Staying in Business
The other day Jerod, my partner was talking with a friend who has a local wholesale and manufacturing business in L.A. This friend was discussing how things were going when he revealed that he intends to close in a few months. This friend wants to see how Highpoint goes for one last chance but he says he’s had enough of this business. There have been really great times but he’s not making much money now, so why put so much time into it when the results are meager? Jerod agreed and said I totally understand what he’s thinking, because these thoughts are part of his internal dialogue as well.
This friend is older than us and can see he’s made enough cash to have many lifestyle choices. So normally the story would end there.
Then, the topic of employees came up. We have had incredible people that have been part of our team for 10 to 20 years. That’s a long time to be with a company. I’m sure most of the college grads out there don’t expect to be in any job that long, especially if the compensation isn’t there. So Jerod posed the question to his friend:
why not keep the company open for the benefit of your employees?
It’s not that you aren’t making any money; you’re just not making what you’ve been accustomed to in years past. What are the chances of your employees getting jobs if you close down? In Los Angeles the unemployment rate is near 11.5%, and for our industry who knows? I’m sure much worse. We both have been compensated well for our entrepreneurial efforts, but our employees were, at the best of times, subject to our idea of what was appropriate pay for their prospective jobs. Don’t get me wrong; we both were able to give many of them the opportunity to own homes, new cars, small vacations, and most important, the opportunity to show their kids how to put their potential to work and achieve the American dream.
So in these times of difficulty we wonder if too many of the decisions we make are weighted in favor of people at the top without a greater obligation to society as a whole. Wouldn’t it be better if those who can sacrifice a bit more do so for the benefit of those with fewer choices? The irony is that if companies sustain their employment numbers within reason, making less profit in the short term, we can use that as a model for recovery, turning this situation around sooner. More jobs ultimately lead to more consumption. Downsizing or closing a business when the greater good is to keep people working during difficult times might be taking the low road. So for Jerod’s friend, Jerod and for myself, maybe business right now is about helping others by providing jobs, and income is less important. The high road is what we all need to be looking towards, placing a little less importance on our own personal income while keeping our businesses open.
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Tim a rep commented:
As we are at very sensitive point
KD commented:
Nice article.
furnituregirl commented:
A SWEET thought yes. But, let's take a realistic look at what is killing everyone - CASH FLOW. These banks are not just going to keep these credit lines open with furniture sales like this. What boggles me is that these manufacturers still are not listening to retailers about what the customer wants and will pay. They sit and look at a spreadsheet and think they know it all.
Mary, HFIA commented:
Vicki, thanks for your brave suggestion - that business owners consider staying in business for their employees. It is an interesting and compelling idea. The logic that our economy will not improve if companies continue to close and people continue to be unemployed or under employed seems sound. I wonder if there are others who share your view. I'm going to ask how this idea plays in Seguin, Texas or Berryville, Arkansas or Ponca City, OK or the many other towns and cities represented by the business owners I speak with everyday. There may be business owners doing this very thing who may not have had their course of action so succintly described. Thanks for these thought provoking words - this is surely a time for considering them.
