Posted by: SPT | September 2, 2010

The Cost of Life

Business models have always prospered off one basic principle: make money. But traditional models have ceased to show the same profits they once harvested. As a result, in the public eye, a shopper can often find advertising campaigns meant to boost the store’s appeal. In the end, more money is spent to increase sales to increase money.

Well, I have a new idea and it’s radical. My concept begins with the same basic principle: make money. But I want to define how that money is spent.

Campaigns meant to boost one’s street credentials end with the campaign. I say we should use our profits wiser. Instead of spending frivolously on expenses that are effectively misleading, I believe profits should be handled exclusively for betterment. My recommendation: Split end profits (the profit total minus the expense of running the business) into two categories: Employees reward; Community reward.

To boost productivity, efficiency, and overall happiness within any company, several measures are employed in our industries. From employee-of-the-month to Christmas bonuses, or parking spots to gym passes, various tools are used to achieve optimal conditions. I say why not have complete transparancy and show all how to achieve their self-potential, which translates to optimal conditions?

One idea would have a proportional split where the distribution of employee rewards split equally based on a ratio–40%, 30%, 20%, 10% ..where high level execs. receive 40, middle-level gets 30, manual labor 20, and temps 10. This breakdown is simply an estimate of worker worth, but it can be seen and understood how each skill level a worker possesses allows him to reach his potential. A different breakdown could serve as an alternative to these numbers, as long as it accurately valued a worker, but the need for employee self-gratification is a must!

For any employee to work in a company is asking a lot from them. Their LIFE (capitalization used to highlight the importance of that four letter word) is literally being spent in growing the company. Of course with this reasoning, any person can (clearly) see how their increased productivity & efficiency would benefit them directly. But the largest issue with the current system is the spread between upper and middle, and so on. The workers at lower skill levels serve an important purpose for the company; their value should be compensated at an equal spread.

Rather than waste money trying to buy customers over, companies can focus on enhancing their products and internal operations, continuing their success. Over time, I strongly believe that more profit will be made across the boards, whether it’s an investor for the business or an employee working a late shift.

But the key point to my business model, and its most radical decree, will be the most crucial component in increasing any business’s sales. The Community reward profit split would be a fund created to better the community around which the company exists. Without a strong community, most, if not all, companies would drown in their own expenses. With a healthy and strong community, both in terms of physical and metaphysical, a company will not only be a provider of a service, but it can become integrated into the culture & lifestyle with time.

This long-term approach for a business model will guarantee that any price influx or deflux won’t affect sales as much as it does right now, in 2010. To which extent it will provide a cushion, I can only estimate, but I predict that it will be recession-proof. Any client of a business using this model will be aware of their purchase’s value, thus providing a company with not only materialistic value but humanistic value as well.

This subconcious marketing begins when the company allows transparancy to show how it is handling its profits. Of course, a client is aware the company is making profits, but before they are able to feel defensive in having spent their capital, they witness a clear explanation of how the profits are being used: Half of the profits would go back into the hard-working individuals’ hands, allowing them (mind you, they are not just workers, but members of the community which they serve) to strengthen their environment; and the other half of the profits would fund community-strengthening programs. It could range anywhere from youth-education and playground funds to infrastructure support and innovative solutions to the most common
problems (housing, food, health). These community programs wouldn’t be guarantee fixes to our current state, but they would be vital steps towards a better society.

This business model, I believe, is what should already be in place. Everybody profits, in more ways than one. Over time, the company would become a concrete foundation in the community, and the community would reflect it accordingly. Instead of a few individuals enjoying large sums of money, many individuals will be able to enjoy better lives.

This is my radical business model proposal. However, I only say it’s radical because of its bold contrast with current standards.

..

In an afterthought, I’ve realized more cautionary measures would need to be placed in this business model. But the structure and its approach to the Free-Market industry are its revolutionary trademarks.

Further measures would only be created, very strategically, to improve on the inability for any one or group of individuals to contort the business for personal gains. Because the biggest problem with the way businesses are currently run is their efficiency and profit-handling, abandoning generation-old ideas about self-preservation would cause a natural evolution in the free-market. But the few people at the top who are benefitting most from the current scheme would no longer have their “golden umbrella”, which they ever-so love during heavy monsoons like our current recession. The only way to prevent the abuse of a business model such as this would be to control how a company handles its expenses. A possible measure could be a percentage cap on the total amount of capital allowed to be spent on company expenses, thus effectively limiting any group of individuals from taking excess profits.

Often throughout history, especially in the decades which I have been born unto, there exists monopolies and oligopolies that destructively impact our society. These corps. started out as beautiful ideas that would help further many individuals, but somewhere along the route the higher level execs decided they didn’t care about an equal pay spread. Rather, they were more interested in raising profits and keeping the surplus for themselves and their families. Some even sacrifice the quality of their products, despite its negative impact on consumers, to further increase profits.

I don’t need to have my doctorate already to come to this conclusion, because its simplicity is clear when looking at the results of the current model. The modern economy created under the previous structure has created a ridiculous environment for humans to exist within. Promotion is definitely possible in this structure, so the ability of a lower-level worker to reach higher ranks is still plausible, but that privilege has become controlled. One’s freedom, not only physically but spiritually, has been already framed. Even when free, one is limited.

After following the bread crumbs, so to speak, it’s overwhelmingly apparant how large sums of money are falling into the hands of a few, overpaid employees. Although this has been benefitting their personal life, it has come at the cost of others.

I believe it’s time to acknowledge that we, the majority, burden this cost.

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