That’s a super naive understanding of how it works to “setup a business”, outside of I guess a sole-proprietor tiny little situation.
And regardless - let me ask you, why must it be all or nothing? Under your scenario, I either take all of the risk myself by founding the business, or I am strictly paid in dollars by someone who did, and nothing in between - but why? What’s the argument that this is a good way to do things? Am I not taking some risk by buying into the company I work for? Why is that only an option for the very top of the company? Because “risk” is a misnomer that focuses on the wrong part, and actually it’s freaking great to have a true stake in your place of employment?
I’m not arguing that it’s impossible to start a business, or to work and scrape and get lucky and transition into the ownership class in some small capacity. I’m saying having only a few people have true skin in the game for any business is frickin stupid, a bad way to do things, likely to produce half-hearted efforts from employees, and guaranteed to produce the extreme wealth inequality we see today.
I was referring to a sole proprieter situation. Like I’m a web dev and I could start a PLC, then I could work on a contract basis with whomever I wanted to. At that point I am assuming risk in terms of choosing the correct clients to get involved with and receiving increased financial renumeration.
You’re not really engaging with my points or questions so I’m gonna move on. I understand how the current situation works quite well, having been involved in many businesses in many different roles throughout my life. Most of us agree the way things work today is awful. I was here to explore fruitful changes to make to the status quo. Not to be told how one can, in fact, seek risk through the joys of sole proprietorship.
Its referred to as barriers to entry. These are anything that prevents new startups from occuring. These can be natural or contrived.
As somebody who finally started their own business after 25 years of effort and a lot of luck I know these well.
The largest barrier is usually initial capital. Banks don’t give out loans to startups without assets. So if you have overall negative personal assets like large student loans, renting, car loans, etc you are fucked in getting a bank to fund your startup. I can’t get a line of credit for at least a year, probably 2. At least not one at a reasonable interest rate that doesn’t eatup all of my profit. I ended up taking a draw against expected revenue from a vendor who believes in me.
Health insurance (U.S), literally the reason I didn’t start my business 10 years ago & 5 years ago when I had 2 opportunities.
Business insurance: it took me 5 months to find somebody that would cover me.
Laws and regulations that create barriers to entry. These can be minor annoyance like fees and paperwork or major regulatory hurdles depending on the industry and country.
Infrastructure to conduct the business. I need highly specialized warehousing for 4 months of the year. I ended up renting from a company that is in a similar business as me that runs on a different cycle (they are empty when I need space). Building my own would require a loan… See above.
Available resources: Do competitors limit your available resources by market manipulation and anti-competative behavior. This is a huge one in industries dominated by oligarchies.
There are many more of these that are around.
Most of these can be alleviated by a fair sharing of revenue. 10 years ago I increased the companies net profit from $500K to $10million. They gave me 5% pay raise and $10k bonus out of a “Theoretical” $200K max.
Thank you, very useful to have someone who has done it in the thread. Would you agree that being born into one of the wealthy families in America would dramatically reduce the difficulty and risk of everything you’ve described above? All that stuff sounds so much easier if you’re rich enough to pay others to do a bunch of it, and rich enough to still be fine (even still rich, usually!) if it doesn’t work out.
I don’t understand why you can’t set up your own business if you want to take the risk yourself.
Like going to the bank and asking for a loan to start a new business would be the textbook example of taking on risk.
Why don’t poor people just make more money?
That’s a super naive understanding of how it works to “setup a business”, outside of I guess a sole-proprietor tiny little situation.
And regardless - let me ask you, why must it be all or nothing? Under your scenario, I either take all of the risk myself by founding the business, or I am strictly paid in dollars by someone who did, and nothing in between - but why? What’s the argument that this is a good way to do things? Am I not taking some risk by buying into the company I work for? Why is that only an option for the very top of the company? Because “risk” is a misnomer that focuses on the wrong part, and actually it’s freaking great to have a true stake in your place of employment?
I’m not arguing that it’s impossible to start a business, or to work and scrape and get lucky and transition into the ownership class in some small capacity. I’m saying having only a few people have true skin in the game for any business is frickin stupid, a bad way to do things, likely to produce half-hearted efforts from employees, and guaranteed to produce the extreme wealth inequality we see today.
Edit: bit more detail on my preferred approach
I was referring to a sole proprieter situation. Like I’m a web dev and I could start a PLC, then I could work on a contract basis with whomever I wanted to. At that point I am assuming risk in terms of choosing the correct clients to get involved with and receiving increased financial renumeration.
You’re not really engaging with my points or questions so I’m gonna move on. I understand how the current situation works quite well, having been involved in many businesses in many different roles throughout my life. Most of us agree the way things work today is awful. I was here to explore fruitful changes to make to the status quo. Not to be told how one can, in fact, seek risk through the joys of sole proprietorship.
Cheers, have a good weekend.
Ok happy to agree to disagree. Have a nice weekend too!
Its referred to as barriers to entry. These are anything that prevents new startups from occuring. These can be natural or contrived.
As somebody who finally started their own business after 25 years of effort and a lot of luck I know these well.
The largest barrier is usually initial capital. Banks don’t give out loans to startups without assets. So if you have overall negative personal assets like large student loans, renting, car loans, etc you are fucked in getting a bank to fund your startup. I can’t get a line of credit for at least a year, probably 2. At least not one at a reasonable interest rate that doesn’t eatup all of my profit. I ended up taking a draw against expected revenue from a vendor who believes in me.
Health insurance (U.S), literally the reason I didn’t start my business 10 years ago & 5 years ago when I had 2 opportunities.
Business insurance: it took me 5 months to find somebody that would cover me.
Laws and regulations that create barriers to entry. These can be minor annoyance like fees and paperwork or major regulatory hurdles depending on the industry and country.
Infrastructure to conduct the business. I need highly specialized warehousing for 4 months of the year. I ended up renting from a company that is in a similar business as me that runs on a different cycle (they are empty when I need space). Building my own would require a loan… See above.
Available resources: Do competitors limit your available resources by market manipulation and anti-competative behavior. This is a huge one in industries dominated by oligarchies.
There are many more of these that are around.
Most of these can be alleviated by a fair sharing of revenue. 10 years ago I increased the companies net profit from $500K to $10million. They gave me 5% pay raise and $10k bonus out of a “Theoretical” $200K max.
Thank you, very useful to have someone who has done it in the thread. Would you agree that being born into one of the wealthy families in America would dramatically reduce the difficulty and risk of everything you’ve described above? All that stuff sounds so much easier if you’re rich enough to pay others to do a bunch of it, and rich enough to still be fine (even still rich, usually!) if it doesn’t work out.