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Thread: 97% of small businesses in America make less than $250K a year

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    Here, there, Savoir Faire is everywhere.

    97% of small businesses in America make less than $250K a year

    It's time once again to delve into the wonderful world of bullshit statistics.

    There are lies, damn lies, and statistics.
    --Mark Twain

    Truer words were never spoken. Thank God above for blessing us with the genius of Sam Clemens.

    If you're really interested in how statistics are used to lie, type this out, bronze it, and hang it on a wall in your office:

    YOU CAN MAKE STATISTICS SAY WHATEVER YOU WANT BY SKILLFULLY CHOOSING WHAT TO COUNT

    That is the key.

    How did Biden employ that tactic last night when making the statement in the title? Read the title again carefully, employ a heavy dose of skepticism and reason and see if you can find where he's being deceptive. I'll give you a hint: His words may be exactly right. But how could his words be right and still be deceptive? Answer: Lies, damn lies, and statistics. Follow me on this scenario:

    Let's say you have an engineer married to an accountant living in California. Already this couple makes close to but not over $250K. (How do I know this? Personal experience.) Furthermore, this engineer works with other engineers married to attorneys, managers, doctors etc. so although this couple is making good money it ain't top dollar and nobody mentioned so far is a business owner.

    Now let's say this engineer/accountant couple want to start a business. They open up an LLC (that's the "pass-through" Biden was talking about last night--it means the taxes in an LLC "pass through" that protective barrier that separates owners from their company. The company is taxed at the personal rate not the largest corporate tax rate in the world.). Let's say they consider their startup a raging success if it makes $30K. This puts them just over the $250K line. Stop and consider that for just a second. . .

    The $30K BUSINESS puts the OWNERS in a bracket above $250K.

    Do you see how Biden is being deceptive? What is he counting and what do you think he's counting? The two are radically different.

    Lies, damn lies, and statistics.

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    Yours is a straw man argument...

    I see you as distorting..

    First...the claim was 97% of Small Businesses...NOT people who own businesses.

    How many business owners have together, 2 Full time jobs outside their business?????

    I would submit that most business owners work full time AT their business and not the scenario that you set up.

    Please think you point over again.

    97% of SMALL BUSINESSES....Your example is not that...

    You CLAIMED this business made 30,000 thus give validity to the 97% claim...

    leave the owners of your story and their income from outside their business out of it as its 2 different incomes.

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    Join, or Die nonsqtr's Avatar
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    Quote Originally Posted by Angel of Dearth View Post
    Lies, damn lies, and statistics.
    What is the upper limit for a "small" business?

    What is that, a million? Or what?

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    Senior Member Rorschach's Avatar
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    I can tell you this: A BUSINESS that makes less than $250,000.00 a year is a VERY small business, with, no more than 4 or 5 employees, MAX.

    Now, if he is talking about the take home pay of the OWNER, that is a different story.

    But, your very point here is what irks me with these sorts of numbers. $250,000.00 a year is a lot of money, in Boaz, Alabama, but, far less in New York. And, as I pointed out, that is NOT all that much "profit" for even a moderately sized small business. Thus, the reason I say, TAX INDIVIDUAL INCOMES, and lay off the businesses.

    What's more, I say we start with a law stating that ALL members of Congress will be taxed at 2% above the tax rates they set for others......

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    Quote Originally Posted by Rorschach View Post
    I can tell you this: A BUSINESS that makes less than $250,000.00 a year is a VERY small business, with, no more than 4 or 5 employees, MAX.

    Now, if he is talking about the take home pay of the OWNER, that is a different story.

    But, your very point here is what irks me with these sorts of numbers. $250,000.00 a year is a lot of money, in Boaz, Alabama, but, far less in New York. And, as I pointed out, that is NOT all that much "profit" for even a moderately sized small business. Thus, the reason I say, TAX INDIVIDUAL INCOMES, and lay off the businesses.

    What's more, I say we start with a law stating that ALL members of Congress will be taxed at 2% above the tax rates they set for others......
    $250K profit for a small business is a nice profit.

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    Senior Member Rorschach's Avatar
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    Quote Originally Posted by nonsqtr View Post
    What is the upper limit for a "small" business?

    What is that, a million? Or what?
    I thought it was based more on the number of employees.

    Either way, I know of several "Small Businesses" that pull in well over $250,000.00 a year, although the actual owners do not officially make that. (Much of the additional profit can go to any number of expenditures, such as capital improvements, etc.)

    A friend of mine works for a company that is going like GANG busters, right now, well exceeding the Million dollar a year mark. Yet, three years ago, they were almost ready to close their doors. The Owner, however, continued paying his employees, doing all he could to find work....at that point, they were in the red.....

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    Senior Member Rorschach's Avatar
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    Quote Originally Posted by USA-1 View Post
    $250K profit for a small business is a nice profit.
    If it is made up of about 4 or 5 employees, perhaps.

    Put 50 employees in a metal shop, and it better make over $250,000.00, or else we will be buying our gutters from China as well!

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    Quote Originally Posted by Rorschach View Post
    If it is made up of about 4 or 5 employees, perhaps.

    Put 50 employees in a metal shop, and it better make over $250,000.00, or else we will be buying our gutters from China as well!
    250K for a small business with 50 employees is still a decent profit. You know we are talking about net profit, not revenue, right?
    Definition of a Small Business
    A small business is a privately owned business with low sales and employee levels. The qualifying criteria for obtaining a Small Business Administration loan state that a small business is one with fewer than 500 employees and less than $7 million in annual sales. The reality is that the average small business in the United States has fewer than 20 employees and less than $2 million in sales annually. Various metrics for determining the size of a small business affect profit margins because larger companies generally deploy new technology whereas smaller companies rely on labor and less efficient equipment.
    Average Business Profit Margins
    The average net profits of a small manufacturing wood products business, with $2 million in revenue annually, according to the website "Biz Stats," is 14.56 percent per year. Medical equipment and suppliers, with $2 million in revenue, have a net profit margin of 26.95 percent annually. By contrast, computer and electronics products return a net profit of 53.94 percent, and the food processing sector, according to "Biz Stats," has a net profit margin of 10.28 percent.
    Last edited by USA-1; 12th October 2012 at 12:18 PM.

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    Senior Member bajisima's Avatar
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    Quote Originally Posted by USA-1 View Post
    250K for a small business with 50 employees is still a decent profit. You know we are talking about net profit, not revenue, right?
    Is that profit after everything is paid for? Taxes, healthcare, real estate etc?

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    Senior Member Rorschach's Avatar
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    Quote Originally Posted by USA-1 View Post
    250K for a small business with 50 employees is still a decent profit. You know we are talking about net profit, not revenue, right?
    Are we speaking of "net Profit" above all expenditures, including year end bonuses for both employee and management, re-investment in capital equipment, etc.???

    If so, then I agree, $250,000 STRAIGHT PROFIT, after everything else, is nice.

    But, remember, there are many businesses who, once they get a nice profit like that, seek to buy new equipment, a nicer office, additional training, re-investment in other areas, etc. That sort of stuff can eat $250,000.00 of profit in short order......

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