditure and each and every sale a lot more closely if the bsuiness manager is the one dealing with the accounting. If I farmed our accounting out (or even to an internal accountant), I would likely not have a good understanding of what makes my company profitable. Even if the accountant provided me with a detailed accounting report, that in itself does little to help me manage my business as accountants are just accountants and generally know little about the specifics of particular industries or the value of particular expenditures. It takes a seasoned business manager with experiance operating a company to correctly interpret financial reports. I've rarely met an accountant who happened to have experiance managing any companies other than possibly their own accounting company.

 

[phattonez]

So most entrepreneurs are accountants who like to scope out new demands on the side, instead of the other way around where we have entrepreneurs who like to scope out new demands and maybe do accounting on the side. Seems inefficient to me.

 

[Kushinator]

Oh this is too cute :razz

Tony refuses to study what he desires to debate, and suddenly i am being bombarded by 40 (or 14) year old virgins. BTW Tony, i have an account at mises.org and made a similar post when i was confronted in such a similar manner. It seems like you are on the right track.

No theory of the firm? - The Mises Community

 

[Kushinator]

Here is a list of major journals that they (the Austrian School economists) have published in other than their own journals on the "Theory of the Firm", which is just a small sample of what's available:

Am i to be impressed? You left out Burczak:lol:

The Austrian School has every reason to understand the theory of the firm, since entrepreneurship is central to their economic theories.

The entrepreneur is central to their economic theories, not the existence and advantages of intra-firm planning.

That you assert that you "studied both sides of the spectrum extensively" should be evidence of willful blindness on your part of the extensive scholarship that is available.

The sad part is that you are deaf and dumb to what the Austrian School has to provide in this field. They are aware of the Ronald Coase theory of the firm.

Why is it that managerial economics is dominated by Coasian theory? I am not making the claim that Hayek didn't make a minor contribution, only that Austrians do not desire to understand the firm, and gripe, bitch, and moan about "boom/bust" cycles being caused by government action and central banking. What they/you should be interested in is the relationship between employees and employers, and how the standard firm hierarchy impacts economic efficiency.

They are the first to admit that a centrally planned economy (such as within a firm) can still do economic calculation, provided there is still an outside market available.

Because of the works of Burczak?.?.?.

Seriously though, why would an entrepreneur opt to hire workers if it is more economically efficient to contract in? And please do not bore me with "economies of scale" talk.

But you see, the posse has arrived. LOL :lol: :2wave:

Oh im scared; 40 (and 14) year old virgins are on the prowl:lamo

 

[MaggieD]

I always do my own accounting and taxes. I think that is part of the job of being a business manager. You look at each and every expenditure and each and every sale a lot more closely if the bsuiness manager is the one dealing with the accounting. If I farmed our accounting out (or even to an internal accountant), I would likely not have a good understanding of what makes my company profitable. Even if the accountant provided me with a detailed accounting report, that in itself does little to help me manage my business as accountants are just accountants and generally know little about the specifics of particular industries or the value of particular expenditures. It takes a seasoned business manager with experiance operating a company to correctly interpret financial reports. I've rarely met an accountant who happened to have experiance managing any companies other than possibly their own accounting company.

You're posting as if we disagree. I don't disagree with anything you've said. We're just talking about two very different things. You're talking about your established, successful business. I'm talking about one that hasn't even begun. Until you have income, you don't even HAVE a business. Getting all wrapped up in taxeze is not the way to get clients. Nobody runs (ran) my business but me. I knew where every dollar went and, most important of all, I knew when to ask questions. It sounds to me as though you are that same kind of person -- and that's who most entrepreners ARE. In my business, financial reports were only good for the bank when I wanted to borrow some bucks. I already knew exactly how well my company was doing. Those reports were useless.

Phattonez said: So most entrepreneurs are accountants who like to scope out new demands on the side, instead of the other way around where we have entrepreneurs who like to scope out new demands and maybe do accounting on the side. Seems inefficient to me

.
I have no idea what you're talking about. An entrepreneur is a person with an idea for making money. He's got confidence in himself and his own abilities. He's willing to work hard -- harder than he'd EVER have to work for someone else. And all he needs to start out is a separate checkbook and sweat equity. If you call that an accountant who scopes out on the side, I don't know what to tell you.

 

[phattonez]

Oh this is too cute :razz

Tony refuses to study what he desires to debate, and suddenly i am being bombarded by 40 (or 14) year old virgins. BTW Tony, i have an account at mises.org and made a similar post when i was confronted in such a similar manner. It seems like you are on the right track.

No theory of the firm? - The Mises Community

Suddenly there is something wrong with searching for answers? This seems to be more a matter of pride to you than looking for truth.