FW: To All My Valued Employees, (ANOTHER PERSPECTIVE & MUST READ)

[go boater]

To All My Valued Employees,

There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country.
However, let me tell you some little tidbits of fact which might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You've seen my big home at last years Christmas party. I'm sure; all these flashy icons of luxury conjure up some idealized thoughts about my life.

However, what you don't see is the back story.

I started this company 28 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.

My diet consisted of Ramen Pride noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn't have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom's for the latest hot fashion item, I was trolling through the discount store extracting any clothing item that didn't look like it was birthed in the 70's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year-old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Mercedes, the vacations... you never realize the back story and the sacrifices I've made.

Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.

Yes, business ownership has is benefits, but the price I've paid is steep and not without wounds.

Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes.. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct. 15th, I wrote a check to the U.S. Treasury for $288,000 for quarterly taxes. You know what my "stimulus" check was? Zero. Nada. Zilch.

The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (Read: Stole) 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.

Here is what many of you don't understand .... to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Washington black hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the poor of America are the essential drivers of the American economic engine. Nothing could be further from the truth and this is the type of change you can keep.

So where am I going with all this?

It's quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child's future. Frankly, it isn't my problem any more.

Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

So, if you lose your job, it won't be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the constitution, and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about.....

Signed,
Your Boss

[iguana1]

It is a great letter until the last part. I have lived it. However, there are some problems there.

1) The new adminstration is proposing tax cuts not raises
2) Small businesses (LLC and S-corps) are a at tax disadvantage typically to large competitors which has been excacerbated in the last several administrations through corp loopholes.
3) Small businesses are pretty resilient to tax raises. Taxes go up, you reinvest more in the business and either work towards an exit (sale), dividend out profit or wait for a better time to take profit.
4) In recent times, the biggest incentive change for small businesses has been with the lowering of cap gains it creates a huge incentive to sell. If you can sell for 5x EBITDA at cap gains rates then selling out gives you 7+ years of post-tax income in one shot.

This reads to me like an 'urban legand' that lets people feel warm and fuzzy about their pre-conceived political position. Reality is that the economic and credit crisis is taking a massive toll on small businesses now and many a person who fits the profile of this letter is being wiped out entirely.

[seapower]

small businesses are more resilient to a rise in taxes (you point # 3). Big businesses have lawyer's and accountant's on the payroll and they are a deductable expense, paid to avoid the extra taxes. Us little guy's can't afford the time or money for these luxurie's. We're too busy out here chasing our tail's trying to keep our head's afloat. The old adedge of "pass it on to the customer" is dead. My customer's are having it tougher too and can't afford the extra cost that is past along. Four dollar gas was a good example. I don't know about the rest of the world,but my profit margin is quickly shrinking. We as a whole are reaching a saturation point. I work more hour's than are legal in the employed world, just trying to keep up with the added expense of rising part's prices (that have to be paid for in full before they can go on the shelf), freight, shipping and handling charges,insurance increases, service training,tool expense (all the stuff needed to keep up with the new products)etc... Yes I guess I could just pass it all along to make myself "more resilient",that equal's less customer's (or no customer's),that equal's no income, that equal's closing up shop, that equal's losing my "very modest" home, that equal's food stamp's and welfare. Yes CHANGE IS COMING. I don't want to sound sooooo negative, but I don't ungerstand your math. Frank,SeaPower

[Big Fish Billy]

Too much reading for me, and I don't have any preconceived political opinions, but Bush has put us where we are, and it can't get much worse, a little but not much. Whether or not anyone likes Obama, and I don't particularly, there is no where else to go but up. And quite frankly, he is going to get the credit, deserved or not, of leading us out of wherever we are. He knows it, and can confidently come to work each morning, say and do what he wants, and the economy will gradually come back to life. Anyone can be there, he just happens to be.

[Marlin Mama]

Go Boater: You are a very wise man!

[SeaBiscuit]

Don't let the door hit you on the way out dude! May I suggest Russia (the NEW center of capitalism) for your retirement?
SeaBiscuit

[bigeasy]

has an excellent essay. In fewer words he is saying it is difficult to make a profit from his labors. He is faced with a staggering array of regulations and taxes and actual or potential litigation. He is on thin ice from an economic standpoint. Any further burdens and it is not worth it to continue.


Companies don't leave the US just for the fun of it. They leave in order to survive. We have a hostile business climate which is destroying jobs. We desperately need reforms in taxes, regulation, and litigation. Or we won't make it. Borrowing money is not creating wealth. It will have to be paid back. We are on the wrong path.

[Bligh]

Don't let the door hit you on the way out dude! May I suggest Russia (the NEW center of capitalism) for your retirement?
SeaBiscuit

I think hes just full of himself. Maybe even a Legend in his own mind? I have been in business for my self with many employees and many responsibilities. I think hes just looking for some one else to blame for his failure! If hes such a hard working corporate baron then how could he find the time to compose all that crap? And I think im catching a little bit of jawzs vibes on Marlin Mama. I think she smells something GOLDEN and I smell something fishey? Oh hes so wise! Get a life, It was a text out of a self edicating extrapolation of crap!

[Marlin Mama]

Re: Bligh: I guess I'm not entitled to my opinion!! But yours is oh so important!!

[Marlin Mama]

So we were having a political discussion and because Bligh does not agree with my opinion he has to attack me personally!! That says a lot about your integrity or LACK there of!!