Entrepreneurialism

An entrepreneur makes something out of very little. Sometimes as little as an idea. Of course the idea needs to be paired up with other resources – time, effort, space – each of which is worth something but might not need the expenditure of money. Ah!  Well there you have the magic word. Money!

Yes, pairing ideas and money is usually essential to building a new business. Entrepreneurs do that. They create businesses seemingly out of nothing although it helps to have some cash around to make supportive things happen. You know, get the idea off the ground.

Couple this activity with use of public assets – infrastructure that others have put in place – and you can have a winning proposition.

We need entrepreneurs. All of us. These folks are creative. They identify needs among us and try to fill those needs. All the while making some income for themselves, a payback on their inventiveness, risk taking, etc. If they are really successful, their new business hires people to do their work and grow the enterprise. If that is successful the business will create more opportunities for employment, investment, and wealth creation as well. And on top of that, taxes. They pay taxes on their real estate, property, profits, excise and other use taxes. In short they help to pay back the investment of all of us in the infrastructure we provided them way back at their beginning.

I wish this stayed nice. And tidy. But too often it doesn't.  Let’s take this business model a little further.

The business grows into a corporation. As income grows so do expenses. Net profit becomes a little more complicated. Margins are calculated. Tax options are considered. Labor costs are weighed against technology investments and mechanization. Wage rates and salaries are debated. Benefits are analyzed. Where to control margins? When to make tough decisions to keep the business financially healthy?

Tax cutting strategies are explored. So too are means of stretching property expense dollars; rent or buy? Build and re-let? Conglomerate real estate investment designed to hide costs and cover taxes? Well let’s give that a try.

And investments. Where do we park our extra cash while earning money on it and yet not paying taxes on that? What other strategies can we try to gain marginal profits?

Maybe we should diversify our holdings and buy into other industries. Could we share their overhead structures with ours? Could we squeeze more utility of each other’s existing cost basis? Maybe we can find more profit dollars that are hidden from the tax collector?

Even a better idea. Place some of our business enterprise in a foreign land. Use their investment incentives to eliminate some costs or boost our profit. Hey, their labor costs are less than ours at home! And no unions! And look! Their employee benefits are partially provided by their national government at no cost to us!  Wow. Look at the margins grow.

What do we do with the profits at the foreign operations? Keep them there. If we bring them back home we pay Uncle Sam, and our state government, too. Well to hell with that!

Jason Read gives us this thought to think about:

“People who dismiss the unemployed and dependent as ‘parasites’ fail to understand economics and parasitism. A successful parasite is one that is not recognized by its host, one that can make its host work for it without appearing as a burden.  Such is the ruling class in a capitalist society.”

Sobering isn’t it? Kind of sneaks up on you.  Who’s the parasite now?

We need each other. We rely on each other. Investors. Entrepreneurs. Risk takers. Idea people. Educators. Technical geeks. Math nerds. Mothers and babies. Fathers and sports people. Male and female. Straight and Gay. Democrats and Republicans. Dumb and smart.

We also need to work together. And trust each other. That takes hard work and deep faith. Leaps of faith. In each other.

Rather than complain and groan, try smiling and a welcoming handshake.

Now let’s all get to work.

July 10, 2013