We’re enduring, in America, another populist love affair with socialism, or “democratic Socialism,” as Bernie Sanders defines it, where the old fella seems to admit the government may not be able to manufacture working dishwashers, but it can, somehow, guarantee the lifestyle of the middle class. Hillary Clinton joined in the chorus and declared that workers should be able to share in the profits they help their employers make.
I got to thinking how noble that sounds. Share in the profit. That sounds so much better than “share in the losses.” Even wedding vows project “for better or for worse,” but politicians are positive thinkers, I guess.
I’m one of those people who doesn’t see things as an employee, I guess, because I’ve always been in business for myself. I had a chance, in the early 1980s, to be an assistant fiction editor at Esquire, but even then, fresh out of college, the thought of a job, working for someone else, filled me with dread. I would much rather face the probability of being fired by a customer every day than by a manager after ten years of service.
So, when I say I prefer having my own business, it’s not out of some self-proclaimed nobility. I just prefer controlling my own destiny as much as possible. I like not having to worry about what a new management team, 2500 miles away, thinks of me. I like knowing that if they fired me, and found out they made a mistake six months later, I wouldn’t have to enjoy the interim lack of income, while they were coming to their senses.
But there’s a price to pay for this independence. It’s called “failure.”
Here are some of mine:
- My father helped pioneer a new brand of scissors in America called “Fiskars.” He did very well with them, and I thought I would advertise the company’s nifty culinary scissor in Yankee Magazine and Bon Apetit. I would really charge a premium for them at retail mail order, take advantage of the European novelty, and make a lot of money. Well it turns out the readers of Yankee Magazine were very Yankee in their spending habits and culinary scissors weren’t very novel to gourmet cooks, so I think I spent about $1200 in advertising, and sold about $247 worth of scissors. I got some nasty feedback about my price too.
- When my wife and I had our first child, we found it very difficult to find classic, ribbon-tied birth announcements so we started a mail order company called “Blue Sky Baby Company,” and we offered a free catalog in American Baby Magazine. We had an 800 number, and within a matter of days, we were sending out 500 catalogs a month. We were filling orders too, and, boy were we working. The phone was ringing for 40 free catalogs for every one real order. After eleven months of mailing catalogs by day and ribbon-tying birth announcements by night, we concluded that the phone bills, advertising bills, and printing bills were overwhelming us. We cried uncle.
- In the early years, I did computer programming as a consultant, and one of my customers effectively declared bankruptcy, leaving me with tens of thousands of dollars in unpaid invoices. We were building our house on Riley’s Farm at the time, and I faced the unpleasant task of trying to pick out light fixtures and wondering if I would ever be able to pay for them. Fortunately, other work came along, but let’s just say I know what it’s like to beg a creditor for mercy.
- When we first went into the living history business, we thought it would be neat to show Californians our version of the battle of Lexington and Concord. My wife spent evenings sewing expensive 18th century redcoats. We purchased authentic Brown Bess flintlocks, and we hired staff to put on a great April 19th event. Unfortunately, less than 19 people paid to come see the big show, and we were out thousands of dollars in expense promoting it and planning for it.
I have many, many, many more failure stories, including a disastrous flirtation with an eccentric theory I had about stock options, but let’s just say that our redcoat failure actually led to a successful business providing living history field trips for elementary school students. We were able to leverage that success into a restaurant and agriculture business and we now have about 25 core employees that I value like family. I want them to make more money along with me, when I make it, but I’ve never asked them to share in my economic failures. Our accountant tells me my wife and I don’t pay ourselves enough, but we would rather grow than take lavish salaries, in part, because I want not just jobs for my employees and family — but careers. We want to grow.
Faithful employees are great people, and I don’t know a successful business owner who doesn’t value his employees, but employees don’t go home at night, worrying about sales with the intensity I worry about them, or taxes, or regulation, or changes in the market, the way I do. They may make a mistake at work, but they don’t pay for it economically. I do. I promised them wages for hired labor. That’s the covenant.
If they want to share in the profits, I’m good with that too. But they have to pay the price. They have to buy in with their own dollars. They have to own it, the profits AND the losses, the way I do.
Bernie Sanders, getting his government check every two weeks, may not understand that, but I think the American people do.