Monthly Archives: February 2014

Job Stands For Just Over Broke

Companies are in business to make a profit.  It’s really that simple.  Part of the profit scheme entails, using other people’s talents, skills, and abilities to make money.  So, in order for a company to make a profit off its employees, the company has to pay the employee just enough money to keep the employee coming back for more, so to speak.  This arrangement is an agreement that the company provides employees with and (usually)a steady stream of income, in exchange for the employee giving the company his or her time and labor.

Now, on the surface, there is nothing wrong with this business model.  It is part of the way that capitalisim works.  The business owner will pay the employee what he or she thinks the employee’s time is worth.  The business owner will also consider how much money the business generates, minus the business expenses (overhead, taxes, insurance, etc).  It stands to reason that the owner or executives will pay employees the least amount of money possible for a given job, in order to have a higher profit margin.

For instance, a moving company hires two employees, paying each one $9 per hour.  The owner/manager of the moving company charges a couple $1,500 to move the contents of their 2 bedroom  apartment.  The process takes an entire 5 hours, using only the two employees.   The owner of the company paid the two employees only $90 total for their labor, but the moving company received $1,500 from the couple.  Even after operating costs and expenses are deducted, the company still manages to make a decent profit.

Years ago, a prior employer gave me a 20% raise, since I was doing “such a great job”.  This sounds higher than typical, but a 20% raise only turned out to about $1.8 cents more per hour.  I am very certain this is all that my former supervisor was able to offer me.  The department had a certain amount of money alloted to bonuses and annual merit increase.  So, I feel that she was being truthful.

At the same time, I feel that the company executives are full of baloney.  They leveraged all of my hard work,  and paid me pennies for what they made off of me.  I don’t harbor much resentment, because that is the way that business works.  I understood this when I accepted the position.  That main point that I am driving at here, is that when you work for someone else, they put a ceiling on what you earn as their employee.

My philosophy about jobs is this:  Unless the job is a high paying career or profession, it is really just a means to an end.  A job is a parking space, until you can move to a parking space that gets you closer to your destination. You should take a job, knowing that your tenure there is not gauranteed and knowing that you will not get rich from it.  Do your best when working for someone else.  Do the work that your boss pays you to do (and perhaps then some to keep your job). But, always be looking for a side hustle and plan an exit strategy in advance.

My Experiences With Day Labor Employment Agencies

This post is pretty random, but something that I had thought about recently. Several years ago, I was having difficulty finding steady employment.  I looked everywhere, for any type of job.  My thinking at the time was, “A job is a job”.  So, I didn’t have any specific preferences for the type of work that I would be willing to do.

I happened to have a conversation with a friend about places where I could find work fairly fast.  He recommended a few day labor employment agencies.  I won’t call out any particular company names, since I am not trying to demonize any of them.  A couple of names probably pop into your mind when I say “day labor”, so you probably know which companies I am talking about without me having to call out names.

Well, I visited about three different agencies over a period of about one month.  Let me tell you, I didn’t get a very positive impression of some of the types of people that do work for these companies.  I am not saying that the people that work for these places are bad or beneath me.  Some of the people are actually normal and were just down on their luck and desperate for work, like myself.  But, the majority of the people that show up for work seemed transient or even shady.

At one of the companies, I walked through the doors and then slowly backed out.  As soon as I cast my eyes upon the crowd that was there, I had a bad feeling about it.  Although I try not to be judgmental of others, most of the people there looked and acted like recovering crack heads and alcoholics.  I was liked “Hell motherf%%kin no!”

So, a few days later, I got up at around 4 a.m. and arrived at a different day labor employment agency.  I arrived on location around 5:30 a.m. in the morning.  The management at these companies will tell prospective employees that they get their best shot at landing a gig, by arriving very early.  When I arrived the place was not open, but there were already about 20-30 people waiting.  The business didn’t open until 6 a.m., so we had to wait roughly half an hour.

As with most of these types of employment agencies that I visited, there was a bizarre mix of people present.  People from all walks of life, were waiting for the opportunity to get some work.  Most of the people were men, with only a few women.  More than half of them appeared to be people on the margins of society, like recovering dope fiends, the homeless, possible ex-offenders, and the mentally ill.

There was this one man out there waiting who started asking me some stupid questions.  He was trying to feel me out and learn whether I had a boyfriend.  He caught me off guard by offering to buy me a loaf of bread.  He must have figured out that I was in a real financial bind, since I was there searching for work.  I just told him to mind his own business and walked away from him.  This was someone that I would never consider dating.

One dude, who was outside waiting for work, spent the better part of 15 minutes, swearing, insulting others,  trying to provoke other people to fight. It was apparent that this man was either possessed by a demonic force, psychotic, or inebriated.  If I weren’t so desperate for work, I probably would have done a 180 and hauled ass.  I silently prayed to myself for God to protect me in the midst of nutcases.  I decided to suck it up and take my place in line.

One thing that sets day labor employment agencies apart from others, is that the jobs aren’t usually long-term assignments.  Workers may be able to land a LOW PAYING job for a few days or a few weeks.  Also, jobs are doled out on a first-come, first served basis.  Plus, workers get paid the same day that they complete their work.  This makes it very attractive to those in desperate need of cash.  The agencies can assign a variety of tasks to workers, but the type of work available normally falls under the categories of “skilled and unskilled manual labor” (construction work, cleaning, etc.).

I filled out an application, put my name on the sign in sheet, then sat and waited for my name to be called for a work assignment.  From early on, most of the assignments were given away to the regulars.  I sat around and waited about 6 hours for available work.   During that time, I got to know a few of the other people that were there waiting for work.

Their stories were varied and interesting.  One man that I talked to, came originally from New York with the hopes and promise of a better job.  The job that he was promised, fell through and he ended up homeless and destitute.  The thing that struck me about him, was his resilience and seemingly good nature in the face of adversity.

He was the person that put me up on the game there.  He told me that I was probably wasting my time there looking for work, and referred me to some other places where I might be able to find work more suitable for me.  The game was that, “the favorites” usually got first dibs on jobs, then everyone else got what was left over, on a first-come, first served basis.

To make a long story short,  I continued to visit this day labor agency, every day for the next three weeks.  I was not offered a job once.  My conclusion was that it was a waste of my time, so I stopped going there.  I am not advising anyone to NOT go to these places to seek work.  There are people that can luck up and find a good long-term, lucrative hustle through day labor agencies.   I am saying that these types of places aren’t for everyone, especially not me.

© Copyright 2014 Susan Broadbelt

Start a Business with Little or No Debt

I was watching an interview of billionaire Mark Cuban by Bloomberg, about business.  If you are a basketball fan, then you probably know that he is the owner of the Dallas Mavericks.  He is also an investor on the reality show, “Shark Tank”.  All of that aside, he said something during his interview that goes against the grain of what novice business owners probably think about business ownership.  He said, “First of all, if you’re starting a business and you take out a loan, you’re a moron”.

Mr. Cuban was a little harsh and abrasive in his wording, but in general, he is correct.  People spend too much money getting their business started.  They put themselves heavily into debt and deplete their savings in order to get their business started and to sustain it. Depending upon the industry that is entered, a small business can be started with little or no money.  Some types of businesses may require a small loan in order to get started, but it is not very wise to take on massive amounts of debt.

Should a new business owner decide to incur debt to start a business, these conditions should exist prior to starting that business:

  1.  The business owner needs to have a very thorough understanding of the market that he or she is getting into and the competition.  In other words, do the research.
  2. The business owner needs to have a solid plan and objective for the business.  Some people manage to fake it until they make it, but this is not typical for a successful start up. In other words, know what you are doing.
  3. Have some customers willing and ready to buy.  In other words, if you take out a loan to start up, you better make sure that the business will generate enough money to cover your business expenses and living expense.

The idea that you must use OPM (other people’s money) in order to start a business, is an old, outdated idea.  The first few times that I heard the words, were from Donald Trump’s lips.  OPM is usually borrowed money from banks or investors. Honestly, I don’t think that this idea works too well in this economy (for small business owners).  Banks are hesitant to loan money to individuals or businesses unless the loan is backed by good credit, a high income, and/or valuable collateral.

There is a common misconception that a business should be some sort of complicated, sophisticated operation.  Nothing could be further from the truth.  I think that this myth is a major factor in why people may believe that going into debt to start a business is the norm. A successful business could consist of just one person or a small group of people.  If you dream of running a mega corporation, then start small, set some of the business profits aside and parlay some of your profits into bigger and better projects.

The basic key to starting a business with little or no money is to start small and make sure that you minimize business expenses and overhead.  So you should try and avoid or minimize spending on rent, utilities, and unnecessary niceties that give you the illusion of business success. That is why a home based business is one of the least expensive forms of business.  You could even make your “office” a Starbucks and a laptop.

Another way to start a business with little or no debt is through forming partnerships, outsourcing and bartering. In all of these business relationships, you are basically leveraging the power of other peoples’ efforts.  It may also reduce dependence on full-time employees. This will save a lot of time and money.

A nice quick-read, that delves into starting a low-cost business is “The $100 Startup”, by Chris Guillebeau.  It lays out an easy to follow blueprint for starting a business by serving others and providing value. Most of the people that he interviewed for the book, were “unintentional entrepreneurs” , who started a successful business with under $1000.  There are plenty of jewels and nuggets throughout this book.  If you don’t learn anything else, know that the author’s definition of a business is this:  offer a product or service (of value), that people are willing to pay for, and have a method to be paid.

Link to the video that I refer to:

© Copyright 2014  Susan Broadbelt

Be Mindful of Who You Form Partnerships With

Partnerships can be a great way to start up a small business with little or no upfront costs.  In a partnership, the business expenses and risks are typically shared between the partners.  They are also a great way to capitalize on the talents and resources of other people.  Every individual in the partnership should have some form of value to bring to the table. 

Running a successful business requires the ability to manage your own skills, talents and abilities in the best ways possible.  However, you can’t do it all by yourself.  Business owners are responsible for many roles:  Creating or finding products and services to sell, marketing, leading employees, customer service, managing business finances, etc.  There are only so many hours in the day, and one person can’t expect to accomplish all of these tasks alone.

Therefore, forming alliances with people that share the same work ethic, ideals and objectives is helpful.  Burnout is inevitable for the business owner that thinks he can “do it all”.  Trust in partnerships is essential as well.  I have heard many sad stories about unscrupulous business partners, who swindled unsuspecting investors and partners out of their money and time.

Several weeks ago, I spent some time with an old friend, who I will call Alice.  She made a proposal to me, that we should become partners in a new business venture.  On the surface, the business plan that Alice proposed sounded good.  She claimed to have access to a steady stream of business.  There were a few things that made me feel quite reluctant to enter into any partnership with her.

For one, Alice is spreading herself out to thinly.  From all that she explained to me, it seemed that she had way too many projects going than she could handle.  She runs a consulting company, community outreach projects, a religious ministry, retailing business, and many other things going.  In essence, she spends most of her days, busy doing nothing.  Her time is consumed doing tasks that are neither effective, nor productive.

On top of that, Alice didn’t appear to be very happy in her personal life. I observed the way that she and her husband interact with each other.  I don’t want to go much into detail, but it is obvious that she has marital problems and financial stability problems.  Also, she is not taking time out to properly care for herself.

Her marital problems may be a major source of distraction and stress.  Alice’s husband is very domineering and psychologically abusive.  Years of marriage to an abusive spouse, can have a negative impact on a person’s self-esteem and self-confidence. I didn’t want to be intrusive or overstep my boundaries with Alice.  I reserved my opinion on that matter to myself.

During the course of our conversation, she admitted to me that her consulting business is not profitable. She doesn’t have enough clients to earn a full-time living from this business.  Another, thing that was unsettling to me, is that this consulting business may border on engaging in unethical activity.  I won’t discuss exactly what she does in her consulting firm. From what she described, there was nothing illegal about her business activity.  However, there is the potential for her to end up in legal hot-water if she makes any documentation errors.  I pointed this out to Alice and she became very defensive, so I changed the subject.

Alice is not a stupid person by any means, but she seems scatter brained at times.  She doesn’t properly plan things out in her daily routine and ends up wasting time and money as a result.  My advice is that she should focus on making adjustments to the core consulting business that she is already running.  Her time is better spent figuring out what she is doing wrong, and how to boost profitability in her current business.

When entrepreneurs lack laser focus in their core business, this is a detriment to their business.  They run the risk of being ineffective and providing mediocre to poor quality products and services to their customers.  This in turn will ruin the reputation and good will of their business.  It’s no wonder that she has problems with customer retention:  They are probably just as confused as she is and dissatisfied with her service!

I spent the better part of an hour brainstorming with her on ways that she could market and improve her business.  I emphasized that she would be much more effective and productive if she were to become an expert in a handful of core skills, rather than mediocre at several skills.   I am not sure whether she absorbed this or will act on any of the suggestions.

I get the impression that Alice has not invested enough effort into making her business successful.  She doesn’t have the patience and tenacity required to see her business through until it becomes profitable.  Most businesses fail within the first five years.  Otherwise, it takes at least a few years for many businesses to turn a good profit.

Alice hoped to start another business with me, in order to compensate for her current business failures (I think). She also wanted to take out a loan to start the business, which is not a good approach for the type of business that she wants to enter.  I think that this is a mistake that many new business owners make. They don’t give their new business enough time and room to grow.  Some of them take on unnecessary debt to start a business.

Some new business owners want to start out big and some don’t realize that there is a learning process with business. They become impatient, frustrated, and ultimately lose their passion.  Then they move on to the next get-rich-quick scheme.  It’s a form of “shiny ball syndrome”, really.

Partnerships can be lucrative and positive.  The caveat is that you should choose your partners very wisely.  Going into partnership with the wrong person(s) can be draining, both financially and psychologically.  I wished my friend luck, but politely declined her partnership proposal.


© 2014 Susan Broadbelt