Really?

They met in college and dated for their final two years.  He was a long way from home.  His parents didn’t have enough money to visit during the school year so he never got the chance to introduce her to them.  Consequently, the surprise was even bigger, the disappointment greater. 

They fell deeply in love.  They studied together and were rarely apart, except on weekends when she went home to work.  She never mentioned him to her family, afraid that they would ask her about him and knowing how they would react.  They would want to see pictures and she knew that they would demand an immediate breakup.  He learned about her and about her background.  He worked to understand her beliefs and her culture, how she had developed her opinions.  They adored each other in spite of their vast differences.

He told her of his own childhood and how his had only first been exposed to her culture at sixteen, how he had kept shaking the young boy’s hand, fascinated, wanting to touch him, to see how his skin felt, trying to discover a difference.  His family was deeply embedded in its own culture and he had rarely had the chance to get to know a different one.  And now, he wanted to spend the rest of his life with someone so completely outside of his own world.

Graduation day arrived.  His parents and grandparents came to the ceremony, so proud to see their son in cap and gown.  Her parents were there as well, excited for their girl who was the first to get a university degree.  Their families still had not met, or heard of the relationship.   

They decided to spring the wonderful surprise of their engagement on graduation day.  Both were nervous, knowing that they might face some negative reactions and yet forever hopeful that everything would go well.

The plan was to meet at a local restaurant, sit at adjoining tables and introduce each other.  He arrived last, family in tow, and took the table next to hers.  He brushed her shoulder as he walked by, smiling at her.  His parents noticed and shook their heads as they sat.  In a loud whisper, his grandmother asked “How can you know someone like that?  And why are they allowed in this restaurant?”  He was shocked at her disgust.  His parents nodded in agreement, barely containing their anger.

Finally, though, he signaled to her that it was time.  They both stood and moved together, ready to make the announcement.  Both family tables became silent as they watched them take each other’s hands.  “Mom, Dad,” he said.  “This is Sarah.  I’ve been dating her for the last two years and we are engaged to be married.” 

A shocked silence followed.  His grandmother stood, almost knocking over the table.  “You will NOT do this as long as I am alive,” she shouted.  “My grandson will never have a Liberal as a wife!” 

Her family stood.  Her father sneered at his grandmother and said, “Don’t worry.  It will never happen.  Your kind will never share our table, our home or a scrap of food with us.”

They turned and hurried out of the restaurant, their daughter in tow.  She looked back with tears in her eyes.  That was the last that they saw of each other for many years.

“Seriously?” you ask. 

Think about it.  In our haste to make sure that everyone has to get along with everyone else, we seem to have forgotten that we are all essentially human, that opinions divide us far too often.  In fact, they divide us far more often than race, culture and country.  Amazing, isn’t it?  And sort of silly in my own personal universe. 

With that in mind, I wish you a Merry Christmas, Happy Hanukkah, and happy holidays.

The American Dream

I have listened to a lot of radio since the election.  I’ve read a lot of articles online and heard all sorts of opinions too.  It helps to have perspective.  Sometimes, it even helps to have a little knowledge when forming an opinion.  I also have the rare but welcome inspiration that allows me to propose the occasional hypothesis. 

I was reading about strategic mistakes made by the DFL Party during this past election cycle.  One of the proposed errors caught my eye because it was a comparison between the two candidates’ core message.  On one side, it was “Make America Great Again”.  The DFL proposed a series of ideas regarding jobs creation, education, and getting more people into the middle class.  The proposal centered loosely around the idea that the DFL would build “an economy that works for everyone, not just those at the top.” 

Yes, the most outstanding problem is that the message was way too complicated.  It’s far easier to grab onto a slogan.  Regardless of your political leanings, slogans work. 

Today’s brilliant inspiration derives from the more complicated message.  It seems to explain some things.  Or maybe I had too much wine last night. 

The real message here has to do with the disappearance of the American Dream.  In fact, I doubt that many people actually hear those words these days.  My baby boomer generation grew up with tales of rags-to-riches business types.  If those didn’t hold our attention, there were still plenty of retirees around who were living just fine off their savings and a social security supplement. 

What always fascinated me, though, were the stories of people who put their hearts and souls into their small businesses and then one day sold them for a good sum of money and retired to live a wonderful life in some nice tropical place.  The hours of labor and the small salaries during their working years paid off.  Even more plentiful were the stories of immigrants who took whatever menial job they could find, saved carefully, raised children who became doctors and lawyers and eventually retired to enjoy the rest of their lives with their grandchildren.

That was the American Dream. 

The Dream disappeared during the past thirty or so years.  About five years ago I discovered that my business would not be worth enough to allow me to sell it and retire.  There is no more capital gains reduction, no more income averaging.  Selling a business has become complicated and is worth a whole lot less than it used to be. 

This led me to realize something about the current generations going into the workforce.  Young people are being educated.  They are being encouraged and they are being told that we need them.  They are not being given a Dream.  They see their working life as something that won’t be a joy.  When we of my generation run into snags or start getting burned out because of the long hours, we look ahead with some small remainder of that wonderful Dream and say ‘Don’t stop now.  Retirement will bring a great future.’ 

These days, our children know that Social Security will be running out, that there is very little profit sharing happening in companies and if there were, they’d be taxed to death on it.  Instead of working long and hard for an employer, they are mobile, not loyal and they tend to see work as a means to a pleasant trip, enough money for the weekend’s entertainment, or some other personal pleasure.  It is absolutely no wonder that less effort is put into the day’s work. 

It is no surprise that we allow manufacturing to go overseas.  I no longer wonder why I can’t find reliable young people of U.S . origin who might be interested in the embroidery business.  It’s simple.  I have nothing to offer but work.  I can’t make them rich, give them a share of a very slim profit, promise them the end of a rainbow.  All I can do is tell them that we have schedules to keep, minimums to produce and that we need to run fast to even pay for ourselves.  For them, there are easier and better ways to make money.  Machine embroidery is no one’s passion.

Millennials and so many others do not deserve to be blamed for their attitudes.  We tried to give them a work ethic.  We forgot to tell them that there could be fun at the end.  Or in the middle.  Instead we suggested that life pretty much sucks these days. 

Maybe we should try a slightly more positive approach to our grandchildren.  Maybe we should try figuring out how to recapture the American Dream.  

The Easy Way Out

It seems like the popular thing to do these days is to ask rich people to pay more taxes.  I hear the shouts that ‘They don’t pay enough!”  As a former CPA who did a lot of very rich peoples’ tax returns, I can tell you that those people will never pay as large a percentage as the average American.  Get used to it.  Never gonna happen.

You can tax rich people.  They’ll leave or expatriate their incomes though.  They will look for, and find, loopholes that reduce their taxes.  They will never pay what you would expect them to pay.  And the economic bottom line will be that instead of getting a rich person to be more supportive of the government and those who are less-rich, they will become more reclusive and less participative.  Or they will use their income to generate more power and control over the government. 

Regardless, the less rich will always cry out against the more rich.  The poor will be angry with everyone.

There is also no way to eliminate competition, either physical or economic or mental, and still have people.  We grow due to competition.  There is always someone out there in the world that we want to beat.  More often than not, there are always many people that we want to outcompete.  There may or may not be animosity involved.  There is always some jealousy.  We don’t get better by doing less than the next person. 

I can understand the desires of the less ambitious folks in our country.  They are competing by working to slow other people down and by discouraging them to work less.  Who hasn’t heard the phrase “Hey, slow down.  You’re making the rest of us look bad.”  I hear it sometimes in my shop, much to my own personal dismay.  Those folks don't last long, by the way.

This attitude seems to have gotten worse during the past few years.  The outcry against the very rich has actually been translated into proportionately higher tax rates for that class of people.  It is a tragedy. 

The less ambitious are working side by side with the less rich to raise minimum wages, create a shorter work week and allow for more paid vacation and family leave.  Corporations should pay for all of this because they make lots of money.  Oh, and the big rich companies don’t pay a lot of taxes. 

The outcry does not consider the fact that small businesses, who are in the less rich category, comprise nearly fifty percent of the work force and create nearly sixty-four percent of the new jobs in this country.  (SBA FAQ) Every new tax and wage hike and family leave allowance that is imposed on the large corporations takes a much larger toll on the small corporations.  It is no wonder that new business startups are falling behind business failures (Gallup Business Journal).

The past couple of generations of people in this country have subscribed to the idea that we can take an easy way out.  We can just vote for higher taxes and higher wages and more vacation.  Social media says that will solve our problems.  Thankfully, I am not part of the latest generations.  I really don’t want to see the consequences of the easy way out.  For my part, I’ll keep my head down, manage my small business and keep people employed for as long as possible.  And hope that I can survive the easy way out for long enough to get at least one or two days of retirement.      

Out in the woods

Today we get a story, fun, and an observation.

    

A good friend, Pete, has a small vineyard in his back yard.  He grows about a ton of grapes each year and when harvest time comes around, it is an excuse to have a big party that he calls the “Grape Stomp”.   It is a big potluck and during the day much wine is consumed while people are given sharp instruments that are used to cut grape clusters from the vines.  Once the grapes are all cut, at previous stomps he has put out small tubs for the kids to stomp grapes in.  Each year, the kids get a little bit bigger and the bins look a lot smaller.

Pete has been seeing something a little bit more complex in his mind for the past couple of years.  He described it to me by saying that he wanted something like a floor and walls surrounding maybe a wading pool where people could stomp a little bit better.  He loves to have everyone participate. 

His description produced a picture in my head of a rickety little disposable framework surrounding a plastic pool where adults could walk on grapes for some time, maybe fall down a few times and have a laugh or two.  So we made a date to get this thing built.

The day before we were to stay, Pete picked up the wood and texted me the directions to the place where we’d be building it.  His friend would be helping us with it. 

I escaped work early, and followed his directions out into the country, to the end of a gravel road, down a long driveway bordered by electric cattle fences. I arrived at a 10,000 square foot fully equipped professional wood shop.  Turns out that Pete had enlisted the help of a master cabinetmaker who does a little bit better than simple rickety frames.  Pete’s friend is a perfectionist who uses nothing in the way of hammer and nails.  He works with beautiful reclaimed wood.  The cabinet maker was designing a rather unique grape stomping barrel.  Pet and I would be doing the work, milling reclaimed telephone pole cedar and reclaimed white oak into the sides and floor.  The cabinet maker would instruct and direct.  The barrel would be five feet in diameter and would be water tight, all made without use of a single nail or bit of glue.  We finished our own wood, routered it, sanded it and cut every single piece at a custom angle.  When it was done, it was an actual round circle.  It was beautiful!

It worked, too.  People had a ball stomping grapes in it and getting all purple.  The day was deemed a success and there were lots of photo opportunities for all of the partiers. 

Our project took me to places where the true backbone of the United States still resides.  In order to get wood, we visited a pallet maker.  She builds them out of old cedar telephone poles by cutting them up with a giant band saw into planks that are then sized and nailed together.  It is really hard work.  She does them by herself.  She is off the grid.  Try as hard as you can, you probably won’t find her.

We picked up some metal strapping to hold the barrel together from a similar business that custom builds gates and metal fencing.  And, of course, we did the project back in a spot that is completely out of sight.  These are people who aren’t voting in the current election.  They’re busy working.

These are people, though, who are the first ones to jump to your aid, to defend their country and protect our rights as individuals.  There is no negotiation prior to doing these things.  The folks that magically make pallets full of food and beer and products appear in the stores don’t ask for anything more than the selling price of their products.  That’s it.  No handouts are requested, no free benefits are needed.  Helping someone is just exactly that.  You never hear “What’s in it for me?”  They already know the answer. 

This is the backbone of the United States.  There are no races here and there is no difference between working men and working women.  Much of this backbone consists of immigrants and first generation U.S. citizens.  Their parents or grandparents studied and became U.S. citizens, and most were treated far worse than the immigrants of today.  They didn’t get welfare or free medical care and they had to take menial jobs to survive.  They learned to depend on their own resources because help was out of their price range.  Today they pretty much build our country. 

I really don’t think that most people realize just how amazing this subset of our country is.  They do still build things around here.  Pallets don’t come from pallet factories in Mexico.  Cabinets don’t all come from the sales floor at Home Depot.  Someone actually makes this stuff and then has to sell it.  Lettuce does not come from the lettuce factory.  And meat is not created already in the package.  Someone had to feed it, grow it and butcher it.  Those people aren’t well paid and they can’t afford a new iPhone every six months.  They pay for their own health insurance and don’t quite understand why we need free trade agreements with neighboring economies.  After all, we can build it ourselves if we put our minds to it. 

Ah, well.  Time to go home to my suburban house.  Time for a glass of wine while I sit and appreciate the fact that I crushed the grapes that made the wine.  With my feet.  Maybe.

No Shows

Toby Keith wrote a song called “How Do You Like Me Now?”  It’s about the one thing that every single nerdy high school boy who has been stood up, laughed at or otherwise belittled at the hand of the beautiful Prom Queen.  Oh, don’t forget the girlfriend, or boyfriend who dumped us one day just because it was cool to do that.  We had dreams of revenge, not least of which was that they would call in desperation one day to say that they had made a terrible mistake and we were the one mate for them. 

Oh, I remember all of that so well. 

Two weeks ago we put an ad on Craigslist advertising for someone for the shop.  We had numerous applicants, belying the statements that low unemployment exists in Minnesota.  Many, if not all of the applicants were underemployed if not unemployed.  I felt that we had a fairly good group from which to choose.

Hiring people, though, is no fun.  I’ve met very few people who say that hiring and firing is a great occupation and that screening applicants is incredibly rewarding.  It is, in fact, tedious, difficult and even after practice, I always feel as though I’m just tossing the dice.  Employment firms cost way too much money and they have never really provided us with a workable solution in any case.  Most of the time, the applicants are just looking for a paycheck and we really want more from an employee.

I scheduled seven interviews.  

This is where my reference to Toby Keith and the hopes and dreams we had of teenagers kicks in, sort of in reverse.  Hey, I think it’s valid enough that I am going to write about it regardless of what you think.

Three of the interviewees were no shows.  They didn’t even make it in.  One of the three called the next day and said that she was really sorry, that she’d forgotten about the interview but would be happy to schedule any time during that day.  My answer was firm.  “Nope.”  Don’t make me explain myself.  How important can making a living be if you can’t even remember your interview?

I hypothesize here that the no-shows were simply burning us in advance because they figured that we would not hire them in the first place.  Instead of waiting and, say, covering the front door with teepee or throwing rocks at my car or maybe even spreading the word that I’m a rotten person, they burned us first.  I wasted time, I was hurt that someone thought so little of me and of my time that they felt it necessary to show me how low on the priority pole I really was.  I wasn’t even looking for a date!

So that’s out of the way.  Now we can get down to actually giving you the answer to the question you are asking in your head.  Yes, we did hire someone.  She came in for the interview, came in for a second one, was in the shop for two days, then called in sick for two days and quit the following Monday.  True story.

So now we have a second person coming in.  I’m a little nervous about this.  At the same time, we are rolling the dice again and we will take even a full week at this point.   Actually, I would like to make it clear that my hope is that we hire once, that she stays with us and that she turns into a strong and productive member of our team.  We will work hard to help her accomplish that. 

Now I need to find some embroiderers.  Yeah, that’s going to be fun. 

Play it Safe!

One of my friend’s sons is studying ‘Entrepreneurship’ in college.  He wants to get a degree in it.  I am happy that the university is offering an opportunity to study something besides Neo-European Obscure Literature in Funny Languages, although I understand that the major is making a comeback.  We’ll be flooded once again with people who have to choose politics as their means of support because they are otherwise unemployable.  I do hear that the Ministry of Silly Walks (Monty Python???) is hiring.

I didn’t realize that one needed to study and get a degree in order to be an entrepreneur.  This is a very confusing major.  Entrepreneurship is not a profession and it really isn’t a science.  It must be a liberal art, in which case I hope that the prerequisite English classes teach them how to write decent emails. 

Entrepreneurs usually start out with a product, service or pitch that they want to sell.  They have a strong belief in the product, and a stronger belief that they are the ones to push it.  They take on the responsibility to solve problems, support their families and they risk their own capital.  They are willing to work long hours and perform all sorts of non-executive work.  Above all else, successful entrepreneurs learn as they go and spend a lot less time blaming other people or ‘circumstances’ for any failures they might endure.

I’ve observed the successes and failures of businesses over many years.  I find it interesting that the failure rate of businesses does not seem to relate to the existence of a degree in entrepreneurship.  So why do we have such a thing in the first place?

Years ago, we had lots of choices if we just wanted a degree.  We could choose from such wonderful options as Art History, Geography, Political Science, English Literature or my personal favorite (because they made it up just for me in order to get my sorry butt out of college), Mathematical Ecology.  It didn’t cost much to go to college.  When we finally made up our minds about what we wanted to be when we grew up, we went back to grad school, or just went to work.

Today, it isn’t that simple.  College costs a fortune.  The general hope is that the student will graduate one day and have enough skills to work a little and pay off the enormous debt they incurred by going to college.  So the majors are a little bit more directed at learning skills.  Well, at least the names look that way.  Hence we have “Entrepreneurship” instead of “Advanced Basket Weaving”.

Of course, there is another aspect that makes a B.A. in Entrepreneurship so interesting.  That is the fact that kids today are overprotected to the point that they have no idea how to take a risk.  Helicopter parents watch their children play safe in helmets, kneepads and protective armor.   Mom and dad do their best to catch little Jimmy before he falls and if he hits the ground, he is whisked up and cuddled until the tears stop.  Of course this just encourages more tears.

"Inc. Magazine"  has charted a slowdown in new companies over the past few years.  They see a more positive future among millennials than I do.  It has to do with taking risks.  If a trophy is given to every participant and if everyone is provided protection from everything, they will never learn to take risks.  They will, however, expect to be compensated and supported for everything that they attempt.  Entrepreneurs don’t get rewarded unless they succeed at their business. 

There is no real need for a four-year degree in Entrepreneurship.  There is, however, a great need for a little restraint in the parenting department.  I laugh when my kids tell me that they are going to be better parents than I ever was.  They interpret that as a whole roomful of soft landings.  The truth is, the scrapes and bruises teach a lot more.  We learn from mistakes and we are more informed each time that we make one.  We assess risk better after failures and we are unwilling to take those risks if we have never learned that failure is not death or dismemberment, that we don’t suffer the fires of hell if we don’t succeed. 

And that is the message that our children and grandchildren should be learning from their much better parents.    

Instead of being ‘afraid to fail’ as so many of our children tell us, they should be afraid not to succeed.  This is the difference never trying and never quitting.  And it doesn’t take a college degree to learn.

Downfalls

Family businesses tend to have short life cycles.  According to an article in American Express’ Open Forum, only thirty percent of family-owned businesses make it to the second generation and only thirteen percent make it three generations. The likelihood of survival shrinks with each generation. 

I used to consult with a number of small businesses and ran into a huge number of examples involving second, third and fourth generation owners and managers who really had no clue how to guide their companies and quite often bled the businesses dry of money or just ran them into the ground.   Today, you get my opinion on this cycle. 

Here’s how it goes.  Dad or Mom open a business.  They work so very hard to get it off the ground, spend evenings and weekends doing the work.  If the business survives and grows, it eventually can pay off by providing a decent lifestyle.  Entrepreneurs become very attached to their businesses and develop a strong ownership tie.  The business grows and adapts.  It takes on a life of its own.

If that business succeeds, the owner eventually may hand it off to the next generation.  That generation has come to know the benefits that the business generated and if the children are smart and humble enough to handle success, they will continue to grow and manage the family business. 

Their children, though, would be raised in a much more privileged environment.  They would have all the fruits of success and most likely would not grasp the connection between the work in the family business and the benefits derived.

By the fourth generation, trust funds are available.  Those children will be happy to enjoy their inheritance and most are not inclined to work in the family business.  In fact, there is a sense of entitlement held by the majority of the children and this is where the business begins to suffer.  If the family is large, the trust funds can dwindle at an alarming rate.  Management becomes a lot less capable.  The company falters, slides and stands a greater chance of failure.  Each successive generation will drain the assets further until there really is no company left at all.

At some point, past the peak of success, the family will tout its greatness and talk about how much better they are than the rest of the competition.  A few may say, “We were once great and we need to get back to it again.”  Few will actually know what it would take to build or rebuild at that point.  There are answers, though.  One of the best solutions is to bring in new builders who can take a look from the outside.  They take the risks that entrepreneurs might take.  The company can grow again.

The problem with bringing in outsiders, though, is that the great family of descendants who have had ownership are not going to want anyone to take the company away.  It is impossible for inheritors and entrepreneurs to get along.  The inheritors depend on what is generated while the entrepreneurs want to use what is generated to create growth.  The values clash.  Usually the inheritors win and the company dies. 

The United States is going through this cycle right now.  The current ‘inheritors’ are fighting to keep everything from the hands of ‘outsiders’.  We want to stop immigration because it forces us to spread the wealth on which we depend.

The problem is, we need immigration.  The people who are willing to be entrepreneurs, who can bring new growth and who can help us to build are the very people we are trying to keep from entering our country.  It is foolish and will lead to stagnation and eventually the complete loss of our own country.  That is an underlying truth and will not change. 

No, I am not ‘going all liberal’.  I am, however, completely against closing our borders.  The fences that we build will do nothing more than keep us from working with the rest of the world.  No one outside will suffer any more than they do now.  Those of us inside will wind up cannibalizing our own inherited resources.

Done with my rant.  On to less relevancy and a little bit of entrepreneurship.