The Agitator #64
by Oliver_Halle
 The Agitator
March 14, 2013 10:53 AM | 1295 views | 4 4 comments | 14 14 recommendations | email to a friend | print | permalink
Two separate stories about restaurants were in the local media today (Wednesday, March 13, 2013), one in the Atlanta newspaper, the other the MDJ.  The first was about Manuel’s Tavern, the landmark political gathering spot in Atlanta, and the other Tommy’s Sandwich Shop on the Marietta Square.  Both were more or less human interest stories about the different costs associated with doing business and trying to make it in a tough economy.  I think it is fair to suggest that there were some political overtones between the lines deserving some observation and comment.  

Brian Maloof has 52 employees at Manuel’s, among them ex-convicts that he thinks are worth a second chance.  Rising food costs, which Maloof attributes to varied factors, are eating into his business.  Also affecting his costs will be the federal mandate to provide health insurance to his workers.   For years Maloof provided health insurance, but with rate hikes of thirty percent some years and competitor restaurants not covering their employees, he had to drop it.  Of note is that these premium spikes occurred long before ObamaCare, and from memory it seems like the trend began in the early 1990s.  But with the mandatory ObamaCare getting ready to kick in, Maloof stated that it will level the playing field.  Instead of figuring out a way to cut the number of his employees in order to fall outside the mandatory provision in the healthcare law, Maloof is going forward.  Between his increased food costs and ObamaCare, Maloof had no choice but to raise prices.  And in return his loyal customers have said they will stay with him, that they won’t patronize those establishments that are cheaper.  If ever this man gets it, it is Brian Maloof.  He truly understands the concept of loyalty up and loyalty down, that it matters that you take care of your workers, and that your workers will reward you in turn by giving their all and more to ensure that Manuel’s continues to be a successful business.  And Maloof can be contrasted with all too many business leaders who know the price of everything and the value of nothing, in this case the value of the employees.  

Closer to home Tommy’s Sandwich Shop is closing its doors after 36 years.  The landlord wants a $550/monthly rent increase on a current rent of $1,200.  Considering the relatively small profit margin on this type business I suspect that Mr. Smith had no choice but to shut down.  He built a restaurant with a lot of loyal customers by providing a good product at a good price.  And people rewarded him by coming back, by becoming the regulars that can make the difference between success and failure.  But times change and competition began to erode some of that loyalty, although from the report it appears that he could still eke out a living.  But the landlord wouldn’t budge on the rent hike despite acknowledging that Mr. Smith has been a good tenant.  In other words, the landlord is willing to change horses in the hope that a new horse will be a better deal than the old reliable grey mare.  Loyalty in these tough times and free markets seems not to matter so much to some. 

No one ever said that capitalism and free markets would produce a utopian economy.  No business can survive without making a profit.  But Brian Maloof and Tommy Smith bring another dimension to some of the cold side of capitalism.  In their own ways they chose to take the high road  by factoring into their business models the importance of people to their success.  They care(d) about profits and their workers, and they were never on the starting line to compete in a race to the bottom to cut costs, raise prices, and  enrich themselves.  May our communities know more Brian Maloofs and Tommy Smiths in the future. 

Well done. 
Comments
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Barry Schwartz
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March 17, 2013
Both Oliver's and Mike's comments should be the corner stone of business ethics and morals. I am a consultant and far to many times I get to see how owners, managers in small to large companies are only interested in how they can increase their own salary and bonus. I was taught early in life by my mentor, my father, who ran a small luncheonette and then a liquor store, that 1)you have never been in business unless you have had to make a payroll out of your own pocket even before you pay yourself and 2)Your employees are your most important resource, like the front line troops. In case readers take my comments as "bleeding heart" liberal, I want to state that I am an independent who votes for both parties. Once again, thank you Oliver for bringing these articles to the reader.
CobbCoGuy
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March 16, 2013
Good post, Mike Grier. I couldn't agree more about running a business in such a way that you take care of your customers, employees, and, if you're a public company, your stockholders. Capitalism at its finest.

Back in the day, I witnessed a large corporation file Ch. 11 and, as employees were laid off, the management team voted themselves "retention" bonuses. Funny isn't it? Why does an enterprise want to retain the very management that drove it into bankruptcy? Capitalism at its worst.

But, I digress.

Stepping back and looking at the big picture from 50,000 feet, so to speak, I'm unable to connect certain dots.

On the one hand, another MDJ blogger writes about record corporate profits, sustained job growth for many months, and the DJIA going through the roof. His thoughts, not mine.

On the other hand, the cited article about Maloof's business provides insight about how he's struggling. Really, the article, in my humble opinion, is about the challenges facing any and all small businesses these days.

What's going on in this economy?
Mike Grier
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March 14, 2013
Mr. Halle, or Brother Halle as I call him, knows of which he speaks. I know him well and call him a true friend. Disclaimer concluded.

I am a small business owner here in Cobb County, Southeastern Computer Associates (SCA). We provide IT support to small businesses on an as-needed basis. Our current employee count is 14. Since we were large enough to be able to do so we have offered our employees a group medical plan, not because we had to but because we should. We have no idea if our competitors do the same or not; we offer it because we feel we should. We also offer a profit sharing program. Again, because we feel we should. Lastly, we pay our employees when they work overtime, again because we feel we should. Our turnover rate is near zero. Imagine that.

Medical costs, office rent, whatever expenses a business incurs are either passed on in the pricing of goods and services or absorbed as "the cost of doing business". In the end, running a business is no different than living life. Do the right thing, and good things will come as a result.

Devlin Adams
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March 14, 2013
Well said. May I add that both these men embody the values that have, sadly, gone by the wayside for far too many of our citizens. These are the values that made this country great, and without which, I see the possibility of a very dim future.
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