A Fair Business?

[Adasta]

I've often thought about what would constitute a fair business. I sometimes think about what I would like to institute in my company should I ever create one. Anyway, here are some ideas - what would you add or take away?

• It would be a mutual or a cooperative, depending on the business
• There would be a maximum income, so that the highest earner in the company is limited to making only 15x that of the lowest earner.
  (e.g. a minimum wage worker would earn 11,000 pounds a year while the CEO, for example, would be capped at 165,000)
• Salaries would be increased in line with inflation
• Salaries of all employees would be published on the company website, should they agree to waive Data Protection rights in this regard. In so doing, I think it might help to foster a culture of honesty. Posting salaries like that, should enough people do so, would eliminate gender pay inequality.
• Declaring the cost price of each saleable item alongside the price charged for it
• Having a clear complaints policy which is posted on the website. Stages of complaints should outlined with a view to resolving complaints within 24 hours of their receipt.

 

[vernon]

There's enough own goals there to guarantee bankruptcy fairly quickly.

 

[Adasta]

There's enough own goals there to guarantee bankruptcy fairly quickly.

Not sure about that. I've essentially consolidated practices from several other businesses which are doing quite well.

No reason for it to fail assuming that you at least have some sort of established trade.

 

[Smokin Joe]

I've often thought about what would constitute a fair business. I sometimes think about what I would like to institute in my company should I ever create one. Anyway, here are some ideas - what would you add or take away?

• It would be a mutual or a cooperative, depending on the business
• There would be a maximum income, so that the highest earner in the company is limited to making only 15x that of the lowest earner.
  (e.g. a minimum wage worker would earn 11,000 pounds a year while the CEO, for example, would be capped at 165,000)
• Salaries would be increased in line with inflation
• Salaries of all employees would be published on the company website, should they agree to waive Data Protection rights in this regard. In so doing, I think it might help to foster a culture of honesty. Posting salaries like that, should enough people do so, would eliminate gender pay inequality.
• Declaring the cost price of each saleable item alongside the price charged for it
• Having a clear complaints policy which is posted on the website. Stages of complaints should outlined with a view to resolving complaints within 24 hours of their receipt.

Thereby ensuring that your personel in top positions are sub standard because their pay too uncompetitive to attract anyone with talent.

Declaring the cost price of each saleable item alongside the price charged for it

Ensuring every customer demands a discount because they don't understand the need for a business to make more than just a minimum profit to survive.

When it comes to idealism v. reality there is only one winner. (Been there and done it).

 

[Adasta]

Thereby ensuring that your personel in top positions are sub standard because their pay too uncompetitive to attract anyone with talent.

That might not necessarily be the case. CEOs of charities, for example, get paid a lot less than their private sector counterparts.

Declaring the cost price of each saleable item alongside the price charged for it

Ensuring every customer demands a discount because they don't understand the need for a business to make more than just a minimum profit to survive.

This could be trickier. But surely they must be able to comprehend the concept of a profit margin to ensure the business continues?

 

[Night Train]

I've always wondered about a salary scheme where the company's profits are divided first to pay a fair wage to the lowest, then what was left was divided to the managers, then, if there was anything left, remainder paid went to the directors salary. Any further remainder goes back in the pot to invest in the company or the staff or both.
The directors wouldn't need more then 5 times the income of the lowest, if they did then raise the lowest wages and allow the company the opportunity to earn the income.

It should also be a cooperative. I think people are happier to work harder when they have a stake in the welfare of the company.

 

[Smokin Joe]

That might not necessarily be the case. CEOs of charities, for example, get paid a lot less than their private sector counterparts.



This could be trickier. But surely they must be able to comprehend the concept of a profit margin to ensure the business continues?

A charity does not have to make a profit in a competitive market like a private company does. If the going rate for widget designers is 50 times more than that of the janitor that is what you need to pay. As for customers, no they don't understand profit margins. Look for threads on here where people feel they are being ripped off because their LBS charged them a tenner to replace a spoke.

 

[Night Train]

I could retract my previous post and suggest that my ideal fair company would not involve any money at all. Sadly that would require that no one used money and everyone just did their best at what they are good at freely for anyone who wanted it.

I'd quite happily make beautiful furniture, build cars, bikes and trailers, build and repair houses and teach others to do likewise, just for the roof over my head, food in my tum and time to have a happy life and the things and people around to make it so.

 

[Smokin Joe]

I could retract my previous post and suggest that my ideal fair company would not involve any money at all. Sadly that would require that no one used money and everyone just did their best at what they are good at freely for anyone who wanted it.

I'd quite happily make beautiful furniture, build cars, bikes and trailers, build and repair houses and teach others to do likewise, just for the roof over my head, food in my tum and time to have a happy life and the things and people around to make it so.

Fine till you need money to invest in capital equipment, pay the light bill and the rent and service bank loans. Your idea only works with a few hippies living in communes somewhere in mid-Wales.

 

[Night Train]

Fine till you need money to invest in capital equipment, pay the light bill and the rent and service bank loans. Your idea only works with a few hippies living in communes somewhere in mid-Wales.

Yes, that's why I said it would only work if no one used any money, as in globally.

For the time being I think much of this discussion is going to be utopian anyway.

 

[Globalti]

Pie in the sky I'm afraid. My employer sells shares to its employees so we are all shareholders and part-owners, which is more than enough to motivate workers, believe me. We get a dividend twice a year, which is worth well over double what our money would be earning in a building society. My shares, which cost £0.22 each are now valued at £0.90 each, which is plenty of motivation for me to make the company work.

I'm sure that if customers knew how much profit manufacturers make they would desert in droves.

 

[threebikesmcginty]

This could be trickier. But surely they must be able to comprehend the concept of a profit margin to ensure the business continues?

Not sure they do. I work in manufacturing, people don't seem to get the fact that you can't give >5% discounts simply because the net profit just isn't there.

 

[colly]

I company like that would be great to work for, or trade with but all those laudable aims and aspirations have to be paid for, and the only one who is going to do that is .................the customer.

If you make or buy in a product for say £100 and state as much to your customers I doubt that you then telling them you are going to sell it to them for £200 would go down all that well.
Most simply wouldn't understand that out of that markup comes all the company's expenses. Premises, wages, insurances, heating, rates, advertising, accountancy, interest payments etc etc etc and even finally profit.

All they would see is ''some greedy bugger trying to rip me off.''

Seperating all your costs from the equation and indicating your net profit would be possible but for indiviual items, products or services that might not be quite so easy.

The best you could do would be to give the overall profit of the company in percentage terms.

As for resolving all compaints within 24 hours. That simply wouldn't be possible for a company that was involved in complex business. It isn't unknown for customers to be wrong, even if they will never admit it, or simply malicious.....trying to get something for nothing.

Having said all of that it doesn't mean that aspiratons such as those aren't worth working toward.

 

[2Loose]

The 'need to pay x large amount to attract talent' argument doesn't really hold water.


Most companies grow and train their own talent until they are of a certain size and only then does it become a potential issue.

Huge salaries do not mean competence or motivation, merely experience and even that is often not related to the area that they find themselves in. Many people would rather get paid a good sum and work for a smaller more passionate company (and perhaps take a share) than a huge sum, run by committee organisation.

 

[coffeejo]

If it's a business you're setting up, then it all depends on whether or not you're out to get rich or earn enough to pay the bills whilst doing something you love.