rabel22 wrote:General Tsao
I thought it interesting that you used Wal-Mart as one of your examples of compeating business. Walmart usually puts stores in smaller cities where there isent any competation. That way what ever wages are paid are determined by Walmart. Walmart dosent have any 40 hr workers so that they dont have full time workers. No insurance at Walmart unless the low paid worker pays for it. Insurance is a sore point with me because I worked for 42 years at a steel mill for evential retirement and insurance. When I retired I got them untill my company went broke and guess what happened to the insurance I was "guaranteed". Try getting insurance at my age. If not for Soc. Sec. I couldent get it no matter what because im not perfectly healthy. If I were healthy I could get it at about $800 a month. Im one of those commies who think we need a national insurance plan for every citizen in the US. I notice that for 13 years you worked for yourself. I hope there isent a Walmart in competition with you because if there is I dont think youll be in business much longer.
Thanks for your comments, rabel. I agree with you that Wal-Mart builds in small towns with no competition--now.
They ran out of cities to build in probably 15 years ago. Small towns were the next obvious marketplace. McDonald's has tried the same thing for the last 15 years. Golden Arch Cafe was a test-market store in a town of a few thousand people. Basically, it was a "meat and two" kind of place, designed to appeal to the small-town folk. It failed quickly. Long story. Ask if you want to hear it.
Anyway, Wal-Mart has historically gone head-to-head with Ben Franklin Stores, Kmart, Target, and similar discount stores. Capitalizing on the small towns was just the next logical step. If a business does not continue to grow, its stock loses value. So a business must grow. Walmart has every major city in the US except Manhattan, as far as I know.
Whenever a Wal-mart tries to enter a small town, all the local merchants freak out, because they fear they will go out of business at the hands of the monster.
Same thing happens when a Home Depot comes to town--the hardware and lumber stores freak out.
But in most cases, these small businesses continue to thrive if they focus on providing what the big box stores cannot.
I am facing the same sort of problems in my business. I run a little one-man carpet cleaning business which serves the Metro Nashville area. I have to compete with Stanley Steemer, Coit, Steamatic, Serv-Pro (whose National HQ is 15 minutes from my house), Chem-Dry, DryCon, ServiceMaster, Fiber Seal, and perhaps some other franchises I've forgotten to mention. Oh, btw, Home Depot has opened a carpet cleaning division, as have several carpet retailers and Shaw Industries (the largest carpet manufacturer in the country).
Many of the franchise firms have more than one operation in town. So I actually have MORE "big box" competitors than one Wal-mart or Home Depot.
How can I possibly compete with these big names, plus over 120 other private carpet cleaning companies (not including the janitorial and maid service companies which also clean carpets)? I cannot compete on price, that's for sure. I do not have the buying power of these giants, so my detergents, components, equipment, etc. cost more than the big guys.
My answer is to compete where they can't or won't. I offer the highest quality in town. I take industry-related classes and seminars, and I have the two highest certifications attainable by a cleaning technician. To date, no one else in my area has both Certified Master Cleaner and Cert. Master Restorer.
I wear a shirt and tie to each and every job, and I take the time to chat with the client, the client's kids, or their dog. The big box guys just want money. I want a relationship.
Oh, I also have a stronger guarantee than anyone else in the area.
So, I'm not worried about the big guys. And I do not particularly like Wal-mart, so I shop there as infrequently as possible.
Regarding insurance--I just have to ask, and I'm not being a smart-aleck, but I have to ask why people think that employers should have to pay for their insurance?
My health insurance costs me $750 a month. Lately, it goes up about 30% every three months (it started out at $75/mo in 1998), so I definately feel your pain on that one!
But where do peoplethink companies get the money to pay for that insurance? It can only come from a few different places, and each of those affects the consumer.
1). Comes out of payroll. If there was not insurance to pay, wages could be higher. So wages are either lowered to compensate, or jobs are cut (or not created) to compensate.
2). Comes out of price increases. If there was not insurance to pay, prices could be cheaper. Price of the product or service is higher to compensate for insurance cost.
3) Comes out of company profit. This is not really likely to happen. Most companies only make 10-20% profit anyway, so there's not a lot of wiggle room in the profit department
if a company is going to keep up its other departments such as payroll, charitable giving, equipment maintenance, safety classes, insurance, etc.
4). Lower the quality. Buy cheaper parts to save money. Of course, this means buying goods from China or India, so you can't win there. In the case of a service business, it means shortcutting on the job. In both cases, it leads to lower consumer satisfaction, and a drop in sales.
So the money has got to come from somewhere. Some employers choose to offer insurance. Others (such as my company) cannot afford to offer it while still being able to stay in business (unless I cut wages, because I will not cut quality).
Rabel, it is regrettable that your former employer tanked and left you hanging. I hope the medical, law, and insurance industries find a solution to ridiculous inflation in their industry. The rest of we citizens are paying dearly for their mismanagement, and frivolous lawsuits of a very few greedy individuals.
It is good you mentioned your plight, though. Perhaps someone will read your words and learn that today's world is not reliable. We must plan for the worst. For example, I am planning now to live without the benefit of Social Security...just in case it's not there in 30 years.
General Tsao