Par For My Course
August 31, 2012 Leave a comment
For fifteen years I was one of three partners in a manufacturing business, a business that I helped start from scratch, a business that when I left had sales revenues close to twenty million dollars.
Before starting the company I met with two friends. Each of them wanted to leave the company we were all working for. The three of us knew that the company we were at would soon fold. The owner had mismanaged the company into the ground, causing many to be fired. Soon the owner would take the assets out of this failed company and go start another business. We saw what was coming and so we decided it was time for us to set our sights higher and take care of our futures.
In the failed company the three of us soon-to-be partners were the three people who knew how to make the equipment being sold. And, though only one of us had a BS degree there were plenty years of experience between the other two partners. Each of us had met with customers and we knew manufacturing. We didn’t know all there was to know about running a business but we did want to find out for ourselves.
My own experience developed from many years of electrical engineering and design in the manufacturing sector. Over time I managed groups of designers and electricians. There were also many times when I was a welder, a fabricator, an electrician. I taught myself how to use AutoCAD and Microstation CAD design software. I taught myself how to program PLCs and computers. I went to night school to learn accounting, economics and business. I took math course, physics and welding. In order to commission equipment I traveled thousands of miles to customer sites across America, Mexico, Canada, and as far as Korea, Poland, Saudi Arabia and Brazil. I learned by applying myself to the task, by learning what I needed and simply by doing.
After several after-hours discussions at a local bar the three of us decided which day we would leave the troubled company to start our own business. Being integral to the functioning of the business our concurrent departures would mean that the company would rapidly fold. The company did close within a year. We went off on our own with no nets beneath us and just our own will to make things happen.
We began our business in a basement. We invested $3000.00 in start-up capital. We each claimed a share of equity in the new firm, incorporated as a Delaware corporation.
Now I have to tell you, starting a business with nothing but sheer determination is not easy. The risk of no immediate sales and therefore no paychecks for weeks and months is ever before you. With this in mind we began to solicit business by sending out business letters telling a broad spectrum of customers about our new venture. We even begged for business, often drastically discounting the sale just to get our foot in the door and to keep it there.
While we advertised I also set up the computers and the accounting system using what I learned at night school. I set up the accounts: Accounts Payable, Accounts Receivable, Assets, Revenue, W-4s, etc.
Over time (almost a year after starting) we received our first purchase order. I had developed a small position indicating device that could be readily used in the plastics industry to control plastic sheet gauge – a necessary requirement for thermoforming companies. We sold one and then two. I was then sent to California to install the later-to-be patented device. I had to make sure that our product did what we promised it would. Once it was proven we invoiced our first receivable.
We slowly gained sales momentum from customers who knew our reputations and knew of our capabilities. We sometimes over sold ourselves just to get in the door. There were many quiet anxious days along the way waiting for something bigger to break. When things did start happening we rented a small industrial building and set up what little we had. As orders came in and invoices went out we were then able to buy computers, software, drafting tables, welders, paint equipment, hand tools and a truck with our company name.
We soon hired staff: a fabricator. As business continued to grow over a time , a seeming eternity for us with our shoe string budget, we added more and more people. When I left the company there was over fifty employees on the payroll. This company, currently housed in a 325,000 sq. ft. building with large overhead cranes, is now doubling it size, building an expansion on the same site.
The reason I left the business and cashed out was simply the fact that the work of starting a new business is a 24/7 job. This intensive venture took a toll on me and my family. There were many nights away from my family. There were many intensive phone calls with clients. As the Vice president of Engineering I spent many hours trouble shooting customer problems in person or over the phone from home. I spent a lot of time interviewing people and then hiring and firing as needed. I supervised design work and managed over a dozen people, all engineers. I was on call constantly.
In the early days of our company I multitasked. There were only three of us and one of us had to go on the road to do the cold calling. I stayed with my other partner and we did what was needed. As an order came in I would create the electrical schematics on a drafting board, I would then order the parts. I would receive the parts, sort out the paper work, input accounts payable, print out checks on a line printer and then send out the checks to vendors. I would assemble the large-scale equipment by hand: I welded half-inch plates of carbon steel to create structural frames; I assembled control panels and wired the instrumentation. I also spray painted the finished products. Before that I would power up and test the equipment. I was front office, plant, truck driver, assembler, engineer and tired but excited. I was working for myself and creating growing equity. My piece of the pie was growing.
Until you’ve done something like start a business from scratch you would have no idea how intense, exhausting, scary and pleasurable it is to make your way in this world with just the work of your own hands. But the excitement doesn’t stop there.
As the company grows you hire people. But it is a scary proposition. You know you need more help but you don’t know where or when the next order is coming from. You bite your nails and finally say “OK, we need someone. Place the ad.”
When you hire someone and train them you’ve given them hope. At the same time your own stomach is wrenching with the fear that someday you may have to lay that person off if business drops off. It is all risk, calculated risk and that is what entrepreneurs do best: find a venture and put themselves and their money at risk in order to create something successful and to gain a return on their investment – an investment of dollars and tons of sweat equity. Obama knows nothing about what I talking about.
Obama risks nothing. He finds safety in numbers, in government. He is the child of safety nets. His absent father gave him no guidance whatsoever about business. It is apparent from Obama’s biographies that Obama learned to hate anything which might smack of colonialism. And Obama has wrongly conflated capitalism with colonialism. Obama’s only claim to success is his community organizing. We can see now that his organizing is nothing more than organizing taxpayer money to the benefit of his political gain.
No government built our business. Government with its ever-present paper work and regulations was ever the impedance to growing our business and hiring more people. Government now, in effect, hinders human flourishing. And I don’t have to tell you that Barrack Obama wants more government and less independent success. You’ll have to ask him why he hates business and demonizes success.
Sweat equity built our successful business not government. And it was not Obama, not Elizabeth Warren, not roads and bridges, not the IRS, not organized labor and not the three thousand dollars of start-up capital back in 1988. We built it with our own hands while paying corporate taxes up to 30%! Obama can kiss my sweaty ass!
Listen Obama (I know I am speaking to deaf ears) – “There is no sweat equity in golfing.”
******
Cindy Wity 
The Hand That Feeds You
September 24, 2012 Leave a comment
Photo added, H/T LegalInsurrection
“You didn’t build that.” We’ve all heard those dismissive words in the news recently.
Luckily, for all I involved, when I heard those words I didn’t jump up run out and burn an effigy of BHO or stampede my local DMV. I guess that’s because I didn’t inherit the Islamist strain of thin-skinned believer DNA that makes one go berserk at the mere thought of someone trivializing what they hold to be true. I did yell at the TV, though: “You’re full of yourself BHO.”
I am an ardent believer in the constrained view (see below), the view that incentives, individual hard work and prudent trade-offs builds houses on stone foundations. The unconstrained view of good intentions, big government and “divined” solutions builds houses on sand. And we all know what happens to each house when torrential rain comes. And, we all know what Liz Warren’s government built road to hell is paved with.
There is a reason why BHO diminishes the individual effort. BHO, of the central planning view, wants joy-stick control of the “invisible hand.” And I am not talking about “Thing” from the Addams Family comic or the other-worldly operator of the Ouija board.
The “invisible hand” of the market is a metaphor used by the father of modern economics and capitalism Adam Smith. Simply put, the metaphor describes the self-regulating behavior of the market place. Individuals seek to maximize their own gain in a free market society where goods and services are traded in a free exchange between both parties. For Smith the” invisible hand” guides individuals into mutually beneficial exchanges. Moral and socially beneficial behavior is evoked through the process. Fairness is part and parcel of market practices. Obeying the rules (i.e., standard weights and measures) is the order of the day in the market place. Contract laws were developed to help enforce agreements. If an agreement was broken a resolution in a court of law would be required. This is just and fair to everyone involved, because everyone is involved in protecting their own interests. Free market capitalism offers “The possibility of cooperation without coercion” as Milton Friedman, a Nobel Prize winner in economics once said. Regarding one-on-one resolution Jesus did say, “Settle matters quickly with your adversary who is taking you to court. Do it while you are still with him on the way, or he may hand you over to the judge, and the judge may hand you over to the officer, and you may be thrown into prison.
Adam Smith theorized that the self-interest of individuals acting independently will lead to a socially optimal outcome. From Smith’s Wealth of Nations, Book IV, Chapter 2:
Free market exchange encourages a man to, let’s say, go fishing. The man may eat the fish he caught or he may trade for something that will benefit himself. The fisherman is not coerced into doing either. He is free to do as he pleases with his fish. And another is free to trade with the fisherman – say, bread for fresh fish and both parties therefore benefit from the trade-off. The second party is also free to simply say “No, I don’t want your fish. I want to make tacos al pastor today.”
Again Adam Smith,
On the other very visible hand, the well-intentioned-solutions hand, the government confiscatory and coercive hand taxpayer money is simply thrown at problems. Data abounds showing that well-intentioned-solutions (i.e., food stamp programs, Obamacare, minimum wages laws, etc.) never ever ever fix problems they were intended to solve. The “solution” is never a mutually beneficial exchange. Rather the solution is a one-way, one-time meal ticket that will always end up requiring more taxation, more regulation and less of your liberty. The only fishing taking place is in the mail box for the food stamps. BTW: The hand that provides the food stamps is an iron fist – “Do as I say or you will end up hungry,” “Buy health insurance or pay a tax penalty.”
Now, Adam Smith, and later Noam Chomsky invoking Adam Smith, warned of an unrestrained free market society where the “vile maxim of the masters can be pursued without undue interference.” In other words they thought government regulation (Smith much less, Chomsky much more) would hold the free market in check. One example: the fisher folk would not be allowed to restrict the wee folk from fishing, thereby preventing a monopoly on the fish market.
From what I can tell, both BHO and Chomsky see big corporations and Capitalism in general as behemoth American Devils who suck the air out of the world leaving societal corpses in their path. In each their own measure they see the free market, left on its own, turning into unconstrained selfishness. Yet, they see themselves as altruistic. And as a result of such myopic views of the free market and of themselves they are eager to throttle the life out of the free market with very visible “hands”, the hands of government regulation, taxation and confiscation – the hands of coercion. They truly believe that an unrestrained socialist statist (central planning) government under the guise of a (small “d”) democracy would be superior to an unrestrained free market within a big “D” democracy. But government, if you haven’t already noticed, is a monopoly. It is an all-powerful, ready-to-inflict pain monopoly. Who is holding the tyranny of government back? Not good intentions. Not nebulous open-ended “social justice” solutions. Not the voters. Take a look at congress – there are a lot of visible hands in the pie, grabbing at taxpayer money. They’ve want their clutches on your property because controlling redistribution is a means of staying in power.
The so-called “unrestrained super-national corporations” are in reality restricted to what the markets will accept. Countries all around this world invite corporations into their realms because they see the benefits. These corporations are not coercive like government is. And don’t think for a moment that your vote will restrain government. Those in power like to stay in power and to wield that power. They pass laws to keep themselves in power as State CEOs. Good intentions and redistribution solutions are simply “goodies” thrown out during the campaign parade. The public is left with the big mess after the parade.
My answer: Laissez-faire – a “hands-off” economic environment made possible by a majority vote for smaller government (big D, small g), less regulation and fewer hands in the pie. Vote for the person and party that will let you keep your money and control your life. You know what I am saying– restore LIBERTY. The end result will help generate the dynamic green energy needed for human flourishing. Human flourishing will then enable people to not have to think so hard about scrapping together an existence or worry about whether the hands of government will snatch away your property. Human flourishing will also allow more time for the sublime.
So, put your hand in the hand, the “invisible hand,” and let conscience be your guide, not the government.
“Love your neighbor as yourself.” (A free will-free market exchange moved by the Invisible Hand of love.)
“Lazy hands make a man poor, but diligent hands bring wealth.” Proverbs 10:4 (A statement of fact from the wisest man who ever lived – Solomon.)
Sally Paradise: “I built it with my own two hands.” Invisible hand: “And I helped.”
Definitions:
Laissez-faire (i/ˌlɛseɪˈfɛər–/, French: [lɛsefɛʁ] (listen)) is an economic environment in which transactions between private parties are free from tariffs, government subsidies, and enforced monopolies, with only enough government regulations sufficient to protect property rights against theft and aggression. The phrase laissez-faire is French and literally means “let [them] do”, but it broadly implies “let it be,” “let them do as they will,” or “leave it alone.” http://en.wikipedia.org/wiki/Laissez-faire
Constrained view: The constrained vision sees man as he really is: self-motivated. This realistic vision sees man as selfish and greedy but also willing to respect tradition and rules and certainly able to make prudent trade-offs based on knowledge gained from centuries of accumulated knowledge and wisdom, knowledge and wisdom not confined to an omnipotent Decider. One with a constrained vision doesn’t have all the answers. He or she must operate with humility, tolerance and cooperation in order to support the freedom and liberty within which they seek to live.
Unconstrained view: The unconstrained vision relies heavily on surrogate decision makers, men or women of “superior” intelligence and virtue, to make our decisions for us. The implication of this vision is that the common man does not know what is good for himself and for those around him. But those with super-rational intelligence and sincerity do. And because of our lack of “fair and just” decision making, we the people need an over-arching Decider – someone to rein in society. (Recall Obama’s statement: “You didn’t build that.” He’s trying to rein in economic activity and attribute a man’s own blood, sweat and tears to government largesse!)
See my post What’s Left? To Be Decided for more information on the Constrained and Unconstrained Views, terms derived from Thomas Sowell’s book Conflict of Visions.
Statism/centralized government: Course Correction Needed 2012
Things to ponder:
Michael Boskin: Obama and ‘The Wealth of Nations’
Thomas Sowell: The Fallacy of Redistribution
Obama “Goodies:” http://www.youtube.com/watch?v=tpAOwJvTOio&feature=player_embedded
“You didn’t build that. Yadda, yadda, yadda.”
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Filed under 2012 election, Article, commentary, Conservatism, Political Commentary, Progressivism, Writing Tagged with 2012 Presidential campaign, adam smith, capitalism, Economics, free market economy, Liberty, Obama, politics, socialism, wealth of nations, wealth redistribution, You didn't build that