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You must have been a poor business person if you would follow that plan. You'd reduce prices when the market didn't demand it?
You'd hire employees before the level of business required it?
And then with higher fixed costs and lower prices you'd expect an increased profit margin?
Wow. Magical thinking, but, I guess at least it's consistent with the Republican faux economic theory.
Actually, with no income taxes going out, I have quite a bit more money than I had previously, with no changes.
Since most businesses sit on the edge anyways when it comes to labor, increasing the number of employees allows for more work to be done.
Since the higher labor and lower prices are zeroed out by the taxes no longer paid, I am still working even to where I was previously.
Lets say I run a small restaurant with 40 employees. If I save 29 $ per employee per week because there is not more federal income tax I have to match, that's $1160 in reduced overhead.
I can put in 1 more employee, and give my others a 25 cents per hour raise, and still be ahead $460.00 a week. Allocate some towards advertising over the month, and a bit towards reduced prices, I can be right where I was, with 1 more employee, better prices, and advertising to promote and grow my business further.
With more business, comes more success.
So you and the others can take your snide comments and lack of vision, and stay with whatever dead end thing your doing.
Anytime your employees are happier, your costs are more than competitive and service better, your business increases. If you have an increase in income because you no longer are paying income taxes, take that money and do something contructive with it, unless your in the toilet already, in that case you have other troubles.
mlassoff You must have been a poor business person if you would follow that plan. You'd reduce prices when the market didn't demand it? You'd hire employees before the level of business required it? And then with higher fixed costs and lower prices you'd expect an increased profit margin?
Wow. Magical thinking, but, I guess at least it's consistent with the Republican faux economic theory"
Hello, lets see, better service and lower prices = bigger market share, which leverages otherwise fixed costs like rent, which means although profit margin percentage will decrease, but profit in dollars will increase if volume increase more than offsets cost/price changes.
1.5 miles from me sits a superb independent Italian restaurant to one side and a good mini chain competitor 2 miles to the other side. The indy began with 1/3 the chain sq footage, now is approaching the same sq footage, did so with lower pricing and higher wages, thus getting a stable, far more skilled , commited staff, and I need not see their books to know the indy is far more profitable. (They just returned from a 3 week family vacation covering several countries in Europe)
The initial business investment is in absolute $, that means the ROI of the indy would be higher. ROI s/b what it is all about.
Actually, with no income taxes going out, I have quite a bit more money than I had previously, with no changes.
Since most businesses sit on the edge anyways when it comes to labor, increasing the number of employees allows for more work to be done.
Since the higher labor and lower prices are zeroed out by the taxes no longer paid, I am still working even to where I was previously.
Lets say I run a small restaurant with 40 employees. If I save 29 $ per employee per week because there is not more federal income tax I have to match, that's $1160 in reduced overhead.
I can put in 1 more employee, and give my others a 25 cents per hour raise, and still be ahead $460.00 a week. Allocate some towards advertising over the month, and a bit towards reduced prices, I can be right where I was, with 1 more employee, better prices, and advertising to promote and grow my business further.
With more business, comes more success.
So you and the others can take your snide comments and lack of vision, and stay with whatever dead end thing your doing.
Anytime your employees are happier, your costs are more than competitive and service better, your business increases. If you have an increase in income because you no longer are paying income taxes, take that money and do something contructive with it, unless your in the toilet already, in that case you have other troubles.
a good way to go, but again it depends on market conditions. if the business is very slow, and employees are standing around due to lack of business, then adding another employee would be foolish. better to bank the extra to better handle poor economic conditions, and if you dont need the money for that, then you will have a big edge on your competitors when business conditions start to improve. that way you can be ahead of the hiring curve, and come out of bad times swinging for the fences.
Bank it, rbohm. LOL! Seriously, the best time to get aggressive is when most others are sitting passively. This is a super time period to take market share away from the pack, who are busy emulating each other. As a contrarian, its a very easy time for a business to seize attention, and if via advertising to do it at bargain basement prices.
D "reduce prices" isn't permissible as a franchisee. You pay a franchise fee to McDonald's based on your profits and if you aren't making enough profits, then McDonald's will yank your franchise license and you and your employees will be out of a job. In order to reduce prices, you will need to get permission from McDonald's. Furthermore, you are required to purchase everything through the commissary system owned by McDonald's and they are not going to discount prices to match your reduced prices.
B "increase management compensation" is most likely not possible, since the franchise grantor will have a fixed package based on your local market.
C "increasing advertising budget" may not be possible. You are often limited to paid advertising to a certain fixed percentage of your sales, and advertising campaigns must often be pre-approved by the franchise grantor. When McDonald's trots out McRibs every so often that is a national advertising campaign and they will pay for that or at least a percentage of that. You are also required to donate money for certain advertising, like to the local high school for football and basketball season when they publish the little booklet with the team roster and photos and such.
E "increasing profits" is a function of payroll. Retail tracks hourly sales and then schedules the proper number of employees to meed the demand. Bad tracking leads to a mismatch and you are either over-staffed (losing profits or you are understaffed (not losing profits but possibly providing bad customer service which could result in lost profits).
A "increasing wages" is not a good option, because once the tax break ends, then what? Are you going to cut wages?
In reality, the franchise grantor will probably dictate policy to you, so you won't have any choice in the matter. If it's Subway, McDonald's, Roto-Rooter, or whatever, the home-office will tell you what you are going to do about the tax breaks, which is probably keep it as profit so you increase the percentage of profits the home-office gets.
Obamacare.
Care to take the challenge?
So far, not one Obama defender on C-D has had the guts. Do you have the guts?
Here's the challenge:
State in no uncertain terms the cost of an employee under Obamacare on January 1, 2014.
If you can do that, you will be the Darling of Wall Street.
I'm connected and can get us on talk-radio, TV talk shows and on the campus and business lecture tour.
My friend, you and I will be rich beyond the wildest dreams of avarice. We will become the 1%.
So get cracking. I could use a few extra $100,000 right now.
State in no uncertain terms the cost of an employee in 2014 if Obamacare hadn't passed.
You're looking for definites? They don't exist. You know as well as I do hiring a new employee in any market conditions is a leap of faith and exposes business to risk.
As a small business it seems to me the SHOP provisions of Obamacare are the only way I will ever be able to offer insurance to employees. Like the overwhelming majority of businesses in the US, I have fewer than 50 employees (I have three atm, but am growing) and the Obamacare mandates won't effect my business. What's the number? 90% of business in the US falls in this category. How big is your business? If its less than 50 people (or 100 in most states) you're supposition is much ado about nothing.
Actually, with no income taxes going out, I have quite a bit more money than I had previously, with no changes.
Since most businesses sit on the edge anyways when it comes to labor, increasing the number of employees allows for more work to be done.
Since the higher labor and lower prices are zeroed out by the taxes no longer paid, I am still working even to where I was previously.
Lets say I run a small restaurant with 40 employees. If I save 29 $ per employee per week because there is not more federal income tax I have to match, that's $1160 in reduced overhead.
I can put in 1 more employee, and give my others a 25 cents per hour raise, and still be ahead $460.00 a week. Allocate some towards advertising over the month, and a bit towards reduced prices, I can be right where I was, with 1 more employee, better prices, and advertising to promote and grow my business further.
With more business, comes more success.
So you and the others can take your snide comments and lack of vision, and stay with whatever dead end thing your doing.
Anytime your employees are happier, your costs are more than competitive and service better, your business increases. If you have an increase in income because you no longer are paying income taxes, take that money and do something contructive with it, unless your in the toilet already, in that case you have other troubles.
That's great. I suggest you go that route and see how it works out in the real world.
I'll keep going making careful hires, responding to market demand and growing my business by expanding market reach.
If companies were collectively long-sighted, they'd recognize the benefit of hiring -- and creating -- a strong consumer class that will continue to buy the companies' goods. THAT'S how you make money. You don't make money by hoarding it in a wealth-chasm economy.
Ladies and gentlemen, I thank you for your kind and insightful responses.
In the context of the replies posted, is Herman Cain being disingenuous in touting the elimination of employer payroll taxes in his 999 plan? Since the consensus here appears to be that employees will see little or none of this replaced tax in the form of higher wages, doesn't 999 represent an economic loss to minimum wage workers?
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