Montana Jones

I-9

She:

Would you like me to mail a copy of my social security card?

Me:

No thanks, just list the number. You are really paranoid about this paperwork.

She:

Well you mentioned big fines.

Me:

I didn't intend to make it sound that serious. It works like this; we have to keep this I-9 paperwork on file for all employees in case some big government person asks for it. If, in the rare one in a bazillion chance that a government fool were to come snooping, we would have to prove that all our employees are eligible to work in the U.S. I have never heard of anyone ever being asked for this paper, but employers are threatened with fines and such to keep us in line. There would only be trouble if we were hiring illegal aliens. Personally, I am pretty confident that you are eligible to work in the United States.

She:

Only for about 40 years.

Me:

Right. So if the government hassles me about providing a job to a law abiding white American woman with a valid social security number, I will be sure to get in touch and get a copy of that document right away.

Labels: conversation, employees, Employment, fines, government, hireing, I-9, job, paperwork, work

Posted by: Montana Jones / 9:43 PM 2 comments

Things I have learned about running a business

I have friends that want to start a small business. I want to give them advice and help them understand what they are getting into, but they are optimistic and enthusiastic and somehow think my insights don't apply to them. I sigh and roll my eyes at them just as they sigh and roll their eyes at me. We are very good friends.

Thinking about the adventure they are undertaking has given me a lot of insight into the adventure I am going through. It has helped me understand some things I have learned. So whether you take it or not, here is my advice for people starting a new business. The things I have learned by running a business.

Everything takes longer than you think it should.

Almost everything I have tried to do in my business has taken longer, and sometimes a lot longer, than I thought it should. Things like hiring employees, changing the menu, printing business cards, making repairs. Nothing terribly hard, but they just take longer than I think they should.

Sometimes it is because you end up waiting on other people. You Email out a question to someone and they take several days to respond. People have to check their schedules, finish their projects, do something in their lives before they can give your issue any attention.

Sometimes it is because you are busier than you think you are. Most jobs have a regular routine with lots of things to do and fitting that one new and extra thing into the schedule is just plain tough. It may be a simple thing, but you still can't stop everything else just to do it.

Sometimes is because of something unpredictable. Road construction delays the trip to the bank or forgetting that one important document and having to go back for it. Your delays could be from illness, or snowstorms or other more important things cropping up. The universe just messes with you sometimes.

I have seen this phenomena before when I was someone else's employee. It was a minor nuisance then, I thought it was an example of the business not being as well run as it ought to be. Now that I am the employer I see it more and more in almost every aspect of the business. It is not just a nuisance, it is a serious obstacle that needs to be planned for and dealt with.

When you are planning your business and your schedule, budget extra time for everything. I don't care what you are trying to get done, be it great or small, everything will take longer than you think it should.

Pay yourself and value your time.

The pay yourself part is hopefully common sense. It is a key point to starting a business in the first place. I have heard from some entrepreneurs the idea that they can just live from the company bank account as needed. When business is good they will draw more cash and live well, in poor times they will draw less for themselves. I'm sure there are many small business people that live this way successfully, but I think it defeats an important part in business decision making; the value of your time.

My philosophy is to put myself on the payroll as the business manager and draw regular paychecks just like any other employee. This has advantages in budgeting, both business and personal, and it makes accounting and tax preparation a little easier. If you ever want more money when the business is doing well, there are ways to get it. Bonus checks or dividends are easy enough.

The real advantage to being on the payroll is that you will know very precisely the value of your time. There are a million things to do when you run a business. Everything from balancing the checkbook to sweeping the floor. If you are paying yourself $10 per hour you can put value on each of those tasks. You can ask yourself "is it really worth it for the business to pay $10 per hour to have the floor swept?" If there is another employee that makes less that $10 per hour it usually makes more financial sense if the lower wage employee did the sweeping while the higher wage employee handles more valuable jobs.

I have seen many business owners trying to save some payroll money by doing the menial chores themselves. Perhaps it saves money, but it also costs time that could be spent on something more profitable.

Another example of the value of your time is in chasing pennies. Comparison shopping can be a fools errand. Say you need something done, like servicing all the fire extinguishers in the warehouse. Start by checking the yellow pages for someone to do this. The first price quote is usually higher than you were hoping for. It is a small business after all and money is tight and if we can just knock a little off this price, things will be better. So you call another service and another and do an internet search and really research that whole fire extinguisher thing. When you finally settle on a contractor you can pat yourself on the back because you got the best deal you could get and saved thirty bucks off the first guys rate. Except for the fact that you blew all afternoon doing it. At your $10 per hour wage it ended up costing $40 of your time to save $30 on an invoice. There comes a point where you will need to quit chasing a good deal because it ends up costing too much. The only way to know where that point is and make a good business decision is to put a dollar value on your time.

Don't take shortcuts.

I remember back in school getting writing assignments. We were supposed to turn in an outline and then do it again and turn in a rough draft and then do it again and turn in the final copy. Talk about a sucky homework assignment, you have to write the same stupid thing three times. A friend of mine had the perfect system for doing these assignments. He would just write the paper. Then he would go through it and take out every third sentence to make the rough draft, and then he would edit that down to the first sentence of each paragraph and make the outline. Submit the parts at the appropriate deadline and you spend way less time doing the homework.

People that know about quality writing are probably squirming at that description. The reason the teacher was so emphatic about the long and ugly process is because those are the steps that are required to produce good writing. The point to the assignment was never the final document, but to learn the process for creating a high quality written work. My friend never understood why he got poor grades in english class and to this day his Emails are painfully difficult to read.

Business is the same way. Making the deposit to the bank is not the point. Closing the sale is not even the point. When you are in business you are going through a process. Planning, supplying, creating, fixing, polishing, selling, servicing, and finally putting the money in the bank. Each step is crucial to what you do before and after. Then you have to do it all again to keep the revenue up. How well you succeed has everything to do with the process and nothing to do with your prowess at making bank deposits.

Some might say that they are improving efficiency, but be very careful that what you are really doing is efficiency and not a shortcut. Efficiency improvements are a similar change to the process, but with a very different outcome. Some rules of thumb: Efficiency will cost you something; shortcuts won't. Shortcuts hurt the quality; efficiency won't.

You can always tell when a business takes shortcuts in their process. These are the businesses that the quality is just not there, or the service is wanting, or you walk away thinking "I can't believe I wasted time on that piece of crap."

This is your business for crying out loud. You should be proud of how well it runs. Your reputation depends on how well you do your job. There are people, customers, employees, suppliers, that are relying on you to do a good job. When you shortcut everyone can tell. Your employees don't want to work as hard, your suppliers stop caring and your customers stop buying. It hurts your business, your reputation and all the people around you when you shortcut the process.

Plan your work and work your plan.

When you first start your small business, you will need a business plan. The only ways you can get by without one is if you are filthy rich and can finance the whole enterprise out of your own pocket, or if the business is so small that you can finance the whole enterprise out of your own pocket. For everyone else you need either bankers or investors to supply the needed money. These bankers and investors won't give you a single damn dime until they see the (formal and written) plan for how you will earn the money to pay them back. In my opinion, if you can't spend four weeks making a business plan you do not have the patience or attention to detail needed to run a business for a year.

The business plan is just the start though. When you get into the nitty gritty details of running a business, having a plan is huge. Sometimes it is as simple as planning the route you will take for your daily errands. When you need to hit the bank, the hardware store, the Costco and the grocery, there is usually a route that is most efficient. It helps to have a plan for what you need at each stop too. The big picture needs a plan too. When you need to do hiring, advertising, procurement and maintenance there is usually an efficient order to do them in. Having a plan for how you will execute each of these items is also pretty key.

Working without a plan means you do things less efficiently and sometimes do things two or three times. This makes your work more expensive and that is death to a small business.

In high season for my business, I depend on a lot of people being in the right place at the right time. That calls for planning. Dinner goes into the oven at a certain time, so supplies have to get delivered at a certain time. For that to happen supplies have to be acquired at a certain time. To make that happen they have to be ordered at a certain time and knowing what to order involves an inventory at a specific time. All these little micro deadlines need to be planned in advance or everything goes to shit in a big hurry. Dinner becomes a fiasco without a detailed plan. Because I spend so much time planning I spend less time dealing with crisis. And because I follow the plan religiously everyone else's job becomes predictable, routine, and dare I say, easy.

Some of these plans get written in big formal looking documents with cover pages and appendixes. Other plans get written on posty notes. Some plans are verbal agreements between people. I have never seen time spent on planning wasted. When you try to do something without a plan, that is when time gets spent fruitlessly.

You are not really the boss around here.

A successful business is all about people. There is the business owner. Sometimes multiple owners. There is staff, could be large or small. Then there are the suppliers. The goods you sell come from someone else. Even if you sell a service you will still need supplies, so the people that supply you count. And then there are other support people around the edges; the landlord, the accountant, the lawyer, the banker. And let's not forget the government. The taxman, the police man, the city council and the governor all have an interest and a say in your business. Last, but not least, let us also count the customer. Every business involves a lot of people.

The smallest business I can imagine effects the lives of only three people (not counting the taxman). A business owner who is also the sole employee and accountant working out of his own home and keeping his money under a mattress. He will need one supplier and one customer to be in business. While I can imagine a business of this small size and structure I cannot imagine what the business does and I would be surprised if the business owner can even earn a living.

A more typical small business will touch the lives of hundreds, if not thousands of people. My own small business has multiple owners, multiple managers, dozens of employees, dozens of suppliers, a reasonable cadre of support from accountants, lawyers, bankers and so forth, and a good deal of oversight from regulatory agencies. When I make a business decision it can touch the lives of easily a hundred people. This does not even take into account the thousands of customers I serve. There are lots of small businesses that touch more people than mine.

There is a romantic notion that the boss is lord of his business realm. That his needs and decisions are the only ones that matter and he can use his capital and decision making power to lord over employees and all that interact with him. Rubbish. Anyone that runs a business this way, especially a small business, is in for troubled times.

The people of a business bring with them a complicated web of cause and effect. For example, if the boss decides to change the budget by cutting wages, then the help becomes disillusioned. Since the boss is not looking out for them they either quit or productivity goes down or quality goes down. This ripples through the company and everyone from the secretary to the customer has to deal with a change in how things are done. So in making decisions, the boss needs to watch out for the interests of the workers if things are to run smoothly. And also watch out for the suppliers interests and the accountants and the city council and so on. Every one of those hundreds of people has the power to make the business owners life more difficult and the power to hurt the company.

When running my business I very rarely feel like the lord of my domain. Sometimes I don't feel like the boss of anything. It is more like everyone else is the boss of me. When I make a decision it is rarely about what I want; it is usually about what is best for the people around me. Strangely enough, that is as it should be for the business to succeed. Business is about people after all. My life does not get easier until I put effort into making life easier for the people around me. I don't succeed until the people I rely on succeed.

Labels: advice, boss, business, employees, Employment, entrepreneur, how to, job, plan, shortcut, small business, time

Posted by: Montana Jones / 9:39 AM 3 comments

Hiring

He:

So are you one of those that hire all the Russian kids?

Me:

No that's the ski resort. It's less paperwork to hire domestically so I prefer that, but I will hire foreigners if I have to.

He:

Why do they have to do that?

Me:

Because Americans are not taking the jobs. I have been recruiting up a storm for the past couple months and I don't have enough applications right now.

Labels: conversation, employees, Employment, foreign, jobs, paperwork

Posted by: Montana Jones / 8:41 AM 1 comments

Dismissing

Hey B_, do you have a minute? Well, regarding our conversation from last night, I cannot accommodate your request. M_ and I talked it over and we had made a different plan and we are not willing to change our plan for you. Yes, I understand there is a way to do what you are asking, but it also says in the employee handbook, which you signed off on, that no employee would get such treatment. I do not believe that when you were hired or at any other time I offered or implied any special treatment for you. Yes, we did do that in 2003, and again in 2005. But this year we are doing it differently. And there is also precedent from 2004 for doing this my way.

You know, B_, the kicker for me, the thing that made up my mind is that you put out your request as an ultimatum. That doesn't sit well with me. I do this knowing about your track record of good work, but I'm not going to let you tell me how to run my business.

Yes, of course you can apply next year. I am accepting of all applications. You know, I learned a lot of things from S_. The rule that he put out and that I will continue to follow is that all applicants are eligible for hire on a competitive basis. I can't answer that. I will do next years hiring next year.

I'm very sorry you had to drive out here to this result. What would you like to do next? Okay. Is there anything I can do to help you on your way? Can I buy you breakfast? B_, take care. I hope you find a successful summer. Good luck.

Later.

He took it pretty well, in his usual stoic way. I could tell he was upset. He made an argument for how we have done this before and that it is really no big deal, but I held my ground. Made me feel like a cold, heartless, ruthless bastard.

I'm worried that he is not going to see past the one little issue. I know that his was a small request and easy enough to accommodate but that isn't the point. This little thing is the straw that broke the camels back. I think he is going to be angry for a while. I just hope that he can find good in this. It would help him so much to see that change can be good. I have never understood how he can be so resistant to learning and growing.

I really hope that he eventually sees past this one issue and that this boot to the behind helps him move on to something bigger and better. Still, it makes me feel like a cold, heartless, miserly, wicked, uncaring, ruthless bastard.

Labels: bastard, change, dismissing, employees, Employment, ultimatum, work

Posted by: Montana Jones / 8:12 PM 0 comments

Working for a living

Me:

So where is it that you work?

He:

I work for A_. I'm a mining contractor.

Me:

And you said that mining is booming right now?

He:

Oh yeah. We need staff badly. We can't get enough people.

Me:

So is this a good job? Like something that someone could make a career out of, afford a house and health care and retire on and all that?

He:

Yeah, last year I think I grossed over a hundred thousand.

Me:

Yeah, you could buy a house with that. Ever since I moved here I have been trying to figure out the Montana economy. I see help wanted signs everywhere and there are even good opportunities like yours but I can't figure out where the people are or what they do.

Guy 1:

I've seen people pass up on a ten dollar an hour job because they were holding out for the big money.

Guy 2:

Kids today don't want to work. They think they can come out of school and be the boss and take charge and make top dollar. They don't understand doing the hard work and earning your place.

He:

Especially in mining. That's just a hard job and there are not many people that want to do it. Even for good money.

Labels: conversation, economy, Employment, jobs, mining, money, Montana, staff, wages, work

Posted by: Montana Jones / 8:10 AM 0 comments

Tell it like it is Sarpy

Ever since the Missoulian posted their uninformed editorials about how higher wages are the magic bullet solution to employment problems, immigration, free trade and whatever else ails you, I have been hot under the collar about this issue.

Sarpy Sam calls it like it is with an excellent write-up and analysis of some current legislation being worked on. Bottom line, it's anti business and bad for Montana.

Kudos also to the Montana Main Street Blog.
More Ways to Sue Employers
Legislative Attacks on Business

Labels: business, Employment, legislation, links, opinion, work, workers

Posted by: Montana Jones / 5:32 PM 0 comments

Free trade and the Flathead

Employment in the Flathead Valley is making some waves these days. The Missoulian has a take on it. Left in the West has a take on it, even David Sirota has a take on it. I think most of them have it wrong on one detail or another.

Left in the West and David Sirota are trying to spin this as some big free trade issue. Reading the comments on the Sirota blog has my head spinning over how out of touch some people really are. There are arguments about the minimum wage and securing our borders against immigrants and free trade agreements and about THE MAN putting the worker down. What a bunch of hookum.

The one tiny little detail that everyone is missing here is why the Flathead labor market is so weird. The Flathead Valley is a retirement destination. Retirees with no jobs and no need for jobs are arriving in droves. They are brining with them retirement money and a demand for services but they are not bringing with them any young people or working class families to provide the services. Demand for services and service workers is outpacing the supply.

To make it worse, the influx of retirees has wacked out the real estate market. Even though wages are above average high in the Flathead, prices of homes are still out of reach for the working stiff. In other words, even with the above average wages there is no incentive for working class persons to move here because there is no place to live and no way to build up a nest egg.

So now we have a supply and demand problem in the labor market. Employers are fighting a difficult fight to simply keep their businesses staffed. Some of the things they are doing includes raising wages and benefits but that does not solve anything when there are not enough workers to go around. So employers have to hire from outside the area. The novelty here is that some employers are looking outside the country.

There are those who call this a free trade issue and think that employers are trying to screw over the American worker by using foreign labor to keep wages down. They say all this is an international free trade problem and an illegal immigrant problem and a higher minimum wages will solve it and border control will solve it and if corporations simply cared more for their workers that would solve it. What a bunch of hookum. This might be true if there was any significant amount of unemployment. Or it might be true if wages for the Montanan workers here were not well above average, above the minimum, and in many cases well above the recently voted raised minimum.

Hypothetically even if we perfectly sealed the borders and totally denied work visas to foreigners and raised minimum wages to the point just shy of shopkeepers going bankrupt trying to meet their payroll, none of that, at least in the Flathead Valley, would make the problem go away. That is because there are not enough workers to go around. There is not enough affordable housing and non-wage incentive to bring more workers in. And the labor demand is still increasing faster than the supply.

In other words it is not a big international free trade issue, it is not a problem with THE MAN keeping the little guy down. It is simply supply and demand doing its thing. Theoretically if things keep going like they are, incoming retirees will eventually decide that the Flathead is too expensive to live in with not enough services and amenities and stop coming or even move out. I think they call this a supply and demand correction. Unfortunately waiting for it to happen is still painful for all the people on the short end of the supply/demand stick.

Sure, if we were to regulate or change some of the free trade labor laws, or use side agreements or whatever there would be some small affect on local labor conditions. But it will not solve the problem or do much to make the world a better place. If we want to improve the standard of living for the working class everyman in the Flathead Valley, don't go looking to regulate the supply and demand of international labor. Wages are already pretty high here, what needs to change is the non-wage incentives for workers to live here. Perhaps some working class tax breaks, insurance breaks, or here is a radical idea. Lets improve on the supply of affordable housing.

To accomplish this I think we need to lower the demand for the Flathead as a retirement destination. One good way would be if Mother Nature gave us a good long, hard, cold, old school, weeks of bitter cold, bursting pipes, car wont start, nasty winter. That would help drive some retirees out. But then again that would make this a global warming issue instead of a free trade issue. How about we just put up some 'Californian go home' billboards. That worked pretty well at solving the meth problem.

Labels: economy, Employment, Flathead, free trade, Labor, opinion, wages, workers

Posted by: Montana Jones / 9:44 AM 0 comments