50% of all new business fail within the first 5 years.
The fact that small businesses have a high failure rate does nothing to refute the point that businesses owners can and do continue to extract income/value from their businesses even when there's no profit.
Companies can be losing money and the owners will still get paid - even extravagantly. There are literally thousands of business and remuneration structures around that limit the liabilities of owners while ensuring they continue to earn an income.
At the moment, the firm I work for is doing advisory work on an business jet firm winding up operations. The company NEVER generated a profit in ~8 years of operations, but its co-founders are walking away MUCH richer than when they started the business. The biggest losers out of the whole thing are its suppliers and debt holders.
Care to answer my question?
Sure. The question was "who is gonna invest their time and capital to start a company, just to give it to the laborers?"
To which I answer:
People with a sense of fairness and morality;
People with a sense of community;
People who weren't raised with a "%^&* you I've got mine" mentality;
People who realise that sharing in the success of a firm can help motivate a workforce;
People who realise that business success isn't necessarily limited to classical/neoconservative metrics of profit, return on capital, return on equity and share value;
People who feel obligated to share their success and realise that a rising tide can lift all boats;
People who believe that their business success was the result of collective effort and risk, and so the fruits of that should be shared
People who realise that workers' share of profits has dropped precipitously over the past 50 years, while the share of those who have money and use money to make more money has risen
People who want to attract more and better workers to their company
Those sort of people.
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