Platt Perspective on Business and Technology

The importance of seeing a business owner take a salary

Posted in reexamining the fundamentals, social networking and business, startups by Timothy Platt on September 26, 2016

I chose the title of this posting with careful intent, after considering titles more like “the importance of a business owner taking a salary,” without the “seeing.” A posting that I would offer starting with that alternative title might be informative, at least within the context of this blog and its overall narrative as I have been developing it here. But it would also be incomplete. For this, it is not just important that a business owner, or a senior executive there for that matter, limit what they personally take from a business where they work, to constrained manageable levels. It is important that they do so as a message coming from the top, that no one there does or can simply use that enterprise for their own personal benefit. I know that some readers will see this as being unrealistically idealistic and even naïve, but when we build a business and when we lead one, we build and lead a community: a community of employees and investors, customers and suppliers and more. We create and lead something bigger than ourselves, and something that holds potential to endure beyond us too – and certainly for any business that develops any scale of impact.

I have touched upon the issues that I address here, in earlier postings and series in this blog. And I would cite those earlier notes by way of example here, with a brief series that I offered concerning what can only be considered senior executive and board of director malfeasance leading up to the still recent Great Recession. See Stockholder Meetings, Annual Board Meetings and Annual Meetings Best Practices, at Guide to Effective Job Search and Career Development – 2, postings 221-224. But the issues that I write of here do not just apply to major corporations, or to leadership that has come to take what can only be seen as a kleptocratic approach to governance and leadership (where the key root word in play there is κλέπτης (kleptēs in Classical Greek – theft.)

One of my first lessons in business leadership, which I first faced and learned as a child, was watching the father and uncle of my best friend of that time, drive the business that they had inherited from their father, into the ground by coming to see it as their personal piggy bank – until it died off and went into receivership for lack of ongoing business development investments that might have kept it competitive. These were not bad people; they lacked the foresight and understanding needed to know what they could safely take from this business as their own salary and compensation. And they never realized that taking a salary and staying within sustainable bounds for that, was essential if their legacy business was to survive for their own children to inherit and perhaps run some day.

I have written about both of these narratives – both of these stories before in this blog and will undoubtedly do so again. But I write here of businesses in general and not just of exceptional and extreme case scenarios, even as I acknowledge them here too. I write here about intentionally setting out to build bigger than oneself in any business that would go beyond the scale of a single-practitioner professional practice: planning and building and nurturing a growing enterprise, and planting seeds from that that can grow and hopefully endure.

I have been writing and posting to a series on general theories of business. And I offer this posting here to pull at least part of what I am attempting there, back from being just a theory of knowledge exercise, and towards envisioning businesses as interpersonal and social constructs and communities. So I include this in my Startups and Early Stage Businesses – 2 directory (and see also Page 1 of that.) And I am also appending this to the end of Section VI of my Reexamining the Fundamentals directory: Some Thoughts Concerning a General Theory of Business, as a supplemental posting to that series.

I was originally planning on ending this posting with that, and with the two non-working, bad practices examples that I have included up to here. But after finishing and editing this posting for upload to the blog server, I decided that I should at least briefly acknowledge why the issues that I write of here, have been weighing heavily in my thoughts recently. For a complex set of reasons, some of which I have at least briefly touched upon in recent postings to my Social Networking and Business 2 directory page (e.g. its postings 244-246), a narcissist named Donald Trump has taken control over the Republican Party, touting himself as a billionaire business genius. Trump epitomizes the extreme opposite of what I propose here; he has literally driven six businesses into bankruptcy, putting all of their employees out of work, refusing to pay vendors and contract workers who he owed through those businesses, and leading any and all other investors to a position where they lost essentially all of their equity there. Meanwhile, he walked away and every time, personally making what he has publicly referred to as “tremendous money” out of this, and every single time. Now he is quite literally burning the Republican Party that he claims to lead and represent, to the ground around him. And now he has loudly and very publicly proclaimed that he will make money out of his current run for the US presidency too! I do not know all of the details as to how, of course, but it is already apparent that Trump is sending as much of and as many of his campaign expensables to his own businesses as possible – and it is certain that he is not offering any discounts for services rendered. He will extract as much money from the Republican Party as possible in due payment for all of this, knowing that they will have to pay. The alternative would be a self-imposed death sentence: suicide for the party as a viable national political force and regardless of whether they sought to avoid this debt by simply reneging on it and renouncing him, or by filing for some form of bankruptcy protection. Trump will win here and regardless of how badly he loses the election itself, and once again he will walk away with “tremendous money” from this – his “seventh business burn-down” success, and counting.

I write of good businesses and good management and leadership here, in contrast to that. With this appended note added, I am also going to include this posting in Social Networking and Business 2, now.

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