Small Businesses and Jobs

This is a follow-up thought on my last post about being an employee right now.  All of this has sort of led me to take a step back and see the true value of a job and the role that small businesses like ours play in people’s lives.  When you have a successful business you have the amazing opportunity and privilege to create jobs.  A few years ago, I would have said “big deal, if I don’t create a job there are a million other opportunities out there”.  Clearly now, there are not.  According to the US Bureau of Labor Statistics, unemployment rose to 7.6% in January.  That’s a lot of people without work.  Every single job matters.

We’ve managed to go much further than I anticipated without hiring a full-time employee, mostly because we’ve managed to “lean-out” our processes to the point where we can offset our growth with our efficiencies.  Of course, that won’t last.  If we continue our growth at anywhere close to the current pace, by the end of 2010 I don’t see how we don’t have 1 – 3 full-time employees.

At times, the thought of this has stressed me out.  Finding good employees is a lot of work.  Managing employees is a lot of work.  There is a lot that we have to put in place prior to bringing someone in if we want them to have a decent chance at succeeding at their job.  But now, like I said above, I see this as a great opportunity and a privilege, and in turn am now very much looking forward to it.

We will be able to provide a living for someone who otherwise may not have had a job.  They will be able to take care of their family because of the job we created.  We will have the opportunity to continue to grow our culture in a way that makes everyone feel good about coming to work.  I’m looking forward to paying for their health insurance and providing them with a fair salary.  I’m looking forward to listening to their ideas.  I’m looking forward to making sure that that they know that I/we value their work and that we couldn’t succeed without them.

So many companies get it wrong and treat their people as if they are just “things” that can be tossed around.  They do it solely in the name of profit.  That’s how they justify it.  I don’t ever want to do that.  A person is a person, just like you or I.  They should be treated like the equal that they are.

It might be this year or it might be next year, but whenever it is I can’t wait to take on this challenge.  Even if it is just one employee at a time.

10 comments on Small Businesses and Jobs

  1. Rob says:

    Wow, what a strange coincidence.

    I’ve just spent the whole day on a course called “Paying your employees”, a class run by HMRC (UK version of IRS) all about how to employ people, make their tax decuctions, pay their benefits, sick pay, data protection and lots of other crap.

    It’s exciting to be growing our small business to the point where we’re having to take people on, but so stressful and foreign trying to understand our obligations and the legal implications of everything. I can see why lots of people pay cash in hand – if not for the tax reasons (which there aren’t any really if it’s a small amount – no tax would be paid anyway) then more for avoiding the beaurocracy of it. Form P45/1, P11, P38S, P11, P46, P14 and lots of other such helpfully named vitally important documents we’ll have to track, produce, file, store for 3 years (6 in reality).

    So there’s some great free software which will do everything for us, brilliant! Except for one thing, It can only handle 9 employees at a time – useless for us (we’ll likely employ many people at a time but only for short periods of a day or week). Instead we’ve got to do everything by hand, copying from little boxes and summing columns. Or we could pay £800 for payroll software. Or we could outsource our payroll and pay through the nose.

    Although I agree that yes, we are in an amazing position to be able to positively influence someones life and give them a living, by god it’s going to take a long time to get everything clear & sorted.

    As for actually finding the people to hire, we’ve had some really good responses from some well placed ads, but found many people to be surprisingly flaky in the current situtation, or foregin without work permits, or unable to commit to the hours we want, or not fitting the job spec we’d posted or just general timewasters.

    It’s a huge challenge, and a very steep learning curve, but once we’ve got over the initial hurdle I can see it being one of the most rewarding things I’ve ever done.

    Best of luck with your business adventure, and thanks for bringing us along for the ride.

    –Rob

  2. Adam McFarland says:

    Rob –

    Thanks for the great comment! You’re entirely right, that’s the other side of it. There are SO many legalities involved that it is a super stressful process, not to mention just trying to find someone that is qualified is a monster job in and of itself. I’m sure I’ll have some crazy experiences to blog about when the time comes 🙂

    Keep up the great work with your biz! You can tell from your site that you do A+ work.

    Adam

  3. Max says:

    Although I agree with you about the privilege of having a business successful enough to require creating jobs, there’s too much unhealthy emphasis on *jobs* nowadays.

    Jobs represent TOIL. Focusing solely on jobs is like saying “screw all this indoor plumbing, I NEED to go out to the well for my water and the outhouse for my toilet needs”.

    We’re hearing this from TV and radio — jobs, jobs, jobs. But no one is talking about what they really should represent — PRODUCTION. The ultimate goal is to be so productive, no one will *need* any jobs!

    Your business has hired someone to help out because you’re *not productive enough* by yourself, and therefore, need someone(s) to help with producing.

  4. Adam McFarland says:

    Max –

    Completely agree. And that’s why we haven’t hired anyone yet – we have been and still are very productive even though we’re growing pretty fast.

    From my limited corporate experience, it seemed like most people were operating at about 30% productivity. I’m not saying they needed to work more hours. They probably could have worked half as many hours and gotten more done if they just focused (which you’d think they’d do if they cared more, but some people care and are still lazy). There needs to be an overall adjustment in attitude: if you’re not willing to work hard and provide value, you’re not going to have a job in this economy…so you better be willing to be productive for your company.

    Adam

  5. nethy says:

    Hi Adam,

    I hope you don’t mind me taking a slight tangent. Max’s comment got me thinking.

    You seem to have come to the game with the concept of a business having/being at it’s core a collection of employees. Bigger company = more employees. More or less anyway. That’s by no way a criticism. It’s standard & probably holds true the vast majority of the time. But I’ve been following your blog for a while & it seems you enjoy exploring all sorts of slightly ‘out there’ concepts. Seeing what sticks.

    Take this thought experiment: You cannot have employees or you are very limited in the number of employees you can have.

    What sort of efficiencies could you get that put off hires by another while? What if you could spend a lot of money?

    How would you grow without hiring?
    What could companies rather then employees do? What could be outsourced? What would you absolutely insist keeping in-house?

    What sort of services are out there that might come into play? I’ve always been curious about services such as these: http://www.amazonservices.com/content/fulfillment-by-amazon.htm?id=hm1

    Would you grow at all? Would you need to scale back the number of sales you make? If you did, maybe there would be some savings in areas where the per-sale costs of advertising are high.

    It might be useful just as a thought experiment. Gives you a framework to research the odds & ends that are probably handy to know about. Also makes you think about what elements of your business are your business & what elements are peripheral.

  6. Adam McFarland says:

    Nethy –

    I think it could work. If I was a solo-entrepreneur and didn’t have a physical product to ship, I would definitely take that approach. You can outsource pretty much everything, so it would just be a matter of managing it all. I’m assuming if you had a big enough account, your outsourcing company would assign you a “rep” who would go above and beyond to ensure your orders are executed correctly, in turn (hopefully) minimizing the time you’d have to spend managing.

    As far as the fulfillment by Amazon, we looked into it and it seemed far too expensive even considering all that they do. Amazon calls/emails us all the time trying to incentivize us to switch, but we obviously won’t. For better or worse, we have our warehouse and our lease, and we’re moving forward with our biz as if we will always have a physical shipping location. I’d have to do the math, but I think a regular dropshipper would be more cost-effective than using Amazon (and seemingly less work).

    But I would love to see an experiment by someone to see how far they could grow with only one person. A very talented entrepreneur could probably get pretty far. Of course, the business model has a lot to do with it also. If each customer is service-intensive, it may not work (then again, you can outsource customer service…so maybe it could). Interesting to think about though 🙂

    Adam

  7. Rob says:

    Lots of interesting points raised here!

    I think it’s important when creating a company to decide what you want. Different companies may be heading in different directions or have different ultimate goals even if they ship the same products / services and look the same to the consumer.

    Personally, I work in a service-based industry. In a service industry it’s very difficult to do away with staff (wheras I think it’s somewhat easier if you’re suppling or manufacturing items, though that may be niave on my part!). Lots of what we do is personal interaction, building trust, being friendly and delivering an A+ product. We’ve spent a LOT of time optimising our workflow and equipment to keep costs down and minimise staff required but delivering the service well is still something I can’t do alone. There are probably other niches out there where I could go it alone, but this niche is where I’ve decided to start.

    When we started the company we weren’t really sure what we wanted, just sure what we didn’t (9-5 jobs!) but now it’s clear that we want to provide an unmatched A+ service, to make people feel great about themselves and to have the company become independent of us (as the founders). ie. put the right workflows in place and get the right staff so that I can go on vacation or just kick back and everything doesn’t fall apart. THEN we’ll have created a company, not just something that constrains us in the same way as many jobs.

    What do you want out of your company Adam?

    –Rob

    PS. Thanks for your kind words Adam 🙂

  8. Adam McFarland says:

    What do I want out of my company? What a question 🙂

    There’s not one particular thing, but I’d say a handful of things I really want out of our business (which sometimes I think is overly ambitious, trying to squeeze all of this stuff out of 1 company):

    1. I touched on it in this post – being able to provide good jobs. I see that as especially important right now.

    2. The same goal you have of becoming “independent” of the business. Putting the systems in place so that some day we don’t have to do anything on any given day that we don’t want to.

    3. The opportunity to innovate. My mind gets bored easily, so I need to have new and exciting challenges all of the time. So far in life, running a business is the best way I’ve found to satisfy that need.

    4. Much like you said, be known for A+ service. No customer or vendor interacts with us without going away feeling better for having worked with us.

    5. Use the company (and this blog) as a tool to create a second career in the non-profit sector. We’ve sort of started that with our Commerce with Conscience program, but I’d like to set up an entire group of web apps that have a sole purpose of improving people’s lives or collecting money for causes I believe in.

    I *think* that’s it. While they may change a bit from time to time, I think that for the most part those goals align closely with who I am so I don’t see them changing all that much.

    And obviously all of those things require us to be profitable and continue to grow.

    Great question. Really made me think!

    Adam

  9. Dale says:

    Adam, you should send a copy of this entry to President Obama and tell him this is RIGHT way of creating jobs, versus building bridges to nowhere.

    Hat off to entrepreneurs like you who will jump start the economy!

  10. Adam McFarland says:

    Haha thanks Dale “building bridges to nowhere”. Classic.

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