13 ms·

> The fact of the matter is most small businesses are crap businesses. > They also abuse their workers in ways big business can't get away with, both illegally

> The fact of the matter is most small businesses are crap businesses. > They also abuse their workers in ways big business can't get away with, both illegally and legally. Really? You know this to be a fact? It appears that the only thing you know about small business comes from what you read on /r/antiwork The fact of the matter is that 47% of Americans are employed by small businesses. That percentage keeps dropping, not because the owners are assholes, but because mega corporations keep getting larger and more monopolistic. Most small businesses run on razor thin margins because they don't have the economies of scale that the larger corps enjoy. My friend owns a cidery. The cost of his raw materials (juice concentrate and sugar) have gone up over 300% in the last 18 months, thanks to supply chain issues and worker shortages due to Covid. The prices are due to get even worse this year. His total burdened cost for a case of goods has gone up 170%. But he can't just mark his stuff up 170% now can he? He has to settle for a 10% bump in price and hope his distributors don't freak out. BTW, he has 8 employees and pays health insurance. Afaik, he didn't suffer any employee churn during Covid, cause he's not an asshole. In most sectors except for maybe fast food, small businesses have suffered not from employee churn, but from the Covid policies over the last two years combined with ridiculous price increases.

Tinyyy 5y ago
That sounds like a crappy business that can benefit from economies of scale.
- eigenrick 5y ago
  Absolutely. All he needs to do is dig up the 100 million dollars he has buried around his yard so that he can scale to the point that taking a 300% hit on materials doesn't affect him. Or maybe he should spend some of his billions to buy up all of the apple orchards in the region so he can better control his supply chain (and, coincidentally, that of his competitors) Scaling has its limits, unfortunately)
  - redwall_hp 5y ago
    Yeah: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/ https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr... The bottom 50% of the US has 2.6% of the wealth. The 50-90% bracket has 27.6%.
- legostormtroopr 5y ago
  And thats how monolpolisation happens. Instead of 5 or 6 moderately successful cideries meeting different market needs, we have 1 or 2 who control the entire market.
listenallyall 5y ago
You sure have a lot of details about your friend's business. Most friends might say, "hey my cost of goods went way up" or "almost doubled". Your friend is oddly specific. And he doesn't have "a bunch of workers" but exactly 8. You must be a very close friend!
- wilkystyle 5y ago
  It's almost as if they're friends who talk about things that happen in each others' lives!
  - listenallyall 5y ago
    Not on this planet. This sounds like how you talk to your accountant, not your friends. You don't burden your friends with details this specific.
    - 6bb32646d83d 5y ago
      I could totally see a friend spending 5mn explaining that his cost has gone up 300% when venting while getting a drink together. I don't understand why you're finding this so unbelievable.
      - listenallyall 5y ago
        You talk to your friends about "total burdened costs"? Or something went up exactly 170%? Not "almost tripled"? Sure.
        mrguyorama 5y ago
        If you and your friend are both interested in how businesses work, you're definitely going to talk shop
        listenallyall 5y ago
eek2121 5y ago
Funny enough, I'm in a position to be friends with many small business owners (I've done work for them over the years, and it has involved into friendships) The folks that are successful don't look at pennies. They produce or sell their products for a healthy price and focus on delivering a quality experience. I went to dinner with the owner of a small business last week that just closed on 30mm in revenue across 15 employees. The company has a profit-sharing plan that pays most of the profit into a pension. It has been in business for well over 15 years. They aren't the cheapest, but they have excellent customer service, sell great products, and ship those products to you in the fastest way possible. If, as a small business owner, and your primary concern is undercutting the other guy, you are going to go out of business. That has been the rule since capitalism was basically invented. Very few businesses can make their money by undercutting the other guy. Notice the most successful companies such as Starbucks and Apple, and even nonprofit companies such as the YMCA (in the US) don't focus on the bottom dollar. Instead, they focus on standing out. Even if you look at bottom dollar chains like McDonalds, companies have tried to do it cheaper. Shoot, you can STILL do it cheaper. The reason they don't exist anymore is because, at the end of the day, McDonalds did a better job of providing food of consistent (shit, erm, sorry, not a McDonald's fan) quality, quickly, and at an affordable price.
- MrWiffles 5y ago
  Nailed it. Not rocket science; focusing on delivering VALUE in exchange for the money you charge has always been the obvious, unsexy, boring, fundamental thing that makes any economy function. So yeah, it's not surprising your friend has closed over 30mm. Especially if he's treating his employees well (which is what it sounds like, esp. wrt. pension). And there's unsexy rule number 2: you treat the people who do the hard work really well, you pay them well, and you hire accordingly because that translates into an intangible competitive advantage that doesn't lend itself well to quantifiable measurement, but something we all have a word for anyway: OPTIMISM! It's no secret why these shit-for-pay businesses all over the country are having a hard time filling open hiring reqs; because the pay sucks! And that's usually a fair indicator of how your employer's going to treat you if you join them, too. If they're not willing to pay a reasonable living wage, you can be pretty sure they're also not going to bother making the working environment anything even marginally better than the law requires as an absolute minimum. And frankly that legal bar is far, far too low to begin with (and we're not even talking minimum wage here, just basic human decency is lacking most of the time). So yeah, kudos to your buddy there. If small businesses want to compete with the big guys, this is how you do it. You don't undercut, you charge fair, you pay better, and you over-deliver. It's called "hard work", and that's precisely why it's so damn rare.
ladyattis 5y ago
As someone who's worked between big corporations and family owned businesses, I'd say the family owned and small businesses are worse, especially in entry level jobs, than working for a big corporation. At least with a big corporation, they're more likely to leave your branch or location alone if you at least hit their targets for revenue. There's not much in the way of micro management in a job at the bottom rung with respect to big corporations whereas I've had 'the owners' of family owned businesses always pestering folks when most times they have no clue what they're doing, especially their kids who they think they can trust with running day-to-day operations.
- nightski 5y ago
  You may or may not be right but I wouldn't want to live in a world where we did not have small business. That combined with the fact that the reason they probably struggle so much to provide for their workers is because they are competing with global multi-nationals that can use tactics to eliminate them.
ahallock 5y ago
We really need small businesses. I would hate to see them go extinct and only be left with a few mega corporations. It would be a shame to lose the local pizzeria serving up authentic, quality food and only be left with Little Caesar's and Domino's. They both have their place.

Tinyyy 5y ago

That sounds like a crappy business that can benefit from economies of scale.

eigenrick 5y ago
Absolutely. All he needs to do is dig up the 100 million dollars he has buried around his yard so that he can scale to the point that taking a 300% hit on materials doesn't affect him. Or maybe he should spend some of his billions to buy up all of the apple orchards in the region so he can better control his supply chain (and, coincidentally, that of his competitors) Scaling has its limits, unfortunately)
- redwall_hp 5y ago
  Yeah: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/ https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr... The bottom 50% of the US has 2.6% of the wealth. The 50-90% bracket has 27.6%.
legostormtroopr 5y ago
And thats how monolpolisation happens. Instead of 5 or 6 moderately successful cideries meeting different market needs, we have 1 or 2 who control the entire market.

listenallyall 5y ago

You sure have a lot of details about your friend's business. Most friends might say, "hey my cost of goods went way up" or "almost doubled". Your friend is oddly specific. And he doesn't have "a bunch of workers" but exactly 8. You must be a very close friend!

wilkystyle 5y ago
It's almost as if they're friends who talk about things that happen in each others' lives!
- listenallyall 5y ago
  Not on this planet. This sounds like how you talk to your accountant, not your friends. You don't burden your friends with details this specific.
  - 6bb32646d83d 5y ago
    I could totally see a friend spending 5mn explaining that his cost has gone up 300% when venting while getting a drink together. I don't understand why you're finding this so unbelievable.
    - listenallyall 5y ago
      You talk to your friends about "total burdened costs"? Or something went up exactly 170%? Not "almost tripled"? Sure.
      - mrguyorama 5y ago
        If you and your friend are both interested in how businesses work, you're definitely going to talk shop
        listenallyall 5y ago

eek2121 5y ago

Funny enough, I'm in a position to be friends with many small business owners (I've done work for them over the years, and it has involved into friendships) The folks that are successful don't look at pennies. They produce or sell their products for a healthy price and focus on delivering a quality experience. I went to dinner with the owner of a small business last week that just closed on 30mm in revenue across 15 employees. The company has a profit-sharing plan that pays most of the profit into a pension. It has been in business for well over 15 years. They aren't the cheapest, but they have excellent customer service, sell great products, and ship those products to you in the fastest way possible. If, as a small business owner, and your primary concern is undercutting the other guy, you are going to go out of business. That has been the rule since capitalism was basically invented. Very few businesses can make their money by undercutting the other guy. Notice the most successful companies such as Starbucks and Apple, and even nonprofit companies such as the YMCA (in the US) don't focus on the bottom dollar. Instead, they focus on standing out. Even if you look at bottom dollar chains like McDonalds, companies have tried to do it cheaper. Shoot, you can STILL do it cheaper. The reason they don't exist anymore is because, at the end of the day, McDonalds did a better job of providing food of consistent (shit, erm, sorry, not a McDonald's fan) quality, quickly, and at an affordable price.

MrWiffles 5y ago
Nailed it. Not rocket science; focusing on delivering VALUE in exchange for the money you charge has always been the obvious, unsexy, boring, fundamental thing that makes any economy function. So yeah, it's not surprising your friend has closed over 30mm. Especially if he's treating his employees well (which is what it sounds like, esp. wrt. pension). And there's unsexy rule number 2: you treat the people who do the hard work really well, you pay them well, and you hire accordingly because that translates into an intangible competitive advantage that doesn't lend itself well to quantifiable measurement, but something we all have a word for anyway: OPTIMISM! It's no secret why these shit-for-pay businesses all over the country are having a hard time filling open hiring reqs; because the pay sucks! And that's usually a fair indicator of how your employer's going to treat you if you join them, too. If they're not willing to pay a reasonable living wage, you can be pretty sure they're also not going to bother making the working environment anything even marginally better than the law requires as an absolute minimum. And frankly that legal bar is far, far too low to begin with (and we're not even talking minimum wage here, just basic human decency is lacking most of the time). So yeah, kudos to your buddy there. If small businesses want to compete with the big guys, this is how you do it. You don't undercut, you charge fair, you pay better, and you over-deliver. It's called "hard work", and that's precisely why it's so damn rare.

ladyattis 5y ago

As someone who's worked between big corporations and family owned businesses, I'd say the family owned and small businesses are worse, especially in entry level jobs, than working for a big corporation. At least with a big corporation, they're more likely to leave your branch or location alone if you at least hit their targets for revenue. There's not much in the way of micro management in a job at the bottom rung with respect to big corporations whereas I've had 'the owners' of family owned businesses always pestering folks when most times they have no clue what they're doing, especially their kids who they think they can trust with running day-to-day operations.

nightski 5y ago
You may or may not be right but I wouldn't want to live in a world where we did not have small business. That combined with the fact that the reason they probably struggle so much to provide for their workers is because they are competing with global multi-nationals that can use tactics to eliminate them.

ahallock 5y ago

We really need small businesses. I would hate to see them go extinct and only be left with a few mega corporations. It would be a shame to lose the local pizzeria serving up authentic, quality food and only be left with Little Caesar's and Domino's. They both have their place.