We've been investigating health coverage for our employees. This will make probably the third time we've looked into this. The GM and I would like coverage for ourselves. Actually, right now, I have coverage, she does not and the new crew member is being covered under Medi-Cal. We'd like family coverage and we'd like to offer that to our crew as well. The current staff is a bit older than previous crews and we might have more people interested in enrolling. We'll see.
One thing the GM brought up in doing the investigation is reverberating with me though, and I think should for any small business owner not consumed by greed. Let's assume you have a successful sole proprietorship. Let's assume that by successful we mean profitable. Let's also assume that by profitable we mean after your bills are paid you are able to live reasonably. I'm not talking wildly successful as in homes in London, Paris and Aspen, pied a terre in Manhattan and a yacht successful. I'm talking a realistic amount of success for a mom & pop.
If you are a sole proprietor you have to pay self employment tax, as well as tax on your profits. So from a tax-paying perspective it is in your best interests to show little or no profit. From a home buying or other financing perspective this isn't such a hot idea. Let's say you're not trying to secure financing for anything.
If your goal is to reduce your paper profit and you don't have so much profit that you're consulting tax specialists about which off-shore corporation to park your bucks in one option you have is to increase expenses. In this instance the expense increased would be health insurance. If you're not going to be able to keep the cash, because of taxation, then why would you not spend it on providing health insurance, having a lavish holiday party for the staff, taking a company outing to a faraway place, or anything else you can think of that spends money and makes for a superior work environment. Paid vacations anyone?
The answer of course, is cash flow and budgeting. At this time of year with the holiday season looming we would like to offer nice bonuses to the staff. One problem, aside from making it equitable for both long and short-term staff, is that we have no cash at this time of year. If we were better able to budget we might, but being small-time operators we are more concerned with trying to not draw on lines of credit through the winter. When we do have to use them, we concentrate on paying them fully in the summer. Every year save one we have wound up profitable, at least on paper.
So I am looking at expenses through somewhat different eyes. I'd rather spend my money on myself and my crew than on government.
On another note: Our farmer friend is faring well. His spirits are high, his dressings have been changed for the first time and there is no sign of infection, the pulse is still in his index finger and he is still able to move the digits. He should have been released from the hospital today. He still has a long row to hoe as they say, but it seems likely he'll make a full recovery.
And our setting a record? A false alarm. One waiter combined a check and didn't follow proper procedure and so instead of 202 covers, we did a mere 194. There's always Thanksgiving weekend.