Will the real risk-takers please stand up?!
[Marshall Mathers -AKA M&M – has an anthem I enjoy with a chorus line singing:
“Will the real Slim-Shady please stand up …” – which is my inspiration for today’s comments]
It’s time for the real risk-takers to stand up.
Who are the real risk takers in our economy? It is not the banks. It is not the money managers. It is not the traders on Wall Street. It is not the venture capitalists. It is not the merger and acquisition specialists. It is not the bond underwriters. It is not the IPO underwriters. It is not the private-equity companies. It’s not the politicians. These folks primarily risk only “money” and frankly most of them are not even risking their own money. Too often they are risking your pension funds or 401k accounts that are stuck in buy-and-hold purgatory.
I mention these specific industries because our current fiscal and monetary policies tend to target and directly benefit their business class. We need to direct more policy solutions to help the real risk-takers.
Many think the real-risk takers are the folks moving and managing money from a great distance. Yes, they do take some risk but are they the real risk-takers that truly drive the daily economy in your business or in your neighborhoods ?
No, the real risk takers are the same people they have always been – the person with the real skin in the game who had the original idea and put themselves at specific personal financial risk to live the American dream. The person with the original drive and determination to make it work. The person investing their own sweat equity. The person that opens the front door on the first day of business and the person that locks that door at night. The person that leaves the job that paid them every two weeks to start a job that may never pay them a dime. The person that deals with hiring the first employee and firing the last one. The people that are smart enough to know they need help to be successful and hire competent loyal employees. These are real risk-takers.
The person that takes a personal interest in his/her employees and cares about their health, safety and dreams of upward mobility. The person that respects, cherishes and honors all of those public servants working tirelessly to educate their children and keep their city, county, state and country safe. The person that gets dragged into the labor hearing or stands on the witness stand defending his or her company. Yes, these are the risk-takers we depend on every day.
Regular folks … regular business people caring for themselves, their families, their communities and their staffs who are not part of some faceless conglomerate with multiple names and liability structures -each designed to eliminate direct responsibility and risk from each other. Folks that when and if they fail, lose absolutely everything; yet when they really need help, normally have just family and friends to turn to. These are the real risk takers. These are the real job creators.
These are the people that deserve credit for helping to sustain our American economy … not the lenders, venture capitalists, private-equity firms or wall street investors because in so many instances, they spend their economic lives actually mitigating, minimizing and seriously avoiding the kind of risk that can lead to losing everything -life, health and potentially liberty. In many cases, losing can be an advantageous write-off. The regular person that takes the type of personal risks associated with being a small to medium sized entrepreneur risks so much more than a write-off…
How can we bend the opportunity curve to provide more favor to the small-to-medium sized entrepreneur? We have to look at current policy and remove the obstacles inhibiting the growth and opportunity for the heart and soul of American business – the little-guy. C’mon, give the regular folks a break and reward their risk.
Let’s see if I can put this another way so I don’t offend all of my friends in the financial service markets. Yes, any successful financial services company does create their own jobs and they do hire their own employees. They deserve total credit and should be celebrated along with the other job creators. They also deserve credit for being there to provide a product and a service for a fee and at a profit. As a unapologetic capitalist myself, I tip my hat to everyone in the financial sector. Great job!
However, (speaking for myself), for any banker or venture capitalist to lay claim to creating jobs in my own business just because they loaned me money is crazy talk. They never took a risk above and beyond loaning money for which I would be paying them back with interest. They always required more collateral from me than the amount of money I would be borrowing. They always protected, mitigated, and minimized nearly all risk before they ever agreed to provide a dime. They also only agreed to play their role as long as they received a significant return on their investment – whether I was moderately, marginally, or wildly successful or not. The bank/investor had a pretty good situation while I retained the absolute risk.
If I hear another lender or investor claiming credit for the job creation of others I am going to scream! Let’s say it all together, it is the person or persons with the idea, fortitude, commitment and creative juices necessary to decide to own and operate the business that gets the credit for creating jobs. They assume the risk. They run the business, they hire the dedicated staff, their staff pours their sweat equity into the company, they take the real risks and they should be the primary beneficiaries of the success of the business. They are also as the ones experiencing the greatest pain when the business has negative outcomes.
They are the ones that appreciate and honor their customers because they know that without customers and consumer demand, they themselves would be out of a job.
Without needing to disparage anyone, I need to speak for the small business person. As one of them, I feel comfortable making the following statements:
1. We are often on our own to create a life for our business.
2. We can thank all of the other creative people that are taking risks and creating market demand for our goods, products and services.
3. Yet we know above all that we will still have to scratch and scrape to survive.
4. If we fail, we could personally lose everything and no one else shares that level of risk with us.
5. The reality of business is a series of peaks and valleys.
6. Access to credit smoothes the valleys so the business’s financial model is sustainable.
7. We are willing to work ourselves to death in order to make our businesses work.
These are sobering realities.
Yet good business people understand the other side of the story which is: It truly takes a village to be successful. Although we are ultimately on the hook for our failure, many have helped us on our journey to success. We need to cherish all of those that we rely on to be successful, understanding that in the world of chicken and the job creator, we the risk-taking-job-creating-dreamer definitely had to come first -access to credit surely followed closely behind.
I want to be very clear all business people have many to thank. We can first thank our God life itself and for giving our parents life so they could give us life. We can thank our family for nurturing us while teaching us to love, honor, dream and share. We can thank our family for providing us with values that would guide us for our lifetime. We can thank all those strangers, (our military, public safety, health officials), whom we never met, who without us even asking for their assistance, helped keep us safe so we could sleep at night and therefore allowed us to use our days to learn and grow. We can thank the countless teachers that invested their time in us so we could learn how to become successful.
We can thank our constitution that enshrined a baseline and a system of government that is committed to protecting our unalienable rights. We can thank those that built the roads, dams, bridges, transportation infrastructure that we rely on for the very existence of our business. We can thank the first person who had enough confidence in our ability to give us our first job. We can thank our first customer who took a chance that we could fulfill our promise and satisfy their demand. We can thank so many people including our vendors that allow us to conduct our business in the most effective manner possible.
For those of us that have employees, we can thank them constantly for without their professionalism and commitment to excellence, no business could reach its true potential.
We can honor the sacrifices of some many that have helped us by continuing to risk everything and create, sustain, and grow our businesses so we can continue to bring the American Dream to the next generation.
The United States of America ; a great country to be a risk-taker! It’ time for the real risk-takers to stand up and be heard.