Employee Experience- Final Thoughts

By Lawrence (*****)

Date 04-01-2012 17:20

Sadly... It looks as if we will have our President a second term (not that the Rebuplican top runners are worth carrying guts to the bear)

So yep... Do it yourself or........ Bid some government work!

By Cumminsguy71 (*****)

Date 04-01-2012 22:41

Eewww, sad to think about Lawrence but our current Republican candidates, a.k.a "Tweedle Dee and Tweedle Dum" don't look like much. At least with Obama I guess you could say he has a clue, what type of clue is still out for debate. Like my Mom always said, "lesser of two evils" sorry way to vote for sure. Might as well go in blind folded!!

By 803056

Date 04-01-2012 17:27

I get the fact that no one enjoys paying taxes, Social Security, Medicare, or workers comp. On the flip side, no one is telling us how much to pay (over minimum wage) or how much charge for our time or our helper’s time. If we aren’t making a profit, it isn’t anyone’s fault other than our own. Whether we work for $10.00/hour or $100.00/hour is our decision. Which market sector we chose to serve is our decision. Service the market that is only willing to pay minimum wage and that is what we can charge. Serve the high end clients and we can charge more. A good friend once told me it is just as easy to say $500 as it is to say $50 or $5. The clients paying $500 for the job figures your work is worth the price. The client that only wants to pay $5 isn’t going to pay the bills or allow us to grow and doesn’t value our work.

We can moan and groan, say it is this president's fault or another, but who writes the tax code? It isn’t the president, it's our congress. What do we get for the taxes we pay? We get paved road to drive on. We have bridges to cross rivers and streams. We have schools that educate our children and grandchildren. A standing military force that provides training and travel opportunities to those that chose to serve. We get Medicare and Social Security when we reach that ripe golden age. I know, I know, each and every one of us is going to be filthy rich by then and we will not need any of those entitlements. I’ve got news for you boys and girls, most of us will not be retiring rich. We will need every penny those entitlements provide. Entitlements, that’s an interesting word to use considering we have been paying into those funds our entire working life.

It is interesting that many of the people that I hear crying the loudest about the government and taxes are the people that have never served in the armed forces or even the Peace Corp. They are usually the one’s that haven’t traveled to other countries and haven’t seen firsthand how they live. They haven’t seen what a society is like that doesn’t provide an education to their children. They haven’t experienced what it is like not to have clean drinking water or food on the grocery shelves when they shop for food. We can cry all we want. I don’t see many people packing their bags to move elsewhere.

It isn’t the president that says we have to carry worker's compensation insurance of our employees; it is our state legislature. By the way, that law works in the favor of the employer by preventing the employee from owning our business, our home, and our future earnings if he gets hurt while working for us. That's right; he cannot sue the employer if he is covered by worker's compensation.

We can boo hoo all we want about taxes and such. It’s just one of the many "pleasures" of being self employed. One alternative many of us have already discovered, i.e., don't hire any employees. Another alternative is to work for someone else. It is our choice; no one is twisting our arm forcing us to be self employed. No one is forcing us to chase the dream. It is our choice to go it alone. Let’s face facts, going it alone isn't for everyone.

The bottom line is there are plenty of employees that literally earn more money at the end of the year than the employer, but the employee isn't having nearly the fun the owner is.

Best regards -Al

By Cumminsguy71 (*****)

Date 04-01-2012 22:36

I agree Al. Hope it didn't sound like boo hooing! LOL!!

Just need to do more number crunching before the next guy is hired to see what goes out compared to what comes in and adjust my numbers accordingly. It was an eye opener though. Actually seeing the numbers and hearing that I pay more for the employee on taxes etc., is what raised the eyebrows and make me say, "huh?". Easily fixed by jacking up the hourly for helpers and such.

Paying a guy $7 an hour to be a helper -vs- paying him $11.50/hour is a world of difference on what kind of guy you'll get. I can hire a "weldor" for $12/hour and it will show in his work most likely. My welder was excited to have almost 55 hours, said, "Friday will be good". It was worth paying him and he did great work. If I hired him again it would be instant raise time.

I guess most of my shock is due to the learning curve and finding out how costly it is. I will say this, anytime the company man says, "We'll supply a helper" I'll smile and say, "excellent!". Talking to several welder/owner friends I've learned more dark secrets of being an employer, costs, etc.

Maybe I should not have said "President" but politicians. From what I've heard the U.S has the highest business taxes in the world, forgive my ignorance if we don't but have better things to do than research that fact. I've been around the world, seen different countries and the one's I've been to looked quite similar to ours other than the culture. Sure, been in the backwoods of Japan and seen some shanty's that people live in. Seen shanty's in other places too. Take a drive around some of the poor counties here in Tennessee and I can guarantee you'll see similar shanty's. I can vouch for it. Have been in some poor counties doing work and been down some back roads and see house's that you are shocked to actually see people living in. I can take you to some right here near my house and we've got the big GM plant and all manner of production factories and such and these places look third world. Go into the hills of West Virginia, friend of mine told me where he lived they still used out houses and didn't have running water.

Taxes are what they are. Was not complaining, just in shock. Perhaps it was my fault for not investigating. Ok, maybe groaning a bit, taxes have run wild in this country. Buy tools and pay tax, every year pay tax on tools you already paid tax on? Yeah, happens here and just makes me scratch my head everytime I send the check. Bought a house, paid taxes, lots of them. Every year pay property tax on the land I've already paid taxes on. The school tax and such is something I understand but taxing what I've already paid taxes on?? Reminds me of some issues folks had over 200 years ago involving a King.

I must agree with the fun part. I'm working, making some kind of money I suppose. Wife keeps asking when it's going to get better. Told her the more I make the more I have to give out it seems and somehow as a friend put it, "you have the same thing leftover that you had years ago". I enjoy the freedom, the control of the business and the chance if I can afford it to just lock the doors and head to the beach for a week for a bit of unwinding. Variety is good, not in the same place or same job so it keeps my ADD at bay!! Would get bored as an employee, same hum drum life day after day....blahhh.

Like I said Al, just need to do more number crunching and find out costs and adjust accordingly. Simple solution if I were to hire again.

By 803056

Date 04-02-2012 02:35

It is something every business owner discovers when they decide to expand their business. Hard cold numbers tell the truth about being in business. What you have discovered for yourself is just one reason why I don't have any employees. You haven't said anything about the liability you incur if they screw up on the job or they crash a company vehicle.

My relatives think I must be rich because I am self employed. I make so "much more per hour", but they don't see the reality of where the money comes from and where it goes. They don't understand why businesses demand such high prices when they have work done on their car or when they hire a plumber ot electrician to do something around their home. The average hourly worker doesn't see or understand the actual cost of doing business. They just figure all business people must be rich!

I've always said that everyone should try to be self employed for a year. There is a big difference between working part time for a few extra dollars and actually making a living as a self employed person. It is an education when the newbie has to pay their own medical insurance, their full share of Social Security and Medicare, liability insurance, sales tax, equipment purchases and repairs, rent or mortgage on a shop, a vehicle that is dependable, etc. Working for someone else isn't as bad as they first thought. Like I said, being self employed isn't for everyone.

I wouldn't have it any other way. I enjoy the freedom self employment offers, but there is a price to pay and it is a steep price. Gone are the 40-hour work weeks, gone are the paid vacations and holidays, gone is the 401K and pension plans, overtime pay, what's that? You either love it or you find a job working for someone.

Best regards - Al

By Cumminsguy71 (*****)

Date 04-02-2012 10:28

So true Al! I left out the employee liability thing as I know somebody who has experienced this first hand. Another friend mentioned when they screw up something on a job and then you have to pay them to fix it or fix it yourself. He said if he screws up then he's just fixing it not paying a guy to do it twice!

By 803056

Date 04-02-2012 13:27

Good business takes planning and foresight. You have to have a contingency plan for when the unexpected happens. Planning makes the need for contingencies less likely and makes recovery much easier. Part of that planning effort is the quality control plan that is put in place to ensure everyone does do what they are supposed to do when they are supposed to do it. Checks and balances keeps the project on course and on budget.

The employees of the company are the gears that provides the motive force to get things done. If the gear isn’t right for the job, the machine breaks down and no one goes anywhere. If the employer decides to buy a low price gear and doesn’t pay attention to the quality of the gear, the machine isn’t going to last. It is a case of, “You get what you pay for.” Pay a premium for a high quality gear (or a high quality employee) and the machine will run longer, quieter, requires less maintenance, and is more efficient than the inexpensive gear.

The price you pay for the high quality gear is no different than the high price you pay for a highly skilled, well motivated employee. Just like the gear box that is constructed with high quality components that needs your attention once in a while, the high quality employee that is self motivated and skilled requires less oversight than the less expensive employee that may or may not show up to work on any given day and needs minute by minute oversight to make sure he stays the course. The higher priced employee may be the real bargin when all the costs involved are considered.

From your post I would say those are lessons you are well aquainted with already.

Best regards - Al

By Smooth Operator (***)

Date 04-04-2012 03:39

Al, Good response but you also have to remember!!! Almost to a man EVERYBODY claims to be a GOOD gear!!!!!! Gotta' root thru ALOT of gears to find a good one. After 30 plus years I'm tired of looking for GOOD gears to keep expanding!!!!!! :mad:

By dbigkahunna (****)

Date 04-03-2012 01:53

I was taught to calculate wages, overhead and margin the followng
Base rate/.65 which gives you 35% for keeping the lights turned on, paying the taxes, insurance and doing the payroll
You take that number and use a divisor for your profit margin.
Take you are paying 11.00
11/0.65= 16.92 per hour
You want a 15% profit margin
16.92/0.85= 19.91 per hour as your cost for that employee.

By Metarinka (****)

Date 04-11-2012 19:29

You are right in that the corporate tax rate is high

we make up for this by having extremely low personal taxes, no value added tax, and no federal property tax. Overall our tax burden is lower than just about every other 1st world country.

Public services such as roads and, military and a police force have to come from somewhere. Alternatively I suggest the ivory coast or somalia, they haven't had a function government in decades and there's no taxes to pay.

the real lesson here is to do your homework, get in contact with an accountant and make sure your numbers come out right. There will always be overhead per employee such tax burden should of been accounted. I run a side business and it lets me reduce my overall tax burden (or make additional income). I spent a good time studying the books though to make sure my prices are where I need them.

By Cumminsguy71 (*****)

Date 04-12-2012 17:29

Nice charts. It all worked out with what I billed per hour it was just an eye opener at what it actually costs for the payroll taxes, unemployment.

By Sourdough (****)

Date 04-14-2012 16:19

Well mister, I have been saying it for years on this forum, and in my real life here in the land of marginal intelligence, and predominant apathy too;

We blue collar types run the country, and we pay for every lazy pile of **** to sit at home and smoke crack, beat their kids, and steal the neighbors bbq grill, while the years go rolling by. It's true.

The only way it will change, truly change, is if quite a few of us with the brain and the conviction to fight for what is right, simply refuse to pay our taxes. The country would go completely broke if a fifth of us did it. A fifth............

Fact.

By bozaktwo1 (***)

Date 04-17-2012 16:56

And this would benefit my quality of life how? Right. It wouldn't. In this modern age of a global economy (which is so diverse and complicated that it will likely take several more decades to stabilize...if it ever does), one segment of a population is not going to benefit by setting itself aside. That one fifth of the working class not paying taxes drops out of the tax base, then what do you suppose would happen? Where does the axe fall first? Social services, schools, public emergency services, hospitals. Cut funding to those things, and up goes the crime rate. Infrastructure maintenance: roads, dams, bridges, power grid, rail, etc. Cut funding to those things and watch the cost of living rise exponentially. So, teach your children right. Grow them to be productive citizens and not to sit on the couch smoking doobies and playing with the x-box. Vote often, and pay attention to legislation being considered. Hell, run for office yourself; this would take a lot more brass than "fighting for what is right."

By Sourdough (****)

Date 04-18-2012 00:20 Edited 04-18-2012 00:39

You're right. What we should do is succeed at the very same thing that humans have failed at until we are extinct from all our best efforts failing us finally, because we wait until the next family does it first, because why should we sacrifice our comfort for the sake of the next generations, because we'll be dead any way, and if it means fighting for what is right, that's a thing of the past, because our government isn't really an evil superpower, and I know if I think about happy things hard enough, all the ugly monsters will just go away.

Well, you would be in the 80 percentile that don't stand up and fight. That's fairly obvious.

I would gladly die fighting for a cause that would reset the fundementals that our founding fathers were wise enough to lay out for us in black and white, so that this nation would be free from tyranny. For the next generation, I would do this, not just for my own child either. Something to ask yourself, when you sit down and think of the worst case scenario for this nation, given the history of us failing at every man made system that we have ever had.

Your mindset is one that propels this nation into oblivion. You want to keep your job and your house, yetthe American dream is on the rocks, my friend. Many folks see me as extreme to a fault, but when there are people killing each other for food when the trucks quit trucking down the interstates, I will be just fine. So will my kid. Because I have the ability to see the gleaming truth about humans, and history.

Oh, and none of this global situation is complex at all. It's about man's greed, and a bunch of good old boys doing what was good for them instead of for our nation. What is so complicated about that? I think you think that the solution is complicated, but that isn't either. Things are way too far gone to turn around by making sure our kids aren't deadbeats. Things are not going to get better. Not in 20 years, not in 50 years. We are headed straight for the next world conflict, and if you don't see that, and believe it, you will probably never worry about things the way people like me do, so you are better off. Ignorant as hell, but much better off while you exist here on this planet.

Why do you think the real reason is, that people fight nowadays?

Why did people fight a couple generations ago when things were as bad as they could be?

Third and final question: Do you think it's quite possible that we Americans flourished like we did because folks with pitchforks got tired of being oppressed and controlled by corrupt men with money and power?

Right, average folks stood up and fought for what was right. No stupid puppet president will ever change what is happening and has been in the works for how many years now?! It starts with you. What are you personally going to do when nothing gets better?

By Sourdough (****)

Date 04-18-2012 00:43

The rest of you guys know what I am saying, even if you think I'm a mad man anyway.........I rarely speak nonsense.

By Tommyjoking (****)

Date 04-18-2012 02:27

Clap,clap,clap

By Tommyjoking (****)

Date 04-18-2012 02:30

Where does the axe fall first? Social services, schools, public emergency services, hospitals. I doubt it....the current agenda in America is to borrow our way out of debt. Oxymoron if ever one existed. Tighten the belt or die...that is what we have going on and your typical American is way too plush (or just STUPID) to do that.

By Sourdough (****)

Date 04-18-2012 03:29

By yojimbo (***)

Date 04-03-2012 23:55

Al
Your postings detail several important points correctly. Living in a modern society requires the tax revenues to maintain it. I'd personaly like to see more bang for my buck, but who wouldn't. You've mentioned business skills compared to trade skills in previous posts and were on the money there as well. Two seperate skill sets and if anyone thinks learning to weld and fabricate is challenging try to learn to run a business profitably in a planned and controled manner while you're busy 60 plus hours a week doing the building of things as well and you have a whole other perspective on challenge. After 10 years as a licensed contractor/sole proprietorsip focusing on competitively bid public works projects I can attest to your assertion that if your business is not doing well the faut is ones own- a bad business plan. Not getting through to markets? Bad busines plan. Running short of money/capital? Bad business plan. Underbidding jobs/unprofitablility? Bad business plan. The list goes on. After 10 years my business plan boiled down to basically: I'm losing money.....but it's steady. Bada boom. Decided this year to re-form as an LLC with big plans to take on a member and avoid workers comp, unemployment, SS to stay competitive with low overhead for the two large jobs I have signed. Uh-oh. Not unless that member owns 30% based on pre-tax shedule C net, and in any case, based on this years sales volume we'd both get trimmed hard on self employment taxes. Accountant mentions S corp tax selection- which some might want to look into- basic scheme- you pay yourself roughly half your net in payroll the other half gets paid in dividends which don't get taxed as income. The hook? Yup, pay yourself in wages/salary as S corp tax selection requires and you gotta pay all those taxes you were trying to skirt. Gotchya comin and goin. What's that add up to me? Bad Business plan..... or more precisely, inadequate understanding of how business works, insufficient business skills. My solution? These are both cerified payroll public works projects so I'm going to do every damn bit of the work I can by myself, acquire as much expensable equipment and tooling as I can to reduce net and take a hard shot in the ass on SE taxes. Figure it's cheaper in the short run. Hold off hiring an employee untill absolutely neccessary, part time, pay them well but short term to get these jobs out and minimize employee taxes. Not a solution, just a holding tactic. I'm going to do more than 2 1/2 times the yearly sales I ever had so I'll make some money and if I'm smart- of which there has been far too little evidence- I will invest some of it in some business classes [oooo another deduction] to make better sense of what I'm doing. Two things guys might want to talk with an accountant about: S corp tax selection and accelerated depreciation. I don't know squat about the second, when I buy a big item piece of equipment like the ironworker 2 years ago I section 179ed them on my sched C and caught no flack. The acountant referenced accelerted depreciation so I am looking into that to lower taxable profit. DabigKahunna gave some formulas for profitablility which work and I have looked at many others and profitablity ratios you might want to research to get a better understaing of your return on investment. Of one thing I am certain, if you're self employed, part time or full, you need to open a SIMPLE IRA. Finest little poor mans tax shelter available. Hide away 13,500 a year from 1040 taxation [if you're over 50, 11,000 for the younger guys] and doesn't cost anything to set up. Last thing- you've been reading the babblings of a self employed welder who's been bangin his head against a stump for 10 years when he could have had a nice quiet life and comfortabe job workin for someone else if he wasn't so damn hard headed, stubborn, ornery and outcastable, and who ain't never gonna go back to workin for The Man. Oh, and Al- might have mentioned this already, but the QA/QC plan was finally accomplished [with the help of a purchased editable template] and presented itself so well as having done my homework [what wth the AWS D1.1 welding procedure I went out and got qualified] I got WSDOT fabricator approval for my little handrail job. Not on the QPL list untill I get a few more under my belt and doubt I'll ever be bidding any D1.5 work, but I was tickled pink. Or maybe I'm just nuts.