This may take a while so put on your most comfortable clothes, pour yourself a glass of your preferred beverage and curl up in your favorite chair.
The Faneuil Hall Marketplace in Boston (where our retail location resides) is undergoing some major renovations over the next year. The result is that several new “trendy” businesses will be moving in. The goal is to upgrade the shopping experience of the world’s seventh most visited tourist site. Unfortunately, it also means that a few businesses will not have their leases renewed and will have to relocate (We are not one of them. We have been asked to stay). A group of people, as you can imagine, were not happy about these changes and therefore a public hearing was held by the Boston City Council so parties on both sides could discuss the changes. A lot of constructive dialogue occurred, but a lot of name calling and accusations were made as well. One woman in particular stood up and stated venomously “This is all because of the dirty, evil one percenters who want nothing more than to make money!”
This really hit home with me. For those of you who aren’t familiar, the term one percenters refers to the top 1% of income earners in the country. Many political figures have used this to advance their own agendas and married the term to refer to businesses (large and small), creating a climate of class warfare that pits businesses against the average worker. Sadly, many mainstream media outlets have jumped on this to the point that being a business owner now means you are an evil, money grubbing, robber baron who will do anything it takes (including exploiting workers, breaking laws, destroying the environment, etc.) to make piles of money. Well, since I’m apparently part of the one percent now, let me tell you what it’s like to actually be an one percenter.
First, let’s start with some facts about small businesses (from http://www.businessinsider.com/facts-about-small-businesses-in-america-2011-8 )
- There are 28 million small businesses in the U.S. today (there are a lot of us)
- 70% of small businesses are owned and operated by a single person (we’re not all in big board rooms smoking cigars and drinking brandy)
- Small businesses employ 57% of the country’s private workforce (they are the backbone of our working economy)
- Small businesses pay 44% of the U.S. payroll (we pay a lot of taxes)
- The 77 million people that make up the US small business workforce would rank as the 17th most populous country in the world, just ahead of Iran (chances are, you work for a small business)
- Only 50% of businesses survive five years — though most (70%) hit the two-year mark (it’s tough to survive)
- If a small business can’t resume operations within 10 days following a natural disaster, it probably won’t survive (it’s a huge risk running a small business)
- Small businesses create 13x more patents per employee than large patenting companies (we’re very creative and innovative)
- A small business went bankrupt every 8 minutes in 2009 (once again, it’s a big risk for us)
- One third of small businesses rely on credit for financing (we don’t all get handed lots of money to start our dream)
- 60 to 80% of all new jobs come from small businesses (we hire!!)
- In New York City, immigrants make up 46% of the incorporated self-employed (we come from everywhere)
- Small businesses make up 97% of exporters and produce 29% of all export value! (we produce!!)
The bottom line is that small businesses make up the backbone of our U.S. economy. Without us, everything we have today would be gone. A small business indirectly supports the employment of millions of Americans. Think about it. We ship all our packages via UPS. Our contributions help pay their employees, the people that maintain their trucks, the auto industry, the airline industry, the technology industry, the oil industry, etc, etc. Each time we pay an employee, and he/she walks into a Target to buy something for $20, that $20 goes toward supporting a Target employee who will take his/her pay and spend it at Dunkin Donuts, whose employee will take his/her pay and spend some of it at a local restaurant, etc, etc. This is how our economy works. This is how it survives. I’m sorry if that insults you, but our profits go into your pockets.
Now you may counter by telling me that you understand the importance of small businesses. It’s the big mega corporations that you have a problem with. They’re the real evil ones. Well remember this. Every large business started as a small business, and every small business relies on large businesses to be successful. I can speak to that personally. We could not succeed without companies like UPS, Citizens Bank, Big Oil (someone needs to provide gas to all those UPS trucks and planes), Cisco (umm, the internet), etc. . And the next time you complain about Big Oil’s ridiculous profits, consider this. The government (federal and state) makes more money on gas taxes per gallon than Big Oil makes in profit per gallon. They do all the work, put together all the infrastructure, invest all the money and makes less per gallon than the government who does nothing to produce, refine or distribute gas. Who’s making the big profits now?
The fact is, as small business owners, we take incredible risk and bear enormous responsibility to our employees and their families. Do we want to make money? Of course we do. Is it because we’re evil and want to go out and buy new yachts and fancy cars? Consider this. My number one goal is protecting Wicked Good Cupcakes and its employees, and that takes cash. We’ve got nearly 20 people and their families relying on us to provide them with a paycheck every week. That’s a responsibility I don’t take lightly. I’ve got to make sure the company is prepared financially to weather anything that may happen. A large commercial oven dies, $30,000. Our internet service provider goes down during the high holiday season, $30,000/day in lost sales (and angry customers). A massive statewide power outage shuts down a production facility for a week – this actually happened, $50,000. The list goes on and on. I have to make sure the company is prepared not if, but when those things happen. When these things happen, we still need to make sure we can pay all our employees. We still need to make sure we can pay all our vendors. We still need to make sure we can pay our rent and utilities. All these things take one thing. Cash – and lots of it.
If, as a business, we fail to be prepared for any of the above scenarios, we pay the ultimate price. Yes, our employees would need to find new jobs and that would be horrible. We however, not only lose our jobs, we probably lose everything we own including our homes, our life savings, our credit and everything we’ve worked for our entire lives. This is indeed a heavy burden.
So do we want to make money? Of course we do. Do we ultimately want to be compensated well for our efforts? Of course we do. Does that make us evil? Of course not. Let me tell you about my evil lifestyle as a one percenter
- Both Tracey and I drive middle of the road cars (hers is 5 years old, mine is 3 years old). My car has 65,000 miles and hers has 95,000. We plan to keep them both until they die. My last car was a Nissan Sentra that I drove to 225,000 miles. No BMW’s, no Mercedes. Just a couple of Mini Coopers
- We have taken 1 vacation in the past 3 ½ years, and on that vacation, we came home early to attend to business.
- We may go out to dinner one night per month if we’re lucky. Usually it’s a quickly prepared meal late at night after a long day of work.
- I’m a huge Boston sports fan. The last ticket I bought for a sporting event was the cheapest balcony seat in the nose bleed section. That was 2 years ago.
- Tracey and Danielle didn’t take a salary for the first year we were in business. After that, they started paying themselves $50/week. Even today – 3 years later, their hourly wage is less than that of several of our employees. They could take more, but they choose to invest back into the company and into their employees
- The last concert (and only one in our 18 years together) Tracey and I attended was over a year ago (Green Day – a favorite of ours). We stayed overnight in a Holiday Inn Express and bought balcony tickets.
- We work 7 days a week (even when we went on that one vacation) often until the wee hours of the morning
- We care about the personal lives of every one of our employees. Each one of them knows they could call us anytime day or night, and we’d do everything in our power to help them
- I’m a Big Brother and I sit of the board of directors (volunteer – non paid) of a non-profit dedicated to providing alternative education to children in foster care
So yes. I (we) are one percenters. We are not evil, we care deeply about our employees and the people around us, and we are not money grubbing, profit at all cost, cocktail party attending, living the high life people. Are there evil business owners? Of course. But there are also evil employees (who steal from the company any chance they get), evil people on public assistance (who cheat the system, robbing those who truly need it), and evil customers (I recently spoke to a guy who was proud of his system of buying books at the local bookstore, reading them over a weekend and then returning them the following Monday). The fact is there are evil and good people everywhere. Just because you own a business or more importantly, are successfully making money in a business does not make you evil. Consider that the top 1% of income earners pay more in overall taxes than the bottom 90%. The percentage of taxes that the top 1% pays has increased steadily since the early 80’s. Interestingly enough, after the Bush tax cuts of 2003, the percentage of taxes paid by the top 1% increased dramatically and the percentage paid by the lowest 90% decreased dramatically even though these tax cuts were “marketed” by politicians and the media as tax cuts for the rich. The top earners also lead the way in charitable giving.
Being a small business owner, I have the privilege of knowing hundreds of other business owners. Some of them are simply small one person operations, many of them very large successful companies. I can tell you that the percentage of good people in that group far outweighs the bad apples. They give back to their communities, care about their customers, care about their employees, and really want to do good in this world.
So the next time you want to vilify us one percenters and paint us with a broad brush of evil, think of me sitting on my couch in my 900 square foot apartment, eating Annie’s mac and cheese for dinner in my 5 year old pajamas watching a Bruins game on my 7 year old television (720dpi, not 1080) writing holiday bonuses to our employees.