two questions for business owners

[xxThe_Lebowskixx]

suppose a guy owns and manages his own deli.

1. why doesn't he open another deli somewhere else?

2. why doesn't he hire someone else to manage his deli? is it because he would rather receive X dollars for managing the deli himself, in which he turns 'his own business' into an hourly wage job.

[Tien]

1) Cuz he doesn't have the business capacity to think larger than 1 deli.

2) Because he is not a business owner, he is a wage slave who thinks his time is best spent at the cash register.


Simply put, they don't have any jack squat knowledge about running a business, so in the end, the business runs them.

[eastbay]

[ QUOTE ]
suppose a guy owns and manages his own deli.

1. why doesn't he open another deli somewhere else?


[/ QUOTE ]

Has hands full with 1 deli? Not enough capital?

[ QUOTE ]

2. why doesn't he hire someone else to manage his deli?

[/ QUOTE ]

Wouldn't be profitable if paying a manager? Still figuring out how to run a deli, wouldn't know how to hire or manage a manager? Control freak? He enjoys it?

eastbay

[spex x]

[ QUOTE ]
suppose a guy owns and manages his own deli.

1. why doesn't he open another deli somewhere else?

2. why doesn't he hire someone else to manage his deli? is it because he would rather receive X dollars for managing the deli himself, in which he turns 'his own business' into an hourly wage job.

[/ QUOTE ]

Your two questions are actually the same question. He probably would love to open another deli but he can't because he is stuck managing his first deli. And he's stuck managing his first deli because he either 1) can't afford to hire a manager, 2) doesnt' know how to create systems for his employees to follow, or 3) doesn't want to.

Now as to your second question: I think that you're misunderstanding the idea of trading time for money. We're always trading time for money. Its only a matter of degree. Some business owners create systems to where they only have to work 2 hours a week and they make hundreds or thousands of dollars per hour. Other owners don't create systems and make substantially less per hour. Either way, owning a business takes time. But calling that person a wage slave or whatever is, IMO, too perjorative.

[mindflayer]

Another possiblity,
(For the deli, the owner may have grown up in the area and knows every customer by name and what they like..in larger companies, the reverse might be true, where every customer knows who the owner is.) remove the owner and you lose a substantial part of the business.

If, when you think of the company and then IMMEDiately think of XXX the founder or owner, then the company is probably in this situation.
Think Warren Buffet and Berkshire Hathaway
Think Steve Jobs and Apple.
For your deli example,
Think of Cheers and Sam Malone (if you are old enough to remember)

[cbloom]

A lot of the time it's because the guy took out a loan to open the Deli and still hasn't paid it off and can't get credit (or doesn't want to risk it) to open a new Deli. If the guy's an immigrant, he may have zero credit and the loan may be from individuals charging huge interest.

Deli-owner guy usually will stop working there every day once the loan is paid off and the business is profitable, but a lot of those businesses are very marginal. Even better is to let your kids run it so you don't have to pay a salary.

Most young American business kids want to either go big or go broke, they'll take a big risk with a lot more capital investment and try to start a franchise business. That's great when it works but it's way higher risk. Most of these deli owner guys just want to have a steady job that supports their family, so they don't want to make a big risky capital outlay, they'd rather try to grind up a steady living.

[BradleyT]

All of the above plus:

He's happy where he is? He thinks "nobody can run it like me"?

Even though he may have created a "job" for himself, it's probably more fulfilling than taking orders from someone else (a boss).

[turnipmonster]

biggest reason for #2 is he doesn't have anyone he can trust to run it for him.

[gusmahler]

At my old neighborhood I regularly went to the only dry cleaners in a 2-mile radius. All of a sudden, a new dry cleaners was going to be opening less than a quarter mile away.

I asked the owner one day if he was worried about the new cleaners.

He laughed, "No. I own that shop also."

It seems to me that he was eating into his own revenue, while basically doubling expenses. What am I missing?

[Jimbo]

The most likely answer without looking at his books are that he realizes after paying a manager and having the employess steal him blind both business's would suffer.

Jimbo