Ok, I’m a straggler, but I had to think about this. So far, people
have asked for hard facts, and I don’t feel these have been
forthcoming.
I support myself and my family, at this time, entirely with the
income from my small business. However, my wife has recently been
hired locally and will contribute another 20% to our family income.
I run a one-man trade shop, doing repairs and custom for 4 regular
accounts and occasional work for a couple others. Here’s how the
money situation looks.
I need to be downtown, close to my accounts, but a second story
office space is sufficient, and I rent. I have all my equipment, but
there are things I could benefit from having.
Here’s what it costs me and what I get out of it.
$3,417 a month for wages. This includes my withholding for Federal
income tax, Social security withholding, unemployment insurance,
State income tax withholding, and the matching amounts paid by the
employer (that’s me!). And with 2 exemptions, that leaves me, on
average 2600 a month to live on. I’m married and have 2 kids. $350 a
month in rent $100 a month for utilities and phone, on average $100 a
month for liability and burglary insurance, and for life insurance
(in case I drop dead, there’s money for cremation, basically). $65 a
month for sales taxes, since I occasional sell to private clients.
$200 miscellaneous expenses like solders, fuel and oxygen, office
supplies, and LOTS of coffee, etc., and of course, things I like to
support like Orchid.
So, it costs me $4232 a month to operate this business. That
doesn’t seem like much, but let me explain how hard it is to make
that much with a wholesale repair business. I know David Geller is
going to jump on me for this, but it’s my accounts he needs to talk
to, not me. I’m glad he’s out there working for me. Thanks, David.
But I price for what I can get in this market, and until it’s known
just what kind of quality and service I provide, raising my prices
will just drive my business to the other guys. I’ve done everything
from low-end, price point production work to high-end,
custom-designs in platinum, gold and diamonds. I’ve got 80 repair
envelopes looking at me right now, everything from broken 10 karat,
paper thin bad castings with diamonds that look like frozen spit to
a beautiful platinum/diamond creation with a 4.5 carat diamond to set
in it. This is, without a doubt, THE most challenging, demanding
work in the industry. And I specialize in re-furbishing estate
stuff, which, as some of you know, is slower and more treacherous
than most other repair work. It’s about one third of my work load.
I make, on average, about $12 per repair envelope. That’s gross for
labor. Parts and materials I sell at 10% over my cost, on a sliding
scale, less more mark up for expensive stuff. That comes me needing
to finish around 85 repairs a week, on average. I charge $35 per
hour, basically, and my price list has been painstakingly researched
to arrive at that amount. It’s very competitive, surely too low at
this time, but it provides a very critical percentage of the business
my accounts need to survive. I keep them in business, they keep me
in business. They can triple my charges for their customers on the
lower end charges, and the higher one’s can usually net them 100% or
more over cost. So, I’m making about 7% profit over the cost of my
operation. This I usually re-invest in equipment and materials.20
You’d think the numbers don’t work out, and I’d be making more, but
you’re lucky, running a business, to spend 6-7 hours at the bench.
Usually, it’s 12 hour days, with a third of the time spent answering
phones, packaging, bookkeeping, and generally running in circles.
You might have noticed, I didn’t include medical insurance. Well,
lucky for us, my wife has a policy with her employer and our co-pay
is only $65 a month! Not incredible coverage, but marginally better
than I had with my day job, and a lot cheaper as far as co-pays are
concerned. As for wages, I’m making the same money as I did with my
previous day job, except I don’t have the medical. I wasn’t
particularly highly paid for my skill level, but where I lived,
wages were generally on the lower end, being about 75% of what I were
being offered elsewhere, but locally, I was envied. Why didn’t I
move to those places? Because, basically, I didn’t want to end up
wearing a pair of golden handcuffs and I enjoyed the people I worked
for and with. Now I work much harder, am less secure, but I have more
choices. I don’t think there’s a future in most employment
situations these days. There are exceptions, but today’s business
model looks at material assets and it doesn’t understand human
assets, political correctness aside. So here are the questions that
employers should be asking themselves, but that you will rarely find
any of them asking.
-
Now the we’re so successful, with more stores, more inventory,
more employees, why don’t we see if we can make our work force the
best paid, the best trained, the happiest in the industry? -
Now that our personal fortunes are assured, why don’t we see if
we can make our work environment the safest, most efficient, the most
pleasant to work in that we can imagine? -
Now that we have a pretty good idea of where we’ll be in our
golden years, why don’t we see if we can create security for our
employees, to give them a financial investment in this company, to
help them develop a career track that will give them productive,
positive, creative work experiences till the day they retire, and
ensure that their families don’t have to sacrifice in order for them
to help us continue to prosper? -
Why don’t we forget all the Rotary Club buzz-words and the
nonsense of the industry’s talking heads and really THINK! about what
it would mean to make our employees part of the team?
Here are the most damaging thoughts an employer can have, in my
opinion.
- Anybody can be replaced. (Until there are only warm bodies left?)
- You can’t sell apples from an empty cart. (What do you think
you’re really selling?) 3. He/She’s at the top of the pay scale. (Are
you sure money is the problem?)
You accountant and your attorney don’t know your industry like you
do. One size does not fit all.
I know, lofty, idealistic goals. Radical, not practical, probably
socialist, and maybe even just plain un-American and anti-capitalist.
Or are they? I’m going to find out one day, I guess, because I can’t
run this business by myself. It’s a killer, but for me, it’s the
only game in town.
David L. Huffman
president and founder of little `ol David L. Huffman Studios, Inc., an
employee owned business!