The Purpose of Business?

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I have to ask, as I keep encountering people who seem to think that the whole point is to provide jobs and benefits for other people, rather than turning a profit.

I work for a place that pays poorly, pays next to no rent, uses outdated equipment unsuited to commercial use, and keeps the crew as minimal as possible, and still loses money every year due to food and labor costs and people being unwilling to pay what we actually should be charging, it's enough to make me question the value of owning a business.

I want to open my own shop some day because I have ideas for food that I think people would enjoy and ideas for how to sell it that I think people would respond to, but I seriously wonder if the risk is worth it. In the restaurant business, you're considered to be doing great if you take home $.10 out of every $1 in sales, and many do significantly worse, so best case, in order to make $2000/month I have to do at least $20,000 a month in business, or at least $1000/day as I plan to close Mon-Tue for my own sanity. Compared to my current deal, where I work 40 hours a week and take home around $2000/month with my tips and don't have to put my own money up for no guarantee or work 80+ hours a week like many owner/operators or deal with staffing and payroll and all the other not so fun aspects of running a shop, ownership doesn't look so good.

I'm in an unfortunate position because my profession is historically underpaid and people are not used to what they should be paying for my services, and so the public is also prone to sticker shock when the actual cost of my labor is factored into the menu price of the foods they like to eat. Cooking professionally combines the physicality of a warehouse job with the knowledge requirements of a white collar field and the practiced hands of a skilled tradesman, yet the compensation is less than an entry level sales job, or even the service workers in the same restaurant (I made more delivering pizza than I do running a kitchen). Why this is is complicated, going back to the classical apprentice system, the staging system still used at fine restaurants, the unpleasant work environment and high pressure driving off people who could demand more, etc, but the end result is that prepared food has been under-priced for years, and restaurants don't have many options for fitting in higher salaries.

As a long time restaurant worker, I'm frustrated that I work so hard for so little money, but as a realist and aspiring restaurant owner, I recognize that my situation is not due to greedy owners, but rather to market forces beyond any of our control. What I do know is that forcing restaurants, or other small businesses, to simply pay more in the form of higher minimum wages, is simply not going to work, and is going to have some unfortunate unforeseen (but not unforeseeable) consequences. A good example is already happening at my shop, where the wage for my skilled cooks has essentially been frozen because we have to pay our unskilled dishwashers and counter workers so much, and we're forced to drive those people that much harder trying to get our money's worth, which is enjoyable for no one. Another effect is that we're forced to be much more selective about who we hire, as we're paying too much to take a chance on a high school kid with a good attitude but no experience, we need a 40 year old immigrant who's been washing dishes for 20 years and has a family to feed, since we know he's going to show up every day and work his ass off for the money. Same thing with our counter help, we seek out retired chefs looking for a little extra money and something to do, because we can't take a chance on an inexperienced person, and we can't give enough hours for someone who needs to support themselves (our chef is salaried and fills in the extra hours, usually more than 40). This also closes off the traditional route to learning to cook professionally, working your way up from dish-washing, and forces more and more places to demand cooking school degrees and/or years of experience when hiring cooks, again, for a job that often pays minimum wage or just above.

This is where I get to the meat of the question in the title, as I want to open a business in order to support myself, make more than I currently do, and have the control that I've always wanted, but I'm fettered by people who think that the purpose of my business should be to provide for others. Why can't I offer low wages and a profit share instead of having to pay labor costs greater than the value generated by said labor? Why is it the responsibility of a business to pay what amounts to a tax on low skill labor to subsidize people that the state could take care of? Why should I take all that risk to make even less money and work even harder than I do now? It's particularly frustrating when the same people pushing the laws that make small business so hard are also complaining about disappearing small businesses, without even realizing the contradiction.

Most small business fail, or so I hear. These days it's all about brands and franchises. To stay in it long enough to make a profit you have to be rich enough to handle the early losses.
If you do open your own place you should try to create a brand. Maybe write a cook/anecdote book like, "Recipes from Dox's Kitchen." People will pay a lot for a specialty book, especially if they're tourists. And have a specialty dish.

With regard to the question of incentive for business owners, I have no idea. Again I think you have to be rich to start a business.

Businesses need to be profitable. They also, in my opinion, need to show compassion, too.

Many businesses are more than just profit-making enterprises.

I don't think businesses have a single purpose but business owners who seek to maximise profits will usually also achieve a lot of social goods and regulation often thwarts that.

As long as there are fewer job openings than there are people qualified to do them, employers will have massive power over their employees. I know there are lots of employers who don't want to be exploitative, but the bad ones can ruin everything. You can easily fire and replace a low-skilled employee who asks for a week off, but most employees cannot hold their employer to ransom in the same way. That's why I think we need some protections for workers. We need to be careful that those protections don't affect employment, but that's always going to be difficult.

There might be arguments to be made about relaxing these restrictions for small businesses, but that probably actually increases the regulatory burden because you've got to keep track of which side of the line you're on.

In the future, when ordinary people don't need employment so much (because of a viable UBI or similar policy), we might not need as many protections, and no doubt some sections of the economy would benefit. Until then, restricting growth and hampering some small businesses is the price of workers' rights.

In the UK, some on the left want to ban flexible working arrangements with low minimum contracted hours, which is obvious helpful to no-one - but I think it's right that we ban exploitative practices and ensure everyone has a decent life. Minimum wages are the trickiest aspect. Over here, there are lower minimum wages for under 25s. It's £7.20 an hour to employ a 25-year-old, but only £3.40 for an apprentice or £4 for an U18 who is not being trained. That means that small businesses have an incentive to take risks on young people. Large businesses rarely seem to bother.

Because of barriers of entry into the marketplace, the point is not so much to set standards but to protect the profits and stifle the competition of the big corporations. It's not rocket science, almost any little kid is capable of a lemonade stand or bake sale but those are illegal in a lot of places precisely for this reason. You should not have to be rich to start your own business, to be honest I think some of these rich folks should be brought to heel and that's done by competition and exposing them to market forces as almost all of these big corporate chains are substandard. Walmart actually often advocates for raises to the federally mandated minimum wage as they know their competitors cannot compete with them.

I think as an economy it is the small business owners and JOBS that are important not getting the cheapest crap made by Chinese slaves, that does not make our lives better. We may be distracted by all these electronics now but how much have they actually contributed to the well being of this country? I'd much rather pay more for things in this country and have jobs than be dependent on government handouts to buy slave labor products, we're not a happier or better off people. People make the same argument about illegal immigrants, 'well then who will pick the fruit?' I don't know, Americans with a fair wage and basic protections? I'm pretty sure we had fruits and vegetables before the millions of illegals came to this country. This is all about profit margins for the fattest of cats, they're not just scrapping by but at the tail end of a 40 year megaboom. If they want to charge people out the butt then allow COMPETITION! Competition drives innovation up and costs down!

So which is it? Should "they" butt out and allow competition, or prevent it?

Slavery is not competition. The American worker should not have to be brought down to the level to third world serfs to be 'economically competitive'. This exploitation should not be allowed, I have no interest in favorable trade deals to nations that wish to undercut our workers, that's why I believe in tariffs and import taxes. Tariffs and excise taxes completely funded the US federal government before the implementation of the 16th amendment, I don't see why American citizens should have to pay these taxes and see their jobs are shipped overseas. The argument against tariffs is that the other country will reciprocate but how do you think countries like China/Korea/Japan protect their industries? The idea that they don't work is totally laughable when you look at the transformation of east Asia, obviously it does work. The other reason is that they say that the additional costs would just get passed down to consumers which would disadvantage them against American products but what difference does it make to the American consumer if they are relieved of the income tax? I believe the US has a dynamic enough economy that we don't need to depend on imports for survival. Bring jobs and manufacturing back, close our borders, stimulate growth/development in this country, and the value of American citizenship will go up which is the most valuable thing that most Americans have altho our government allied with big business doesn't like the idea of it's people being prosperous and powerful.

I believe that the purpose of business is to provide appropriate incomes to the owners and their employees, while providing services and products to paying clients.

It used to be embarassing for owners to make riches by paying their employees poorly and raising prices for their customers. Business guilds used to professionally nudge these enriching owners to avoid such practices because they give a "bad name" to the whole commercial community. Then came the 1980s, Amex "gold" cards and Reaganism.

Many owners who still work at their primary place of business know the truism of protecting their customers. I try to shop locally for that reason.

As for restaurants in my state, they are very abusive toward their employees. They rely on paying customers to subsidize their staff expenses through tips. As a restaurant customer, I resent these expectations and poor treatment of employees. If the owners simply raised their menu prices by 15 percent, and yielded that excess income to their employees through higher wages, customers wouldn't notice (much), and employees would feel valued by the owners. In fact, I believe that customers would patronize such businesses even more so.

I think this is the future of restaurant pay scale, an included service charge going into a kitty that's divided daily according to hours worked.

Yep! And, customers could still offer a direct tip if they chose to do so, without the guilt.

Your country, and ever other country, was terrible before the implementation of the 16th amendment and the slow abolition of tariffs and import taxes. The economic improvement of East Asia is directly associated with economic liberalisation and growth. Standards of living have been done huge goods by liberalisation. The economic policies you advocate for were tried for hundreds of years and didn't get us anywhere. The ones I advocate for have led to massive global increases in the standard of living.

I agree that wage undercutting is a serious issue but the best way to solve it is by encouraging China and co. to improve worker's rights, not by tanking the American economy. Alternatively, outcompete China and co. on fair terms by focusing on the things that America is better at. You're world leaders in dozens of fields, make the most of them! That's what has made your country and its citizens prosperous and powerful. Don't use Soviet tactics which everyone knows don't work.

Yeah I don't think China cares what we think, if we press the issue I think they might reply about playing some joke with our coke. Encourage the communist future super power to recognize human rights and respect its worker at their detriment? That makes about as much sense is the environmentalists that think China and India will take vows of poverty and never develop for the sake of 'sustainability', we might do that as they laugh all the way to the bank. I have no interest in competing with slaves, period.

The "tactics" do work, you might find them distasteful as someone devoted to the globalist ideal but all I care about is putting America first and I believe that the world NEEDS the US far more than the US needs the world so why should the US accept being on the losing side of any deal? The rest of the world would just have to take like they do with China because what else can they do? The US should use its economic might to build wealth just as other economic powers have.

The world is big enough to split up among the real world powers and these other powers are already doing what I want to US to do which is to protect its industry. What benefit does free trade with a third world nation have for the US other than cheaper crap we don't need? I know it really helps them out and makes these outsourcers a lot of cash but how does it help the American worker?

I would like to replace income taxes with tariffs and excise taxes, it would incentivize making products here at home and thus jobs. The US should also move to domestic energy sources, what do you think the whole point of that idea is? It's so we can stop involving ourselves in the problems overseas and so we aren't beholden to enemy nations like Saudi Arabia.

I don't think the US was economically feeble before the 16th amendment, we became one of the most powerful countries on earth in the 150 years we didn't have it. It was the income tax and the federal reserve that has debased our currency and has encouraged wild spending way beyond our means, that is what funded two world wars. The US was built on protectionism just as China is now doing. The Asian economic powers protect their industries so why is it wrong for the US to protect their own? Patents, trademarks, copyrights are protectionism so do you oppose those? By the way, China has absolutely zero respect for our intellectual property. China is building themselves into a superpower on our backs, America needs a better deal and I'm sorry if it hurts little countries but we need policy that puts America first rather than some "humanitarian surrender" to the forces of globalism. Yes the US is the leader in dozens of fields and we should enact policies the ensure it stays that way forever.

That, and you don't have the current situation where the waiters are making 50K on 25 hours a week and cooks are making 30k on 70.

And all this while we continue to sell off huge chunks of our country to those in foreign lands who are using the money we paid for the slave goods they produce.

I too, believe that businesses should devote themselves to compassion, and not just the ruthless pursuit of profit...

As such, companies in rich Western countries like the US ought to - in the name of social responsibility and fairness - commit themselves to outsourcing at least 50 percent of their production to third world countries.

After all, the increased income generated in these lesser developed countries (where a much larger percentage of the population lives in poverty - sometimes even on the brink of starvation) would go much further in improving human welfare than keeping production facilities at home among those who already enjoy much higher living standards...

But those damn selfish crony capitalists just won't ship enough jobs overseas... a**holes...

Reagan was correct, but a little ignorant, in saying that the United States should export freedom. If it had done (will do) that, third-world nations could create their own economies (something Gaddafi was becoming more successful in his Pan-African efforts). The globalists, with U.S. government help, showed him, didn't they?

Some of us should face the truth: The globalists don't want a free third-world. No, they feel competition in that idea.

Trump verbalizes his promise to end globalism while, I believe, Clinton sees globalism as a golden calf.