Not starting new mainstream company
 

I was reading through a post about Minte, I'm surprised how many people are saying that no matter who is the president it doesn't make a difference on starting or expanding your business. I was planning on opening a few small businesses this year. When you factor in how much money and time you put into opening a business and how long it usually takes to turn a profit, It all makes it difficult. When you add onto that a 56% tax rate It no longer becomes worth the risk :2 cents:

So many small businesses just barley make it by, I'm guessing a lot of them will be pushed over the edge with this.

Edit: I know it isn't many, but that is at least 3 new jobs that won't be added to the Country. and every job makes a difference.

It's the catch 22 that our economy has fallen into.

China has a corporate tax rate of 25% compared to the current US rate of up to 39%. Factor in the labor rate in China and it's easy to see why jobs have left the US.

This is NOT Obama's fault. This started seriously during Clinton's administration and Bush didn't do a thing about it.

There is a lot of discussion about how to get jobs back, but until something is done about the huge disadvantage we have here in the US it will be a real challenge.

Every business has it's benefits, and every business has it's costs/expenses. I call bullshit on anyone who says they won't start (or will close) a business because of a marginal percentage of cost difference based on any varying factor (whether it's political, industrial, or economical causation).

Let's say war breaks out in some south american country and now import costs for a specific type of material increase by 25%. Let's say this price increase effects the bottom line of a clothing manufacturer by 5%. Do you think they're going to go with one of these options: accept a 5% revenue loss for the duration of the war, find a new import model, or look at the books and find a way to makeup for the loss somewhere else for the time being -- or just close their doors?

They're not going to just close their doors. The rhetoric from the media outlets saying so is fucking ridiculous. Businesses operate with costs, that's how it works. A business operates to make money, period. Whatever the costs and expenses are, you operate AROUND those to earn a profit. That's why they have entire degrees built around business. Because there's always a way to adjust and earn more profit, regardless of cost and operating expense. It's just how it works.

Drive around any industrial park in America and count the forsale signs. The plant we just purchased was owned by a $5.5b dollar company. The products that were made here are still being made, in China and Mexico.

You are so right. Im friendly with the owner of the local diner. He had two restaurants, very hard worker. During this omg time he has opened two more restaurants and one is a huge seafood place that did so well, he had to buy the property next door for more parking. These are the worst of times these are the best of times. Coach was started in 1941 in the middle of world war 2 in a loft in NYC. You make a product or service people want you will make money.

When you get kicked squarely in the ass, you will have a sore butt. And over the last decade businesses have been kicked squarely in the ass.

On a local level. Walmart(s) have nearly destroyed every ma & pa business in the area. Every where you look you see small vacant buildings that once housed small businesses. And Walmart prospers because they buy most of what they sell from companies based overseas.

In my mind. Walmart has done more to damage the economy than the federal government did. Walmart made going offshore legitimate. So now everyone does it.

i agree things have been really fucked, no doubt about it but saying Obama is the reason you won't be opening your new business is .... :helpme

it seems some people aren't doing so well, others are expanding... isnt' that the way it's always been ? Some people are noticing things are getting better.

What 56% tax rate are you talking about?

I'm taxed at the standard rate of about 30% for income, then 14% for capital gains.

That production wasn't moved to China and Mexico over night. It happened over a long period of time. Meaning the business owner decided it wasn't worth his time to find a solution to the problem, and let the business go under. If you're in the production or manufacturing industry, and don't have a business plan if/when things in your industry start being produced/manufactured overseas. Then you're in the wrong fucking industry and the markets will dictate the eventuality of your business failing.

Every business and every industry has it's unique problems, and to every problem there is a solution. A business operator can be proactive, and find solutions. Or they can just sit back and watch their margins shrink year after year until they must eventually close their doors.

Clearly you should only open up a new business or expand a current business when a business friendly Republican is in the White House.

How did that work out for you last time?

Uh Huh,,,sounds good.

If you are 5' 2" and weigh 120 and decide to take on a guy 6' 6" and weighs 260 that just moved in across the street, I am sure that you will just get your ass kicked badly. And over the decade,Walmart has proven to be that 6'6" fellow.

That actually brings up another point that is continually seen on this forum time and time again. People seem to not understand or they forget that any market is a continually moving target. You can't just start an operation or business one day, and expect it to work exactly the same way with exactly the same structure / model five years later. Markets change, constantly. As a business you have to adjust and change your scheme in an every flowing manner in order to stay on top of the ever changing markets.

Look at how people on this forum constantly bitching about how they aren't making money anymore, and that this is to blame, or that is to blame. No one is to blame but themselves. They got into an industry ten or fifteen or however many years ago, they started at one point in time where the business model was one way. And now however many years later they're still running off that same business model wondering where the fuck their profits have gone. It's a perfect example, and an even easier industry to see it happen in. Because these people can so easily "start a business", there's no risk - with $20 bucks and some goggling they've got themselves a domain, hosting, and some reference on what to do. It's why failures are so prevalent online. They don't need any business sense or skills, and without that they tend to fail. The markets WILL change, every year there are going to be new challenges and problems to face in an online industry. If you don't have the wherewithal to find solutions to those problems, you will crash and burn.

Manufacturing output moving to China has nothing to do with Clinton, Bush, Obama, or the corp tax rate.

There is only one reason to manufacture in China and that is unit cost. Labour is the lions share of that saving, but factor in cheap land for factories, cheap utilities, zero health and safety, no unions, no employee rights, and a burgeoning middle class to buy your consumer goods, then you begin to understand China.

The idea that something should or could be done simply is not viable. Are you going to slash the salaries, employee rights, and living standards of the average voting american down to Chinese levels ?

Whether you like it or not all mature industrial nations have the same problem when a low cost manufacturer comes along. The answer is not to go down to meet them at their level, you have to raise your standards, you have to manufacture goods and services that are beyond their technical level. You have to move ahead and stay ahead. More R & D, and a better educated and skilled workforce producing goods that are advanced and superior. Going backwards is not the answer. Not in a democracy at least.

:2 cents:

:2 cents:

What does Walmart have to do with Chinese and Mexican labor costs? Last time I checked, Walmart just sells shit people want. They (the consumer) can pretty much buy it anyplace, but they choose Walmart due to low prices... because Walmart buys in bulk and passes their savings off to the consumer.

35% federal + 10% state (if you happen to live in California) +15% Social security = 60%

(it's a bit more complicated than that, but it's possible that in certain income ranges, the effective tax rate would end up 56%)

and of course this doesn't even include any other taxes like real estate, sales, licenses, permits, etc...

What are your state taxes, income, sales and property? How much do you match your employees SS, FICA, unemployment tax, etc? My guess is you are paying way more than 30% and 14% in total taxes.

Make of these what you will:

http://www.freedomworks.org/blog/gru...offs-you-voted

http://twitchy.com/2012/11/08/forwar...er-doing-same/

http://twitchy.com/2012/11/07/boeing...fter-election/

I could be wrong but I get the feeling things are going to get much worse in short time.

good for you.



now what is everyone supposed to do. cry about it for the next four years ........

I am aware of all the talking points and cheerleading about how it should be.

However, it would've been a lot easier if our federal government had stepped in and taxed the hell out of imports. The Chinese government still pays their manufacturers 7 cents on each dollars worth of goods they export to the US. The government still subsidizes raw materials and energy costs as well.

As long as the playing field remains lopsided, American consumers will continue to buy from the lowest offerings. I don't blame consumers. But it's fairly clear why the economy spiraled downhill the way is has,

I wasn't able to read all posts yet but wanted to reply to a few things.

1. I did not say because Obama is in office. But yes Romney was going to lower taxes to get more businesses to open in the USA. Fact is raising taxes only hurts small mom and pop businesses.

2. Taxes will be going up to 56% and Health insurance will be jumping 30%

3. I'm not talking about restaurants (people have to eat) I'm talking about small businesses that will barely make a profit anyway.

I'll list what they were here later.

Nope. Just try to survive.

its sad what has become of the north american manufacturing sector. In my hometown area there used to be a bunch of mold making/tool and die shops pumping out auto parts and the like, they're all gone except for one now. Moved to china/mexico. Some even closed their doors and didn't even give the employees their last check. I went to school for mold making but started making websites while waiting around for an apprenticeship. good thing for me i guess but anyways... while lowering taxes might help to some minute degree the only way to bring these jobs back is one of the following

-workers must accept huge wage cuts which would make it impossible to afford life in any first world nation
-huge import taxes on anything made out of country so people have no incentive to leave
- workers in labor cheap countries demand more and more until its no longer profitable to be over there

tax cuts or not, it will still be cheaper to make things in china/inda/whatever.

The cap on capital gain taxes will expire 12.31.2012
It will from next year be taxed at higher rates
Any profits you are taking out should be done this year to avoid being taxed higher..

The Federal government could level the playing field very quickly . . . if it really wanted to:

1) Apply big (as in very big) tax breaks for companies that keep jobs in the USA and/or bring jobs back to the USA.
2) Apply big (as in very big) tax increases on companies that ship (or have shipped) jobs overseas.
3) Selectively apply significant tariffs onto goods produced by companies that evade #2 by moving their corporate HQ overseas.

End result: Goods will cost a little more at your local Walmart, but individual earnings will go up (on average), unemployment will go way, way, way down and the government will reap a windfall collecting taxes from all those newly employed people.

Obama mouthed some words to this effect during the campaign, but I rather doubt that he has the balls to really go for it.

Yeah, sure, Romney was going to lower taxes while reducing the deficit. Magic join links!

Healthcare goes up every year. Every year.

People got to eat!

Come down to Houston and all you will see "Help Wanted" because of the oil industry. I know many of friends here are having a hard time filling all the positions they have open at their shops. However, I do understand we are the exception not the rule.

How about instead of trying to herd cats, somebody comes up with a way to align the interests of the country, business, workers, so enlightened self interest takes over and its a little self sustaining instead of constant opposing forces fucking everything up?

Oh , restaurants are not a small business. They aren't effected at all in a down economy :1orglaugh

http://thesunnews.typepad.com/a_diff...self-feel.html

Using low cost manufacturers as a scapegoat for current problems is very shortsighted, and simplistic. You strike me as neither.

The global economy is in the shit because of decades of unsustainable rising consumer and government debt propped up by over inflated asset values and unregulated banking practices. This debt covered up the underlying weakness of the European and US economies. We just borrowed more to fund our lifestyles based on inflated assets.

In 2008 the pack of cards came tumbling down when a small ripple turned into a tidal wave. Asset values were slashed causing debt became to toxic, and the banks were broken. It took some very smart and decisive action to avert a financial catastrophe. Most people don't realize how close the end of our way of life actually was, and most people have no idea who averted the disaster or how it was done.

I laugh now when I see China (or Obama) being blamed for the state of the US economy.


:2 cents:

Pathetic.

You were going to be a dynamic successful business man, creating jobs and wealth, now your not going to bother ?

Madison is actually weathered the storm. I think the unemployment rate here is about 5%. It's not the hotbed of manufacturing though. Lots of Bio-tech jobs and the University of Wis is here and they keep a lot of people working.

Racine, Janesville,Kenosha...most of Milwaukee has industrial parks that look like cemetarys.

"import taxes/tariffs/quotas/etc" is an indirect tax on customers (middle class)...
sure it may create jobs, but those jobs would be subsidized by this indirect tax..

the main beneficiaries would be manufacturers and workers that happen to work in those industries, while the middle class would pay the bill for it all...:2 cents:

So Minte will stand to gain while his employees foot the bill. Meanwhile, he buys a new exotic car.

Brilliant.

Like I said the businesses I was going to open were small, very small. Employing few people and turning very small profits.

1. Photography studio, could be rented to photographers in the area. And it would be useful to my company to rent when shooting girls. This business would not make much any profit if even break even, It would only need 1 full time employee to run. But I wanted to do it, I like the idea, I had a friend in mind to work there, and It would be useful for my porn company to rent.


2. A normal photography studio for mainstream. A complete different business than the one above. Where I would hire two photographers I know to do family portraits etc.


3. Hair salon, I have a close friend who graduated school recently and wants to open her own shop, I was going to fund this and help start things partnering with her.

All 3 of these companies would take at least a year to three years to turn a profit. If after expenses one only made $2,000. a month then was taxed 56% what is the point in putting up the time and money to open these companies?


Now I will just put my time and effort into my adult business.

No question,what you describe is accurate and it was the straw that broke the camels back. For instance, Detroit has been down for decades. It had nothing to do with China, It had everything to do with Japan.

I was in business when the Japanese started competing hard with us. First it was the machine tool industry which they pretty much own today. Then it was electronics,then finally transportation. Today, a Japanese laborer is paid on par with US labor. It didn't take many years for Japan to catch up. Then came Taiwan, exact same scenario. Cheap labor and lot of exports to the US. Again, Taiwan quickly caught up to the US on costs.

For the last 10 years we have faced serious competition from China. And to tell it straight. It wasn't really a competition. They whooped us soundly. Now Chinese labor is starting to increase. But their population is so large it's going to be a while yet before they have to spend the kind of money that we do in the US on exactly the same things.

Making the market so easy for the Chinese to dump their products here is what eroded the foundation of the house of cards that the banks, wallstreeters and real estate magnates managed to create.

No more cars.. I am looking at a new Jet. :) I have my eye on a Citation X.
Now get back to work, fool...make some mediocre money and give it all to the IRS.

Just curious, Do you have anything going in the adult world?

As soon as any business owner, says they need or require the government to work in a certain way in order for them to successfully run their business. They have failed as a business owner, period, end of fucking story.

You should not own a business if you need or require anything from the government. It's your job to find your profits and margins, it's your job to figure out how to manage your expenses and costs, it's your job to figure out the solutions to the problems.

It's YOUR fucking job. Not the governments.

I swear I'm so sick of hearing people complain about this and that, and the government should do this, or the government needs to do that. No, they don't. You need to work a little harder and figure out a solution your god damned self.

I'm guessing you don't own a business, though I could be wrong and do see your point. I'm not asking the government for loans or any help. The point I was making is that it is not worth opening these small businesses the way things are. Having to be competitive on prices and looking at the risks, It just isn't worth trying for the very low profits that are projected.

so IF government sets laws that minimum wage is $20/hr, that you HAVE TO provide $500/month health insurance, unemployment insurance, have to contribute $5k/year to employees retirement plan, etc and on top of that, any money they make will be taxed at 50%, the business owners shouldn't bitch?

business owners will stop bitching as soon as government stops telling them how to run their business... :2 cents:

Same logic as your rent getting raised and saying 'fuck it, I'll just quit my job'.

No wonder you retards lost the election.

Isn't that what many people did? I know a few different people who will not work because they will not gain much difference than what the government will give them to sit at home :2 cents:

I'm not trying to get into a class warfare thing. Just explaining why raising taxes etc. doesn't help in small business.

Edit:
Truth is my income is somewhere around the middle class. Everything I have extra I put into trying to help other people. No I do not donate to charities often, except Good Will when my girlfriend cleans house...lol, But I always try to help friends that are having trouble. I even have the electric bill for a friend's house in my name and am paying for their cell phone. I'd rather give to friends and people who need help than give to the government to do what they choose with my hard earned money. If you look at the businesses I was opening, a big reason was to help give easy relaxed jobs to people I know. Of coarse I want to make a small profit, but that's not my only reason for trying to start these companies.

I do own a business, Hell - by 15 I was already working on finding ways to generate income on my own. I've always had a true entrepreneurial spirit. My "significant other" owns a business as well - and we're looking to move that to a brick and mortar soon.

There's two approaches I've seen people take with any business or money making venture. One is to see a market, know that a certain scheme makes money, and run that scheme. That type of approach makes money, and does for a period of time. However it eventually burns out (because the market changes). The blame in this approach is always placed somewhere else, on some change or unforeseen event that caused the business to fail. The second approach is to see a market, and want to conquer it. No matter what happens or changes in the market, the operator is so focused on the future they're prepared and ready to tackle that change. They see it as a challenge and thrive on figuring out a solution and conquering each new issue as soon as it arises. When something in this approach fails, the blame is understood that the person simply couldn't figure out that one problem. They learn with this, they see what they did wrong, they put that knowledge to good use next time and are able to better overcome new issues. This is the type of approach that I've always seen last and do the best. Sadly, a lot of people fall into the first scenario to which they eventually see their profits and business dry up.

They can bitch all they want. But that isn't going to raise their profit margins and solve their newly created issue. Eventually they need to quit their bitching and focus on solutions to the problem. If you're in a business that revolves around the .gov set minimum wage, then you damn sure better be able to crunch the numbers on minimum wage, know how it effects your margins, and know how to handle changes in it's requirement.

See, this is exactly what I'm talking about. Before even getting into an industry which is effected by minimum wage. The business owner should already fucking know the cost margins of minimum wage, how often it increases, what it increases by, and how those will eventually effect margins on the business. It's a part of that business for christ's sake.

Romney's firm Bain Capital specialized in destroying American companies putting American workers out of work for fun and profit yet Minte the champion of the American manufacturer and worker supported him. He also set up outsourcing deals to China while at Bain and invested in a Chinese company through his not so blind trust.

The American worker is in the same position as those small business owners on Main Street who can't compete with Walmart. It's puzzling though that there still are many American manufacturers making products in the USA and thriving - including Minte. Why not Apple then? And VictoriasSecret? And Nike? And .............

How much is health and work comp insurance going up next year? I just got off the phone with Sentry Insurance who has our business so I know the answer.

You will be surprised at the answer I have.

mainstream is boring