Business 101... split from yacht maint.thread

[bfloyd4445]

Really depends...up in Jersey...every small marine business guy I know in the boating business went out of business or had to consolidate with another more profitable one.

The techs and mechs make less than many counterparts farther inshore and many get laid off for a month or two in the winter.

I make way less than my son who doesn't have a college degree who works for an asphalt company.

Some in the marine construction business...especially after Sandy are doing OK but it's long hours and away from home. After oil spills...a lot of people in the marine industry squeeze that fat cat too but they don't happen every year.

Where I come from the yard may be charging $120/hr...but the tech is only making $15-$25 living in a high cost area unless they want a long commute in the Summer and their benefits might be good but not in many places.

All in all...they are doing WAY better than a cave dweller in Afghanistan...but few if any will ever own boats like many here unless they come into good side money or get it some where's else.

your absolutely right and it irritates me when i see labor rates going up and the guy doing the work gets the same wages or a tiny bit more. Wasnt long ago when the labor rate was twice what the actual labor cost. The idea was the shop should make the same as the worker. Then it became three times the actual labor cost, shop 1/3 worker 1/3 owner 1/3 and now they just seem to look for any excuse to raise the rate without raiseing wages.
A good friend that bought an old auto repair business began by charging twice what his worker cost was back in 1990. At that time he had a profit sharing program in which the workers recieved a bonus at the end of the year based upon what they actually made. Today his workers make from $8-$30 and his labor rate is $110 with the shop full all the time. Profit sharing was ended a few years ago because local taxes went up and he could no longer aford it. Jerry now lives in a multi million dollar home and takes his mom on several guided fishing trips to diferent places around the world each year. He has 8 workers of which 6 do the repair work with only one being paid top dollar.
My question is: How much mark up is fair? Anyone remember the monopoly laws?

 

[rwidman]

your absolutely right and it irritates me when i see labor rates going up and the guy doing the work gets the same wages or a tiny bit more. Wasnt long ago when the labor rate was twice what the actual labor cost. The idea was the shop should make the same as the worker. Then it became three times the actual labor cost, shop 1/3 worker 1/3 owner 1/3 and now they just seem to look for any excuse to raise the rate without raiseing wages.
A good friend that bought an old auto repair business began by charging twice what his worker cost was back in 1990. At that time he had a profit sharing program in which the workers recieved a bonus at the end of the year based upon what they actually made. Today his workers make from $8-$30 and his labor rate is $110 with the shop full all the time. Profit sharing was ended a few years ago because local taxes went up and he could no longer aford it. Jerry now lives in a multi million dollar home and takes his mom on several guided fishing trips to diferent places around the world each year. He has 8 workers of which 6 do the repair work with only one being paid top dollar.
My question is: How much mark up is fair? Anyone remember the monopoly laws?

You have a very poor understanding of what it takes to run a business. The owner provides the shop facilities, heat and utilities, secretarial and accounting services, training, advertising, health care and other benefits, and pays the taxes. He/she has also invested perhaps a million dollars or more that he could have just put in an investment account, and he/she is the one taking all the risk.

The mechanic just shows up at 8:00 and leaves at 4:00. If the mechanic feels he is underpaid, there's nothing stopping him from leaving and going to another shop or starting a business of his own.

 

[Moonstruck]

I sit on the board of an insurance company that provides workers compensation insurance. I am also a certified building contractor in the state of Florida as other states. I see the employment costs from both sides. They have sky rocketed. High medical cost and abuse of the system are just two of the contributors. Meeting OSHA and EPA requirements are also big cost factors. Extra clerical help is needed just to do the reporting required. Both the employers and employees are caught in a squeeze. Yeah, there are abuses on both sides, but for the most part there are no villains. With all the costs it would probably not be possible for an employer to split the labor costs. After all much of his overhead cost is attributed directly to the employee.

 

[psneeld]

Please remember I never said the wages were unfair...just that the yard/company rate isn't usually going in the workers pocket... and the "on the side guys" are all over the map for prices and whether they are even a legal business/pay taxes (so who knows what many of them really pocket).

 

[Codger2]

With all the costs it would probably not be possible for an employer to split the labor costs. After all much of his overhead cost is attributed directly to the employee.

Good to hear someone say this in this day and age. Contrary to popular belief and the news media, the employer has significant costs, brought on by OSHA, EPA, taxes, Unions, rent, insurance, etc. There's no way they can split the labor cost right down the middle.

 

[sunchaser]

Good to hear someone say this in this day and age.

Too few do indeed understand what running a business is all about. The notion that the boat yard workers are underpaid is an age old union vs management debate, even when a union doesn't exist.

As R. Widman says, "just quit" if the pay is too low. Lord knows many of us have done it.

 

[Phil Fill]

Too few do indeed understand what running a business is all about. The notion that the boat yard workers are underpaid is an age old union vs management debate, even when a union doesn't exist.

As R. Widman says, "just quit" if the pay is too low. Lord knows many of us have done it.

I make a point have having my diesel mechanic do some work even if I could do the work myself, and I pay his invoice the day received. Many times I have reminded him to invoice my and have told him his invoice is to low. The reason is he knows me by my name/voice, his name is Phil also, so if I really need him, he is there with in hours/minutes. Mid December the Webasto quite working during the night, called him a 6:30, by 8:00 he was on the boat, found what was wrong, and back up running by 2:00 that after noon. Also I am very satisifed with his work and amount billed.

So its good to be partially yachty!

 

[bfloyd4445]

You have a very poor understanding of what it takes to run a business. The owner provides the shop facilities, heat and utilities, secretarial and accounting services, training, advertising, health care and other benefits, and pays the taxes. He/she has also invested perhaps a million dollars or more that he could have just put in an investment account, and he/she is the one taking all the risk.

The mechanic just shows up at 8:00 and leaves at 4:00. If the mechanic feels he is underpaid, there's nothing stopping him from leaving and going to another shop or starting a business of his own.

[FONT=Arial, Helvetica, sans-serif]The businessman you are referring to wouldn't have that million dollars to invest if it wasn't for his workers. And I said nothing against the owner making a fair profit my observation was simply that the ratio between shop workers wages and the labor charge has grown considerably in the favor of the owner over the years.
I worked for a man once that paid me twice what i thought i was worth. I worked my butt off for him and soon was northern California service manager and also manager of his Emerville office. I would hire people at a low wage then give them raises as they proved their worth. Leonard reprimanded me for that. He told me he likes to pay his people well. I said but why not pay them well after they prove themselves. His reply was to pay them well and give em the boot if they don't make him money .Leonard had already made himself rich twice, retiring twice each time to going broke. Each time he went broke he would start over with a different gimmick and get rich again. Be stingy with your wemployees and they will be stingy to you.
[/FONT]

 

[rwidman]

[FONT=Arial, Helvetica, sans-serif]The businessman you are referring to wouldn't have that million dollars to invest if it wasn't for his workers............ [/FONT]

Not true. Loans, money from other sources, etc. He had no employees when he started the business.

 

[ksanders]

As a small business owner I find it incredible when people will talk about these issues.

As the owner I take all the risk, I work weekends and nights because there is no "well boss I worked hard and couldn't get it done" with a business owner.

Employes are valuable, and they make a wage that is competitive because thats good business. Employees also come and go. I did it as an employee, and I expect that employees will always continue to move to greener pastures from time to time. Thats good for the worker because it broadens their skill set, and its good for the company because it brings in new ideas.

The big thing that people need to realize, and the people I'm refering to are non business owners, is that businesses only exist to make their owners money. Thats it in a nutshell. Businesses exist to benefit the owners and only the owners.

Successful business owners would be very successful working for someone else. The only reason they start or purchase a business is to make more money than they could as an employee.

They certainly don't do it so they can work more uncompensentated hours.

 

[bfloyd4445]

Not true. Loans, money from other sources, etc. He had no employees when he started the business.

But he didnt start makeing real money untill he did have workers. correct?

 

[Codger2]

But he didnt start makeing real money untill he did have workers. correct?

I can hardly believe this! (Sorry! But I see red every time I hear or read quotes like this.) No, that's not correct!
I think the above quote is just another way of saying: "You didn't build that!"

 

[LaBomba]

This is the democratic way and unfortunately democracy is not the "perfect" system either. The owner has the right to make whatever the market will bare and the worker the same right. Abuse however IMHO has affected the world economy. Won't get into politics though that could be dangerous.

 

[bfloyd4445]

I can hardly believe this! (Sorry! But I see red every time I hear or read quotes like this.) No, that's not correct!
I think the above quote is just another way of saying: "You didn't build that!"

you didnt say he didn't build that, i assumed he started with nothing like so many i know have.

[FONT=Arial, Helvetica, sans-serif]I wasn't saying he didn't build the business i was saying that once he/she established a reputation and cliental in what ever kind of business he/she had then he/she had to hire workers in order to take full advantage of the new business and to maximize the return on his initial investment. I mean one person can only do so much so in a day and there comes a point when employees are necessary if you wish to expand.

Even if one invents a new wonder widget he/she will still have to license others to produce the widget and hire others to sell distribute and merchandise his product. All of those people are essential to the expansion of his company and his wealth so should be entitled to just compensation don't you think? Or do you believe that workers are to be worked hard for the lowest wages you can get away with and replaced as soon as they begin to burn out? I' worked for a couple of people like that as a kid and none of those companies ever amounted to much. I also worked for sole proprietorships in which the owners bent over backwards to help there workers and paid more than prevailing rate wages and benefits. I learned a lot from all of them and have run my business accordingly, paying top wages, treating workers like i would wish to be treated in return and I have not been disappointed. ...and i can sleep peacefully at night[/FONT]

 

[ksanders]

This is the democratic way and unfortunately democracy is not the "perfect" system either. The owner has the right to make whatever the market will bare and the worker the same right. Abuse however IMHO has affected the world economy. Won't get into politics though that could be dangerous.

The amount a worker can earn is based on what you/I can hire and train another worker for. The smaller the pool of potential qualified replacements the more the worker will earn. This is true wether you are the worker or the employer.

The amount the employer can earn is limitless. With hard work, a habit of very good business decisions, and yes a bit of luck the business owner can make any amount of money. Thats the dream of running your own business. Thats what inspires innovation.

When you work for wages you will only make so much money unless you are in executive managment at a very large company. Think about it, very few people, regardless of their profession or background, or skills will ever make much over say $125K a year. Very few indeed. Some will but not by all that much.

For business owners the skys the limit. Thats why people start businesses.

 

[bfloyd4445]

The amount a worker can earn is based on what you/I can hire and train another worker for. The smaller the pool of potential qualified replacements the more the worker will earn. This is true wether you are the worker or the employer.

The amount the employer can earn is limitless. With hard work, a habit of very good business decisions, and yes a bit of luck the business owner can make any amount of money. Thats the dream of running your own business. Thats what inspires innovation.

When you work for wages you will only make so much money unless you are in executive managment at a very large company. Think about it, very few people, regardless of their profession or background, or skills will ever make much over say $125K a year. Very few indeed. Some will but not by all that much.

For business owners the skys the limit. Thats why people start businesses.

Your right. You can't get rich working for wages for sure. There are employers that pay more than what the rest of the industry is paying for that occupation and they do this for various reasons, like to keep the union out, employee loyalty, etc. I've worked for two companies that paid far in excess of the going rate and needless to say i worked my thingy off for them.

 

[Giggitoni]

I learned a lot from all of them and have run my business accordingly, paying top wages, treating workers like i would wish to be treated in return and I have not been disappointed. ...and i can sleep peacefully at night

I thought you were retired from the EPA?

 

[O C Diver]

My how times have changed. It wasn't all that long ago when there was 5% unemployment. Employers payed for training and sometimes payed for additional college for their better employees, and sometimes even paid signing bonuses in very competitive areas of the country. In spite of all that, the workers still left whenever they found a slightly better deal. That's been the "future" of employment for the last 20 years. Invest in your employee and they leave whenever something better comes a long, usually without giving notice. Sorry if I don't sound overly sympathetic, I owned one business for 20 years. Had mostly good employees, and a few that I don't think nice thoughts about. Been self employed since 1984. With all the bovine excrement that has been added over the last 20 years from the feds, state, county / city, for employing people, I would never have employees or a retail store again.

When I closed my retail store and based my business out of my home in 2004, my motto became, "Stay small; Keep it all".

Interesting statistic: Over 80% of all business in the USA have no employees (other than the self employed owners).

Ted

 

[LaBomba]

The amount a worker can earn is based on what you/I can hire and train another worker for. The smaller the pool of potential qualified replacements the more the worker will earn. This is true wether you are the worker or the employer.

The amount the employer can earn is limitless. With hard work, a habit of very good business decisions, and yes a bit of luck the business owner can make any amount of money. Thats the dream of running your own business. Thats what inspires innovation.

When you work for wages you will only make so much money unless you are in executive managment at a very large company. Think about it, very few people, regardless of their profession or background, or skills will ever make much over say $125K a year. Very few indeed. Some will but not by all that much.

For business owners the skys the limit. Thats why people start businesses.

I don't disagree with anything you are saying, but regarding the Ops initial question, is it still working today as it used to, what has changed? Have a look at Ed Asner's very controversial video, it's interesting and I am not saying it is ALL true but he may have a point and I am certainly not smart enough to fix the system just trying to understand it like many.

Tax the Rich: An animated fairy tale - YouTube

 

[bfloyd4445]

I thought you were retired from the EPA?

yep, and soon after i also phased out my honey business. After retireing i found i no linger had time for anything cept hiking, fishing, and learning how to make my farm profitable. Bought the farm back in 2003 and immediately was approached by my neighbor whose family pioneered the valley and at one time owned all of it with a proposition to use my land for cattle. The cattle thing would full fill my ag exemption requirement and required no effort on my part so i went for it. I bought the place because of all the wild blackberries to use for making honey. I still produce blackberry honey which is sold to my ex beekeeping partner and old customers. I tried other berries with out success but am now going to try growing rasberries and blackberries commercially. I have a caretaker that does most of the work i just tinker and go fishing hiking crabbing whatever. Next month, after tqaxes, its off to the desert where its warm for a few weeks. Come on down, I will be somewhere in the Anzo borrego State park in southern california.

 

[Codger2]

The cattle thing would full fill my ag exemption requirement and required no effort on my part so i went for it. I have a caretaker that does most of the work i just tinker and go fishing hiking crabbing whatever.

So, I assume you split the profits right down the middle with your caretaker?

 

[ksanders]

I don't disagree with anything you are saying

Ok Labomba, here's my post, so lets try this again.

The amount a worker can earn is based on what you/I can hire and train another worker for. The smaller the pool of potential qualified replacements the more the worker will earn. This is true wether you are the worker or the employer.

So you do not agree that the wage a worker earns is based on "market rate" for that skillset? then tell me what a workers wages are based on?


The amount the employer can earn is limitless. With hard work, a habit of very good business decisions, and yes a bit of luck the business owner can make any amount of money. Thats the dream of running your own business. Thats what inspires innovation.

so you do not believe that an employers potential income is limitless. OK, tell that to any very successful business owner. Lets start with Mr dupont, or Mr Rockefeller, or for a modern one Mr gates.

When you work for wages you will only make so much money unless you are in executive managment at a very large company. Think about it, very few people, regardless of their profession or background, or skills will ever make much over say $125K a year. Very few indeed. Some will but not by all that much.

OK, so you think the wages a worker can earn are unlimited? or are you having a challenge with the figure I posted?


For business owners the skys the limit. Thats why people start businesses.

Why else do people start businesses again???

 

[Delta_JimS]

SeahorseII,

You left out the ambulance-chasing, blood-sucking lawyers....

 

[ksanders]

Ok Labomba, here's my post, so lets try this again.

The amount a worker can earn is based on what you/I can hire and train another worker for. The smaller the pool of potential qualified replacements the more the worker will earn. This is true wether you are the worker or the employer.

So you do not agree that the wage a worker earns is based on "market rate" for that skillset? then tell me what a workers wages are based on?


The amount the employer can earn is limitless. With hard work, a habit of very good business decisions, and yes a bit of luck the business owner can make any amount of money. Thats the dream of running your own business. Thats what inspires innovation.

so you do not believe that an employers potential income is limitless. OK, tell that to any very successful business owner. Lets start with Mr dupont, or Mr Rockefeller, or for a modern one Mr gates.

When you work for wages you will only make so much money unless you are in executive managment at a very large company. Think about it, very few people, regardless of their profession or background, or skills will ever make much over say $125K a year. Very few indeed. Some will but not by all that much.

OK, so you think the wages a worker can earn are unlimited? or are you having a challenge with the figure I posted?


For business owners the skys the limit. Thats why people start businesses.

Why else do people start businesses again???

OK so I feel stupid now...

you don't disagree with anything I'm saying...

wonderful Kevin, less coffee in the morning.

my apologies Labamba

 

[bfloyd4445]

So, I assume you split the profits right down the middle with your caretaker?

tricky question......chuckle...no, the expenses come out first then we split if there is any money left. Geez.....

 

[Codger2]

Now, we're on the same page!

 

[bfloyd4445]

Now, we're on the same page!

We always were just you didn't reqalize it untill now.....chuckle...

time fur a toonie?

 

[LaBomba]

OK so I feel stupid now...

you don't disagree with anything I'm saying...

wonderful Kevin, less coffee in the morning.

my apologies Labamba

Not a problem Kevin, we all have those brain farts now and again.

Allan