Business Ownership with No Control

The January 21, 2020 Wall Street Journal had an article titled, “Sears Woes Overwhelm Spun-Off Hardware Stores.” It’s common knowledge Sears is in trouble, big trouble. What this article points out is independently owned Sears Hometown and Outlet Stores are in dire straits because Sears is, to put it bluntly, screwing them.

The stores don’t own the inventory, Sears owns it and they pay the store owners a commission. But Sears is not able to provide goods to sell due to their financial problems. And, they control the prices the stores can sell things for, which are higher prices than on the Sears website.

Arrangements like the above are commonplace. You think you’re in business for yourself but you’re a quasi-businessowner. It may be what you can sell, what you can charge, where you can market yourself, etc. No matter what, if the restrictions stifle what you can do, you should reconsider.

People who want to be in business, versus working for someone else, generally want control, independence, the ability to be creative, and more income (and equity). Pretty much in the above order – money is rarely mentioned first, second, or third.

If you’re thinking of owning a business, know what you want from the business and be very careful if you’re not in full control.

“There is always a well-known solution to every human problem – neat, plausible, and wrong.” H.L Mencken

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