Posted by MikeT23 on 10/17/2012 5:01:00 PM (view original):

Posted by jvford on 10/17/2012 4:59:00 PM (view original):

Posted by MikeT23 on 10/17/2012 4:53:00 PM (view original):
Do you run your own business or does someone tell you what to do?

OK, thanks for playing.   Now get off this site before your boss catches you ******* off.

I'm the CFO and part owner.

It's clear that you've survived in your business despite yourself.  Because you clearly have no grasp of business, economic, and financial concepts.

I'll assume the other owner(s) are the brains of the outfit. 

By your idea of "brains" I'm guessing you mean they run around saying "don't hire anybody, don't grow, ignore that demand for our products and services, it could be risky".

No, they're not.

I actually do run my own business. It's a commercial insurance brokerage. The risk to hiring someone new is relatively low, primarily just the cost of their salary. We are considering bringing on one more employee part time right now to do clerical stuff to free up our CSRs to do more complicated work. Do you know what we aren't basing our decision on? Our personal income tax rates.

Inconceivable!

In all fairness not all businesses are on equal footing when it comes to the "cost" of hiring or expanding.

In Mike's case it seems that expansion and hiring would necessitate a new vehicle for that new hire to drive, therefore there are capital investment issues to consider which is a much higher risk than simply hiring a part-time receptionist. If sales fall and the need for that part-time receptionist goes away you really haven't lost anything. If the demand for Mike's services drops, he may be able to lay off that new hire, but he is still stuck with the payment on his new truck, or must sell it at a loss, therefore his risk for expansion is much greater.

There is also the fact that some companies are not driven by the near-term small increase in profitability alone, but rather they are looking at how these decisions can/may impact them 3-5 years down the road.

I worked for a small business some years ago that was VERY cautious about bringing in new people because they had a reputation they had built over a 15 year run of having never laid off an employee. They had an unusually generous benefit package, and really cared about their employees. Not every business owner is comfortable hiring 3 people short term unless they are fairly confident they can keep them on for quite a few years. They may bring on a few temps to help meet the demands of a short-term contract, but are we satisfied with calling that "job-growth".

Understood. But I noticed that you didn't mention personal tax rate, which Mike seems to think plays a role in hiring decisions.

"Seems to think"?   Do you mean "Knows for a fact"?

Any business that doesn't look at all the costs involved in expansion, including revenue vs. tax rate, is doomed to fail.   Unless, of course, they're too big to fail.   Which, in that case, means they're probably not a small business.

You are completely and utterly wrong.

I have been making these kinds of decisions for years for several small business.  So have many people that I associate with.  Personal tax rate does not enter into business decisions for small businesses.  As BL said earlier, if it's a good decision with a 33% rate, it's a good decision with a 39% rate.

I'll take it a step further.  Do you know what's not on the financial statements of LLCs and S-Corps?  Yep, you guessed it...personal income tax.

And I'll repeat that it's retarded and ignorant to assume every small business owner thinks the same way.  So quit implying that they do.  Thanks in advance.

Not all...just the ones that know what they are doing.

It's clear you don't.  

Yes, obviously.   Only been in business since 1997.   Going bust any day now.   If I'd only hired a smart fellow like you to keep me afloat.


Oh, that's right, I don't hire tools.   Sorry.

Surviving in business is not necessarily an indication of knowing what you're doing.  And I think the ship sailed a long time ago on you having better things to do....based on the number of stupid posts per day, it's clear you have nothing to do.

There are so many ways to run a successful business, but none of them include using personal income tax rate in the decision making.  You have bought into a line of thinking that is just so wrong it's crazy.  Congrats again on succeeding despite yourself.