Let’s say you do. Congrats, you earned your first $180. Now you can’t more those same 6 lawns tomorrow. Grass doesn’t grow that fast. You need to mow 6 different lawns tomorrow. And six different ones the day after that. And the next, and the next. The earliest you’d be able to go back to those first six lawns are what, two weeks? In the meantime you need to expand your territory every day, which means a reliable vehicle capable on transporting your equipment. Which you don’t have yet. And all these new lawns that you have to acquire every day, who has time to pound the pavement and get those contracts? not you, because you are busy mowing. I haven’t even brought up the fact that you aren’t the only lawn care guy in town, and that most people don’t actually pay to have their lawns cut, so your customer base is already limited. And I’m sure there’s lots of other factors that I haven’t even thought of, but I think it’s clear this isn’t going to scale the way you think it does.
Let’s say eight, since we’re in this to make money, after all. So to keep you earning at full strength for a five-day week, you need forty customers.
Unless all of them want regular weekly mowing at the same rate, you need other customers to fill your time in between mowing to them. Let’s say, at a quite conservative estimate, that you need a customer base of 100 to keep you reliably mowing an average of 40 lawns per week.
Building up a regular customer base of 100 within just “a month or so” sounds pretty fast to me, but let’s assume it’s true. You probably have to get a pretty wide geographical range to provide it (especially for poor people who live in cities where, you know, lawns aren’t all that common.) All that travel takes time and money too, of course. And that’s assuming zero dry spells or other conditions that make people cut back on lawn-mowing, which it would be rather unwise to count on.
Sure, for the two or three months left in the summer after you’ve managed to build up your business to full-time work. Now it’s October and nobody wants their lawns mowed any more. That $10K or so that you grossed, under the rosiest assumptions of full employment, no dry spells, etc. (which of course doesn’t factor in the cost of equipment, transportation, maintenance, fuel, etc.) isn’t going to stretch very far over the fall and winter.
In short, Starving Artist, your optimism about the ease and profitability of this lawn-care business turns out to be based on blindly ignoring a lot of crucial facts. What you petulantly call “defeatism” is merely acknowledging reality.
This cannot be emphasised enough. As studies show most Entrepreneurs come from family with money.
The Gates, Buffets, Zuckerberg’s were already millionaires before Bill, Warren and Mark came along. Being from a wealthy family allows you to take risks and use contacts from funds and business, you know that if you fail, you won’t starve.
Even someone like Steve Jobs who came from a working class family that had adopted him (although ironically his biological parents were loaded) was lucky to have parents who were willing to let him live off them while Apple stared up.
Elon Musk was middle class, but got the start up money from his Dad.
So in short you need wealth or patronage.
In my real life, my law practice is heavily geard to providing services ton budding start-ups and I would say that of the people I have met, perhaps 95% of them were wealthy or had a rich patron.
I’m the kind of person who can and will pay someone to mow my lawn, clean my pool,and clean my house. I won’t hire someone who knocks on my door or leaves a flyer on my doorstep to do these things. I hired established local companies who have good reputations and appropriate licenses and insurance. I’m currently looking for a painter and a fence repair company, and the first thing I look for in their advertisements is that state contractor number - no contractor’s license, and I won’t even consider asking for an estimate. And contractor’s licenses aren’t free.
Also keep in mind that, if you do make it out of poverty by founding a business, you didn’t build that. That is, you didn’t pay enough in taxes to support the infrastructure that made you a success.
So liberals are at least consistent - if you are poor, it’s not your fault, and if you become not-poor, it’s not to your credit. The government does it all.
Regards,
Shodan
Money can be used more than once. That’s the beauty of it. Say I have $10 and there is no evil taxman to make this simple.
I give Larry $10 for a haircut.
Larry gives that same $10 to a kid to mow his lawn.
That kid buys a picture I drew for $10.
That one $10 bill facilitated the production of a haircut, a mowed lawn, and a picture. So money, while not being wealth, is a lubricant to the wealth producing machine. By removing barriers to trade you can grow the economy (increase net wealth.)
This is why I am so anti-minimum wage. It protects and enriches a special interest at the expense of society as a whole. The concept is protected with borderline evil, emotional appeals by labeling opponents as hateful.
Now let’s add the evil taxman back into the picture.
I give Larry $10 for a haircut and Larry gives The Man $2
Larry gives $8 to a kid to mow his lawn the kid gives The Man $1.60
etc…
The Man uses this money to build a road which reduces barriers to trade and increase productivity for all! Yea! Good Government. The Man uses this money to hire a policeman to protect property rights which reduces risk which reduces costs for everybody. Yea! Good Government.
The Man gives this money to some crackhead who does nothing productive with his life. Boo! Bad Big Government.
So, supporting sound economic policy is what any rational person on the left or the right should do. Assuming the goal is pro-growth and enriching the people. If the goal is mere power you support emotionally pleasing yet real world shitty economic policy. Note the support Bernie Sanders gets from the basement dwellers who don’t understand applied finance or economics.
So, TLDR, the economy is not zero sum. Money velocity encourages production by providing the means to buy what is produced. Yes, people can make money selling services and goods as a sole proprietor. I did it for awhile. Wasn’t that hard. The hardest part was probably regulatory and tax compliance.
If you want to make wealth generation easier instead of protecting existing entities/power structures agitate to remove unnecessary or counterproductive barriers to trade. If you want to safeguard against poverty institute some form of national revenue sharing sufficient to mitigate the worst problems of poverty.
And this may be slightly off topic but with regards to poverty I’m thinking that education reform and mental health reform could help with that.
Money is not wealth. Repeat that to yourself.
A $100 bill is not wealth. It’s money. Wealth is valuable stuff. Now value is subjective and thus wealth is impossible to quantify except by a complete list of what is owned or available.
So wealth is subjective and variable but let’s look at an example. Assume we are on an island that has some resources. Wood, water, stone, maybe some metals, fish and mollusks in the water, maybe some birds.
A handful of wood that someone scavenged represents the beginning of wealth. Even without money. Fashioning that wood into a spear to hunt fish or other animals is labor + the raw material to generate a tool that has value. Why? That tool expedites the gathering of food which people require to live so since time is valuable and food is valuable the possessor of that spear has more wealth than someone who does not. Still no money involved. Labor and raw materials are generating wealth.
Spears become common and free time becomes a bit more common as fishing and work to fulfill necessities become more efficient. Now a fancy, ornate spear on the wall is a status symbol and has more subjective value in the eyes of the islanders. Still no money involved.
You don’t NEED large supplies of money to generate wealth. You need labor (human, animal, or otherwise) and raw materials. Hell, labor should just be called utilizable energy at this point but that’s an aside. Money facilitates wealth generation. Why? It makes trade in the present vastly easier than barter and it makes trading over time vastly easier. Money is not wealth.
This is what many on the left fail to realize. They think giving money solves poverty. No. Poverty isn’t the lack of money. Poverty is the lack of things money can provide. But you have to generate the things money can buy to alleviate poverty. If you want to generate the things people need to be out of their basements or out of their huts and producing. Sitting on one’s booty and collecting a check is not conducive to producing wealth.
Why do you think people keep whining for more minimum wage? It’s simple the value of the currency is decreasing relative to the goods and services available. If you want to increase wealth produce more! If you want to produce more you have to employ more energy into the transformation of low value to high value goods. It’s that simple.
Shodan, I’m going to mod note this. It’s essentially an attempt at derailing a productive thread through a meaningless partisan shot. Don’t do it again.
I have no doubt that some poor can pull themselves up by the bootstraps and start their own small business, but it’s not easy for anybody. You hear all the time how small business creates most of the jobs, but small businesses also routinely crash and take those jobs with them. It’s not easy for the best of us to make a business run, it’s much harder for the poorly educated, those with few skills, and those that live in the inner city. Possible for some, but not likely enough to negate the need for the social safety net.
https://www.youtube.com/watch?v=-UbmG8gtBPM is a good video. It’s what got convinced me about a basic income. We clearly have the potential, worldwide, for vastly more production. What we are lacking is, in part, money velocity that would enable this production to occur.
:rolleyes: Yes, I know.
[QUOTE=octopus]
[…] an island […] Wood, water, stone […] fish and mollusks in the water […] A handful of wood that someone scavenged represents the beginning of wealth […] Labor and raw materials are generating wealth […] Now a fancy, ornate spear on the wall is a status symbol […] Still no money involved […]
You don’t NEED large supplies of money to generate wealth. You need labor (human, animal, or otherwise) and raw materials. […] Money is not wealth.
[/quote]
How does any of this tedious and pompous dorksplaining in any way invalidate or correct anything that I actually said? What I said is that wealth in an economy doesn’t expand at infinite speed, even though economies are not zero-sum.
That remains true whatever proxy you use to estimate wealth in an economy, whether it’s money, labor and raw materials, or any combination thereof. Whatever you’ve got that’s growing the economy, you can’t turn it into increased value all at once, and you especially can’t distribute the effects of that increased value among all the participants in the economy all at once.
I apologize if my feeble little joke about “scraping wealth out of the couch cushions and cupholders”, to symbolize the impossibility of an economy’s immediately absorbing and supporting a sudden huge increase in economic activity, confused you about what I actually meant.
[QUOTE=octopus]
This is what many on the left fail to realize.
[/quote]
You don’t appear to be very good at judging what other people do or don’t fail to realize.
Not for the superficial reasons that you patronizingly and incorrectly imagine.
You don’t need a lot of paperwork to mow lawns. It may not be a pathway to prosperity but its a living.
The same can be said of selling firewood, being a small jobs handyman, selling food from carts (see hot dog carts), driving a taxi, etc.
Immigrants don’t start businesses because its relatively easy for them, they start businesses because no one will hire them. The communication barrier is a large hurdle so they can’t get jobs and as greencard holders (if that), they do not qualify for most forms of government assistance).
What they do have is average or above average intelligence or skills and a lot of desperation. Do you honestly think that the infrastructure that makes it possible for your neighbor’s aunt’s brother-in-law’s, cousin’s daughter being a lawyer predates the immigrant community’s small business activity? The immigrant communities in NYC didn’t come preassembled with lawyers and accountants. Their businesses flourished first then the lawyers showed up. Before then we used the yellow pages to find our lawyers.
What the immigrant community has that the poor community doesn’t have is above average intelligence and a sizable dose of desperation.
You know people can move anywhere in the 48 contiguous states pretty easily.
I think “gumption” is harder come by at any income level than people think. Reasonably good health is important but you don’t have to be particularly clever to run a small business.
And if you don’t intend to make any such claims, then that’s fine. In that case, we have no debate here, at least not with you.
Aaaaaand whaddya know, the debate is back in business. No, Starving Artist, you don’t get to acknowledge that entrepreneurship for many reasons is intrinsically incapable of providing a universal or general solution to the problem of poverty, and then turn around and insinuate that the only people it fails for are those who don’t “truly want to work”.
You’re quarreling with my notion because you’ve mixed up the concepts of relative qualification levels with absolute qualification levels.
I said nothing about any absolute level of intelligence, health, capability or motivation being required in order to succeed at entrepreneurship. What I said was that success in such efforts among poor people will accrue to the subset of the poor population who are the most healthy, capable, motivated and intelligent of that group. That’s not going to be most of them.
As others have noted, school kids aren’t singlehandedly raising themselves from poverty to middle-class security by this work, which is what you’re claiming is easily possible for anybody who will just make the effort.
All this inspirational idealistic statistics-free drivel reminds me of the stories my 90-year-old mother tells about being repeatedly told in her Home Ec class and other girlhood environments that “it’s just as easy to love a rich man as a poor man”. Any girl could successfully “make an eligible match” if she just took the trouble to “make the most of herself” and focus on “boys with good prospects”.
Girls who didn’t marry or who married “down” were disparaged as “throwing themselves away” or “left on the shelf” because they “missed their chances”, and/or weren’t attractive enough or charming enough or well-dressed enough, or or or or.* It was always somehow a girl’s own fault if she didn’t “marry well”, and nobody ever bothered to point out that there simply weren’t anywhere near enough well-off boys available (absent polygamy) to provide an affluent husband for all the local girls who were told they ought to get one.
“It’s just as easy to love a rich man as a poor man” was never actually a viable strategy for girls in general to “better themselves” by marriage: it simply provided an excuse for treating the statistically inevitable majority of girls who didn’t “marry up” as though it was all their own fault, for not being good enough or not trying hard enough, or something.
Similarly, Starving Artist’s cheery mantra of “anybody who truly wants to work can achieve self-employment with a comparatively high income” isn’t really intended as a general solution to the problem of poverty. It can’t be a general solution to the problem of poverty, because the economy at any given time simply couldn’t support a short-term transition of most of the poor population from poverty to middle-class prosperity.
What it is is simply an excuse to blame the fate of the statistically inevitable majority* of poor people who don’t become successful entrepreneurs on their own alleged “laziness” and “defeatism” and “lack of confidence” and “irresponsibility”. We don’t have to worry about the intrinsic structural failures of individual entrepreneurship as a means to large-scale economic mobility, because we can just blame the failures on the poor people instead! Engagement with reality successfully dodged! 
- Mom jumped ship, in case you were wondering; stayed unmarried into her thirties and then hitched up with an engineering student WWII vet from a working-class Bronx Jewish family. It may not have been “eligible” but it worked for us!
If 10% of the poor became entrepreneurs, they could hire much of the other 90%. But in the end owning your own business is about a lot of sacrifice and hard work with a good likelihood that you will barely eke out a living. Things I would not be willing to go through unless my back was against a wall.
This is not true for poor immigrants. Why is this true for the native poor? Whatever the percentage of poor that could be successful at running their own business, the percentage trying to do so is much smaller.
To earn better than minimum wage? LOTS!
Risks? LOTS!
So its not really for everyeone
There is a rock bottom and if you are already on government assistance your risk profile is not the same as some guy that is giving up a good paying job.
An accountant is not likely to charge more than $300-$500 around here for a really small business.
You really think that all those Korean merchants started off with lots of capital?
You need capital if you want to buy a subway franchise but you don’t need nearly as much to run a sandwich cart in some law office.
Sure, but the point here is that it’s claimed that such occupations are realistic “pathways to prosperity” for some unspecified (but apparently assumed to be large) proportion of the poor population.
Most of the US poor do have some kind of a living, as opposed to literally perishing from want and privation. The issue being debated here (right up there in the thread title, in case you missed it) is not “entrepreneurship as a way to achieve basic survival in poverty”, but “entrepreneurship as a way out of poverty”.
[QUOTE=Damuri Ajashi]
Immigrants don’t start businesses because its relatively easy for them, they start businesses because no one will hire them.
[/quote]
Sure, and the ones who succeed network with later arrivals from the same immigrant community in order to grow additional businesses (often in the same fields).
[QUOTE=Damuri Ajashi]
Do you honestly think that the infrastructure that makes it possible for your neighbor’s aunt’s brother-in-law’s, cousin’s daughter being a lawyer predates the immigrant community’s small business activity?
[/quote]
I don’t say it originally predates it, but for established and growing immigrant communities, the two go together. Sure, the first immigrants are making it on their own against very stiff odds, but the later immigrants and descendants, who constitute the vast majority of any established immigrant communities, have benefited substantially from existing networks (which is a good thing).
I mean, it’s not just a coincidence that we’ve got huge percentages of nail salons that are Vietnamese-owned, donut shops that are Cambodian-owned, greengrocers that are Korean-owned (though that network is on the decline as more Koreans assimilate into the general middle class), motels that are (often Gujarati) Indian-owned, and so forth. The pioneers use their acquired expertise to increase their industry share with the aid of the newcomers.
[QUOTE=Damuri Ajashi]
You know people can move anywhere in the 48 contiguous states pretty easily.
[/quote]
Oh yes, and it doesn’t cost anything at all. There’s no such thing as not being able to afford to move elsewhere.
This may well be true. But you know, we’d really need to see some actual numbers on both those percentages before we could have a reasonable chance of estimating how feasible it is to consider “entrepreneurship as a way out of poverty” in general.
So perhaps there are other things that need fixing other than more bootstrapping. Maybe we need to focus on more education so that our kids leave school with enough human capital to make their sweat equity more valuable.
At home? So I assume you support federally subsidized internet access at home for poor families?
Schoolboys have to pay for pokemon cards and video games. If you are trying to pay rent mowing lawns, you need professional mowing equipment, a flatbed truck, etc. Over $15 for a modest set up.
There is not really a future in trying to undercut the other guy and charge $30 to mow someone’s lawn.
I don’t think you can do a good job on 8 lawns a day. Between travel time and trimming and edging and the administrative aspects of your business, I doubt you can do more than 4-6 reasonably large suburban lawns a day and frankly I doubt you can do THAT on a consistent basis.
Shit, $200/month for a tiny lawn mowing outfit? I want to be that accountant. I might say maybe that much per quarter but I’m more inclined to say $500/year.
If you have a large truck and a strong back, you can make a living. Its hard work and the juice might not be worth the squeeze but you won’t starve.
Heh, good point.