Political Crossfire Forums

[Harbinger]

Why is it so difficult, if not impossible, for an average middle class couple to open a successful small business? Well, the first thing that seems to be standing in the way of peoples "persuit of happiness" are all the unnecessary fees and prerequisites (red rape) that states, counties and cities impose on small business start-ups such as licensing, insurance and bonding and fees. Another major problem for the little guy are all the superchains that keep springing up. So what if they sell more from under one roof? The same amount of stuff can be sold under many roofs and for the same prices if it weren't for the superchains. The only difference is that the profits would go to many small local retailers rather than a few national superchains. Fair economic reform should minimize or eliminate these obstructions and preserve opportunity for average people.

It seems to me that big businesses are better at mass producing things with great efficiency but they make lousy retailers. Small businesses are better at retailing but they are inefficient producers. Retailers are concentrated in and around where people live while factories can be located in other countries. It seems only reasonable that the economic regulations should reserve the entire retail side of the economy for sole proprietorships and keep big businesses on the production and distribution sides. This would give more people the opportunity to go to work for themselves rather than someone else.

One of the advantages that superstores have are high sales volumes. High sales volumes translate into high wholesale purchase volumes which translate into deep price discounts which enable the superchains to undercut and eventually shut down small businesses. As such, there should be a nationwide standard square footage for plots of land on which retail establishments can be built. The square footage should be proportional to average income per household. This would eliminate superchains and normalize wholesale prices between retailers of similar scale. It should also give retailers an incentive to pay better wages to their employees. If retailers pay well, average income per household will stay up thereby keeping the standard plot size up, the number of plots down and the price per plot up. That should minimize competition and maximize local market share for each retailer. If retailers pay too little, average income per household will fall causing the standard plot size to fall. This will increase the number of plots and the price per plot will fall thereby increasing competition and reducing local market share for each retailer.

[RueTheDay]

If you talked to entrepreneurs that have actually started businesses and asked them what the biggest challenge they faced was, I doubt "government regulation" or "competition from big corporations" would top the list. The biggest challenge is typically earning enough of an income to survive while the business is getting off the ground and before it is returning stable profits.

As far as restricting the size of businesses to some arbitrary limit, we've already covered that in other threads you've started here. It completely ignores economies of scale, would be horribly inefficient, and would be next to impossible to enforce in practice.

[beachbum bob]

RueTheDay wrote: If you talked to entrepreneurs that have actually started businesses and asked them what the biggest challenge they faced was, I doubt "government regulation" or "competition from big corporations" would top the list. The biggest challenge is typically earning enough of an income to survive while the business is getting off the ground and before it is returning stable profits.

As far as restricting the size of businesses to some arbitrary limit, we've already covered that in other threads you've started here. It completely ignores economies of scale, would be horribly inefficient, and would be next to impossible to enforce in practice.

I started my own business 3 years ago...and ran into very little problems...matter of fact...the sec of state office was alot of help in getting my LLC paperwork through...
like RUE says...the biggest challenge is surviving the first few years...which I haven't had any problem in doing so..

[Harbinger]

I'm not just talking about storefronts, I'm talking about making a living. I tried to start business out of my apartment back in 2000. Not only did I not make a profit, I ended up getting assaulted by police and fined by the state tax board.

I started my business building custom computer cases (windows, LEDs , black lights etc). It was cheap to register my DBA but, I was required to published my DBA in the local newspaper. Of course, the newspaper charged an arm and a leg for it so, that wasn't very affordable or necessary. Then I got a second phone line for a credit card machine so I could take credit. I ran some adds in the classifieds and faxed some ads and order forms around town, it was all very shoe string.

Trouble started about a month later when my apartment manager noticed I was hauling boxes in and out of my apartment. She got nosy and told me I wasn't allowed to operate a business out of my apartment. The clause in the rental agreement was meant to prohibit tenants from turning their apartments into storefronts. I wasn't a storefront, I was selling my cases entirely by mail and word of mouth. I sort of got around this by renting a non-post office mailbox and updating the address on my DBA to that but, this level of obstruction should be illegal. How can anyone have the power to infringe on my right to make a living somehow besides selling my labor?

A couple of months after that, I got visited by some police with a warrant and a bunch of machine guns. They thought I was selling drugs!! They turned over my whole apartment and busted up all my cases. Of course, they didn't find any drugs. I explained to them what I was doing and they claimed it was illegal to run a business without a license and in a residential zone. HUH? They never charged me with any crimes but they also never compensated me for all my busted up cases. I decided to quit after that- not even two months in business.

The next year, I got a call from the franchise tax board saying that I was being audited. They made me bring all my financial records to their offices. They took issue with some cash income- tips- I earned from a job I had while I was running my business. They decided that it was undeclared second quarter business income the taxes for which were due by the end of the third quarter so, they charged me $364.65 tax and overdue penalties.

I'm personally terrified of starting up again.

[LeopardPM]

RueTheDay wrote: If you talked to entrepreneurs that have actually started businesses and asked them what the biggest challenge they faced was, I doubt "government regulation" or "competition from big corporations" would top the list. The biggest challenge is typically earning enough of an income to survive while the business is getting off the ground and before it is returning stable profits.

As far as restricting the size of businesses to some arbitrary limit, we've already covered that in other threads you've started here. It completely ignores economies of scale, would be horribly inefficient, and would be next to impossible to enforce in practice.

I have almost always worked for myself in one way or another, my latest business is still going strong after 5 years. Of course the hardest part of starting and running a business is the sales end of things, actually bringing in the cash, ANY time spent (or stress) dealing with government regulations and taxes is an obvious detriment. Tax time is a HUGE stress and there is always the fear that 'the gov' might decide to cast its awesome gaze down upon my little enterprise and surely dig something up that was done incorrectly or wrong and then, of course, slap on some fines or penalties. These are stresses which hamper the growth (and enjoyment) of having a business, and even have been the 'final straw' in the decision of hiring on additional people - let me restate clearly: I have purposely decided to NOT provide additional jobs to others directly due to government regulation and taxation.

No one is claiming that the 'biggest challenge' is dealing with government, but the point is that government does add an additional, unnecessary, layer of stress and hardship to the whole affair, not to mention a definite increase in costs which I try as I can to pass on to the consumer. Trying to comply with government intrusion results in me being much less competitive against larger companies even though they have greater overhead and management.

Harbinger wrote: Trouble started about a month later when my apartment manager noticed I was hauling boxes in and out of my apartment. She got nosy and told me I wasn't allowed to operate a business out of my apartment. The clause in the rental agreement was meant to prohibit tenants from turning their apartments into storefronts.
Violating the terms of an agreed upon contract with your landlord is not an example of government intrusion - it constitutes fraud on your part... you should have found another place to live/work to be honest. The problem lies in 'why' this was in the rental agreement at all - probably has its roots in government zoning.

Quote: A couple of months after that, I got visited by some police with a warrant and a bunch of machine guns. They thought I was selling drugs!! They turned over my whole apartment and busted up all my cases. Of course, they didn't find any drugs. I explained to them what I was doing and they claimed it was illegal to run a business without a license and in a residential zone. HUH? They never charged me with any crimes but they also never compensated me for all my busted up cases. I decided to quit after that- not even two months in business.
This action by the police is disgusting to me, but unfortunately its part of the package when you accept government rule. And although they were correct in their statement, 'being illegal to run a business without a license and violating zoning restrictions', those are two things which definitely infringe upon our rights as citizens. Sorry to hear your story, sir.

[Rankor and Pissing]

It sounds like you just weren't paying attention to the details and had little start-up cash. I have 2 privately owned businesses, one an LLC and one a C-Corp. The issues I ran into again were not uncommon but had nothing to do with State, Federal or local issues. If you follow a business plan / model and have the cash you need to survive for at least 1 year, you've got a shot.

About the apartment manager - you should have told her what you were doing to "spread the word" and even cut her a discount on a Computer case... if you've got a business you want to tell everyone you meet about it. You also need to market yourself differently than the 1 million other companies who sell and market the same product you do.

For example, last weekend I needed to get custom shutter pintel's and straps for some shutters I bought last year,that I'm ready to hang next week. The one's I had didn't fit properly, so I found a small company in Reading PA and took a ride. They are 100% marketed and sold via a website - they do custom external/internal shutters and hardware. They've been around for about 4 years and in talking to the owner (Who btw, met me on a Sunday afternoon, to sell me a 8 pairs of these hinges - extrodinary!) he's booked with work until January of 2008 and cannot keep up. He's got no flyers, no pens with the company name, no radio ads, no print ads, nothing. He couldn't even provide me printed materials on the products he has... he simply said, go to the website, it has everythying, prices, styles, information, materials, order sheets, contact names... you get the idea.

The long winded point is, don't blame the government for your bad time of it... you may do well to take marketing courses and learn how to sell yourself - since when you own your own business, is what the customer is really buying.

[Brooklyn]

Quote: Why is it so difficult, if not impossible, for an average middle class couple to open a successful small business? Well, the first thing that seems to be standing in the way of peoples "persuit of happiness" are all the unnecessary fees and prerequisites (red rape) that states, counties and cities impose on small business start-ups such as licensing, insurance and bonding and fees.

It really isn't hard to start a business. Its hard, however, to keep it going and turn a profit. Especially if you do not have the proper knowledge.

I started a business not too long ago. It was a concert promotion company. We did three shows and all three lost thousands of dollars each. A forth concert was out of the question. I think my problem was that I was one of the "producers" who entered the market very late. When prices had already started to drop due to the market being overloaded with supply. I should have recognized that but I didn't. If I knew then what I know now, I wouldn't have opened the business that late.

Quote: Not only did I not make a profit, I ended up getting assaulted by police and fined by the state tax board.

Did you get a sales and use tax license? What state are you in? Because some states (Texas, for example) make it very easy to open a small business.

Quote: Trouble started about a month later when my apartment manager noticed I was hauling boxes in and out of my apartment. She got nosy and told me I wasn't allowed to operate a business out of my apartment.

You made a mistake here in not contacting the management of your building before you decided to open this business.

It seems you made a number of mistakes in your "pursuit of happiness".

[Harbinger]

Rankor and Pissing wrote:
It sounds like you just weren't paying attention to the details and had little start-up cash. I have 2 privately owned businesses, one an LLC and one a C-Corp. The issues I ran into again were not uncommon but had nothing to do with State, Federal or local issues. If you follow a business plan / model and have the cash you need to survive for at least 1 year, you've got a shot.

The long winded point is, don't blame the government for your bad time of it... you may do well to take marketing courses and learn how to sell yourself - since when you own your own business, is what the customer is really buying.
This is amazing! Everyone on these forums is successfully self-employed except me. Somehow, I doubt this. The fact is, the bigger a business is, the harder it is to compete with. Most of the businesses in our economy are so damn huge, they leave no opportunity for people living on average incomes. It takes a small fortune to start a successful business which is why most new businesses are owned by parent corporations or banks.

Of course I blame the government! They are the government. They have the power to preserve opportunity for people by structuring a part of the economy (retail) so that tiny businesses can prosper in it and tiny people can make a living working for themselves and be more independent. But noooo! They can't have Americans becoming independent. To protect their wealth and their jobs, lawmakers want to allow big businesses to dominate the entire economy so that little people can't succeed and thus remain dependent. Unless you've got connections, your only options are employment, welfare, homeless destitution or prison.

[LeopardPM]

Harbinger wrote:
This is amazing! Everyone on these forums is successfully self-employed except me. Somehow, I doubt this.
actually, I wouldn't call my own endeavors exactly a 'success' by the usual standards - I am pretty happy at this point to still be eeking out a living as I don't consider that I have doen a great job in growing my little business - key problem: my own laziness

[cap'n queasy]

Harbinger wrote: Rankor and Pissing wrote:
It sounds like you just weren't paying attention to the details and had little start-up cash. I have 2 privately owned businesses, one an LLC and one a C-Corp. The issues I ran into again were not uncommon but had nothing to do with State, Federal or local issues. If you follow a business plan / model and have the cash you need to survive for at least 1 year, you've got a shot.

The long winded point is, don't blame the government for your bad time of it... you may do well to take marketing courses and learn how to sell yourself - since when you own your own business, is what the customer is really buying.
This is amazing! Everyone on these forums is successfully self-employed except me. Somehow, I doubt this. The fact is, the bigger a business is, the harder it is to compete with. Most of the businesses in our economy are so damn huge, they leave no opportunity for people living on average incomes. It takes a small fortune to start a successful business which is why most new businesses are owned by parent corporations or banks.

Of course I blame the government! They are the government. They have the power to preserve opportunity for people by structuring a part of the economy (retail) so that tiny businesses can prosper in it and tiny people can make a living working for themselves and be more independent. But noooo! They can't have Americans becoming independent. To protect their wealth and their jobs, lawmakers want to allow big businesses to dominate the entire economy so that little people can't succeed and thus remain dependent. Unless you've got connections, your only options are employment, welfare, homeless destitution or prison.

The most important quality one needs to start their own business is perserverence.

You gave up too easily. Sounds like you had the makings for a good thing. Learn from your mistakes and come back for round two a little better prepared.

[Nathyn]

It's hard to start a business because of unequal distributions of capital. You can be the most hardworking, ingenious, and ambitious person on Earth. But if you have no capital, while the industry you're entering is dominated by a select few elites, obviously you have no chance of making it, at least not without the aid of other industries, gaining a foothold by allying with one of them, through the unjust monopoly of patents, or through many, many, many years of hardwork and some luck.

[cap'n queasy]

Then why do so many immigrants come here and successfully start and run businesses with little or no capital? How come at more than half of the businesses in the US are small businesses?

That is complete crap. It's easy to start a business in the US compared to elsewhere in the world. It just takes a bit of smarts, and some genuine effort. Recent generations of Americans are for the most part weak and lazy and that is the main thing holding them back. They expect everything handed to them on a silver platter because their parents spoiled them.

[bigstick61]

Even all of the big businesses had to start somewhere. WalMart was a hole-in-the-wall pharmacy in Arkansas, I believe. That's how it started out. Now look at it. To get capital, you must work to obtain it. Once you have it, you can invest it to gain more, and when you have enough, you can use it towards starting a business. If the business is successful, you will gain additional capital to expand the business, and as long as you run it successfully, this will allow you to continually expand and earn more and more profits.

[Robin Hood]

Harbinger wrote: Rankor and Pissing wrote:
It sounds like you just weren't paying attention to the details and had little start-up cash. I have 2 privately owned businesses, one an LLC and one a C-Corp. The issues I ran into again were not uncommon but had nothing to do with State, Federal or local issues. If you follow a business plan / model and have the cash you need to survive for at least 1 year, you've got a shot.

The long winded point is, don't blame the government for your bad time of it... you may do well to take marketing courses and learn how to sell yourself - since when you own your own business, is what the customer is really buying.
This is amazing! Everyone on these forums is successfully self-employed except me. Somehow, I doubt this. The fact is, the bigger a business is, the harder it is to compete with.

You were addressing people who were self-employed so you got answers from those who were. As for your crude view that economies of scale trump everything: why aren't all industries dominated by one big player? In fact why are so many big companies founded so recently?

[Robin Hood]

Harbinger wrote: Rankor and Pissing wrote:
It sounds like you just weren't paying attention to the details and had little start-up cash. I have 2 privately owned businesses, one an LLC and one a C-Corp. The issues I ran into again were not uncommon but had nothing to do with State, Federal or local issues. If you follow a business plan / model and have the cash you need to survive for at least 1 year, you've got a shot.

The long winded point is, don't blame the government for your bad time of it... you may do well to take marketing courses and learn how to sell yourself - since when you own your own business, is what the customer is really buying.
This is amazing! Everyone on these forums is successfully self-employed except me. Somehow, I doubt this. The fact is, the bigger a business is, the harder it is to compete with.

You were addressing people who were self-employed so you got answers from those who were. As for your crude view that economies of scale trump everything: why aren't all industries dominated by one big player? In fact why are so many big companies founded so recently?

[Harbinger]

cap'n queasy wrote:
Then why do so many immigrants come here and successfully start and run businesses with little or no capital?

They don't. The only people who come here and successfully start and run businesses are the ones who bring lots of capital with them. Those who come here with little or no capital are just as dependent on jobs, public services and welfare as the rest of us. Perhaps you are mistaking second and third generation Americans for immigrants.

cap'n queasy wrote:
How come more than half of the businesses in the US are small businesses?

That depends on your definition of 'small'. If we measure the size of a business by it's gross assets and future earnings, I might agree. However, if we measure the size of a business by it's percentage of GDP (market share), I would have to disagree. Large businesses definitely hoard the market.

cap'n queasy wrote:
This is complete crap. It's easier to start a business in the US than elsewhere in the world.

Only if you're a big business. If you're an average middle income person, forget it.

cap'n queasy wrote:
It just takes a bit of smarts, and some genuine effort. Recent generations of Americans are for the most part weak and lazy and that is the main thing holding them back.

I am smarter than most people with college degrees and I work harder at my two part time jobs than most CEOs running billion dollar corporations. The only thing holding me back is my lack of sufficient capital.

Now, before you tell me to go draw up a complicated business plan and use it to apply for a business loan, I have. Banks want guarantees but there are no guarantees in business so, they want collateral. If I had collateral, I wouldn't need a loan, I would simply sell my collateral.

cap'n queasy wrote:
They expect everything handed to them on a silver platter because their parents spoiled them.

My parents definitely didn't spoil me. I understand that my success is directly proportional to my dedication but, all the dedication in the world doesn't matter if I have nothing to dedicate it to. Without sufficient capital, I can't even start a business. The minimum amount of capital necessary to start a competitive business is far too much for me and every middle class American. All I expect is merely that the opportunity to succeed for people with average incomes be maximized rather than minimized by economic policy.

Why is this so unacceptable, cap? Because increasing the wealth and power of the middle class means decreasing the wealth and power of the upper class. In a word, GREED.

bigstick61 wrote:
WalMart was a hole-in-the-wall pharmacy in Arkansas, I believe.

Yet, the hole-in-the-wall WalMart of thirty or forty years ago didn't have to compete with anything like the WalMart and Walgreens of today. All the hole-in-the-wall pharmacies of today do. See, that's what I'm talking about. Our economic forest is so full of giant redwood trees that the shrubs on the forest floor never see the light of day.

[gavnook]

Harbinger wrote: cap'n queasy wrote:
Then why do so many immigrants come here and successfully start and run businesses with little or no capital?

They don't. The only people who come here and successfully start and run businesses are the ones who bring lots of capital with them. Those who come here with little or no capital are just as dependent on jobs, public services and welfare as the rest of us. Perhaps you are mistaking second and third generation Americans for immigrants.


That is complete crap. Read this. Look at the chart and notice that for every ethnicity, foreigners are more likely to be self-employed.

I work with a man named Frank. Frank is from Mexico. He's in his 50's. He came to the US as young man with nothing. Years ago while working as a machinist, he started his own machine shop because he wasn't satisfied with income. Once his kids were grown, he quit that and got a job again because he didn't really need that much money anymore and didn't want to work that hard.

[Nathyn]

cap'n queasy wrote: Then why do so many immigrants come here and successfully start and run businesses with little or no capital? How come at more than half of the businesses in the US are small businesses?

That is complete crap. It's easy to start a business in the US compared to elsewhere in the world. It just takes a bit of smarts, and some genuine effort. Recent generations of Americans are for the most part weak and lazy and that is the main thing holding them back. They expect everything handed to them on a silver platter because their parents spoiled them.
My original post:
Nathyn wrote: But if you have no capital, while the industry you're entering is dominated by a select few elites, obviously you have no chance of making it, at least not without the aid of other industries, gaining a foothold by allying with one of them, through the unjust monopoly of patents, or through many, many, many years of hardwork and some luck.
The answer is clear:

1. They already had Capital.

OR

2. The industry they enter is not dominated by monopolies and cartels.

OR

3. They gain the aid of one of the powerful businesses.

OR

4. They profit from intellectual monopoly.

OR

5. Many, many years of hardwork and some luck.

The fact that it is easier for a person to go from rich to poor than poor to rich under Capitalism demonstrates that Capitalism isn't inherently meritocracy.

[cap'n queasy]

Quote: The fact that it is easier for a person to go from rich to poor than poor to rich under Capitalism demonstrates that Capitalism isn't inherently meritocracy.

I would say it demonstrates that it is.

[Harbinger]

gavnook wrote:
Harbinger wrote:
cap'n queasy wrote:
Then why do so many immigrants come here and successfully start and run businesses with little or no capital?

They don't. The only people who come here and successfully start and run businesses are the ones who bring lots of capital with them. Those who come here with little or no capital are just as dependent on jobs, public services and welfare as the rest of us. Perhaps you are mistaking second and third generation Americans for immigrants.

That is complete crap. Read this. Look at the chart and notice that for every ethnicity, foreigners are more likely to be self-employed.

Oh please! The article only seeks to explain why Asian immigrants are more likely to be self employed than native Americans- including native born Asian-Americans. That's a far cry from what you're trying to say. In no way does this article support your assertion that immigrants in general are able to come here and start their own business anywhere they want with little or no money while lazy spoiled Americans sit on their butts and complain about wages. The author specifically points to racism, language barriers and isolationism as explanations for the high rates of self employment among Asian immigrants. He also points out that Asian immigrants get most of their financial help from self employed family members which totally supports my assertion that unless you've got money and/or connections, it's virtually impossible start a successful small business in our economy.

gavnook wrote:
I work with a man named Frank. Frank is from Mexico. He's in his 50's. He came to the US as young man with nothing. Years ago while working as a machinist, he started his own machine shop because he wasn't satisfied with income. Once his kids were grown, he quit that and got a job again because he didn't really need that much money anymore and didn't want to work that hard.

Didn't need that much money? Since when does anyone limit their income to what they need? Poor Frank should be very comfortably retired or voluntarily self-employed but, he isn't. He still needs a gob. Is this supposed to be the American dream?