Tuesday, December 8, 2009

How Small Businesses Create Jobs

So, FireMan & I are starting a business.

I mentioned this to my dad the other day, and he asked if we had any plans to eventually hire anyone else. We said "no".

He then proceeded to tell me that this is what is wrong with all the government money that is out there for small business. They do nothing to create jobs, or even to improve the economic situation at all. Apparently he had recently watched a program that argued that gov't money should not be given to small businesses because they rarely hire anyone outside of the one or two people actually starting it.
I should mention that now that Dad is retired, he spends a great deal of his day watching various news programs, and C-SPAN. So generally I will accept his words on these items as fact, or at least as the words of a man who has watched and listened to a great deal more on the subject as I have.
But not this time. From the minute he said it, I knew he was wrong. It just took me a couple of hours to realize why he was wrong.

So, using our small business as an example, let me explain.

FireMan currently works two jobs. If his business grows & does well, he will quit his 2nd job to focus more time on the business. Thus creating a job opening that did not exist before.
Similarly with me, if the business creates enough of an income for us, I will reduce my hours to part time, or possibly even quit my current job. Thus creating at least a part-time job opening that did not exist before.

So even though our business itself will not directly create any jobs, the success of the business will indirectly create job openings by taking us out of the mainstream workforce.

Did that make sense?

On the surface it looks like we aren't creating any jobs. But if you scratch thru the top layer, you see that underneath our business will (hopefully) create two jobs.

More importantly, this is another example of why we need to take what we hear with a grain of salt. We need to think for ourselves and create our own conclusions from the bevy of information available. Listen to various viewpoints, research additional info if you feel so inclined, and reach your own educated conclusion.

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