Yesterday my friend Kelly over at Facebook shared a story about a one-day strike underway in several cities by McDonald's employees demanding a raise from minimum wage to $15 an hour. Her question...should they get it?
The consensus said no, while we sympathize with their plight, it isn't exactly skilled labor, and there are people waiting in the wings for each of those jobs. It's simple supply and demand (of labor). If they need more money (who doesn't?) they should learn a skill.
But then I wondered....
If a McDonald's franchisee took it upon himself to pay his employees $15 an hour, reducing his profit margin, and advertised his experiment to the public, I wonder if his customers would be appreciative enough to bring in their friends and buy MORE burgers, ultimately making him MORE net profit? Would you go out of your way to patronize such a business?
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Years ago my dad shared with me some business advice that I follow to this day. He said, "A fast nickel is better than a slow dime." He meant it's better to deliver good service and value than to just hold out for top dollar. At the end of the day you'll make more money.
Over the past 30+ years I've put together an excellent group of craftsmen who build my homes. I know for a fact I could get cheaper carpenters, brickmasons, painters, etc, but these guys are good and they take very good care of me and my customers. From what I can tell my gross margin is somewhat less than most of my competitors.
I routinely go back 2...3...4 years after a family moves in and patch a hole in a wall that their rowdy kids kicked in, or replace a piece of hardware that has tarnished, even though their state-mandated warranty period has long since expired, all for free. I'm sure I spend a thousand dollars or more all totaled doing these things every year.
But here's the payback: When the economy went into freefall back in 2008 (and before that 2001, the mid-90's, the mid-80's, etc) and most of my competitors closed their doors (literally), we muddled through thanks to repeat business (unheard of in the homebuilding industry) and direct referrals from previous customers. We never advertise, yet 80%+ of our business comes looking for us.
We're never going to get rich doing business this way....we understand that. We just don't have that "win at all cost" mentality. But we're modestly profitable, we owe no one, and we can sleep at night knowing we haven't screwed anyone.
This is a business model that IMO is suitable for private companies. Few of those companies publicly traded can be this generous. Shareholders demand every last penny profit they can get, and if you can't give it to them, they'll jump ship for a .01% higher return elsewhere.
They don't care who they have to step on to get it, they want their damn money! That's one reason the banks are so crooked. (Another is their bonus depends on it.) Kinda makes you wonder if maybe the Anglo-American version of capitalism hasn't taken just a few too many steroids?
This is a business model that IMO is suitable for private companies. Few of those companies publicly traded can be this generous. Shareholders demand every last penny profit they can get, and if you can't give it to them, they'll jump ship for a .01% higher return elsewhere.
They don't care who they have to step on to get it, they want their damn money! That's one reason the banks are so crooked. (Another is their bonus depends on it.) Kinda makes you wonder if maybe the Anglo-American version of capitalism hasn't taken just a few too many steroids?
My point is....well....I'm still standing. Dad was right. "A fast nickel really IS better than a slow dime." It's a shame more businesses don't "get it".
S
