Back when I was in college when I first started Stardock to help pay for school, I never would have guessed how much money is spent on useless crap just to have a business that deals with consumers.
Here’s some stuff that we spent hundreds of thousands of dollars a year on that I think a lot of people would be shocked about.
#1. LAWYERS. I’ve been in a number of lawsuits over the years. When I was in college (15 years ago), I’d never even met a lawyer. Now, 15 years later we spent well into the 6 figure range every year on lawyers. Why? Because nearly every day, someone threatens to sue us over some item or other. Occasionally we get sued for something.
The most obnoxious lawsuit I’ve ever been in (that I’m still bitter about to this day) was with Entrepreneur Media who sued us because we made a game called Entrepreneur and they believed that they owned the name Entrepreneur in all forms. We ended up settling because, well, 10 years ago, we couldn’t afford the lawsuit. If it happened today, well, it would have been a different story for them.
But every couple of weeks I get a summary of the various legal work that went in. Everything from company X arguing about a trademark, patent, or whatever that I’d never heard of to some user saying that they should get paid for “lost time” because a given program or game didn’t work the way they thought it would. Then there’s the people who claim that a given program or game “damaged” their computer and want compensation.
We tend to take a hard line on that kind of thing (I’d rather pay lawyers to fight something than to give in on some frivolous or baseless thing but it’s expensive).
#2 COMPLIANCE. When we were smaller, this wasn’t a big deal. But once you hit the magical 50 employees, all kinds of obnoxious state and federal regulations come in that serve no use other than to drive up costs.
As I watch the healthcare debate and see the vilification of insurance companies, I have to wonder how many people realize that a lot of that cost is due to state and federal regulations. Things like “tort reform” get mentioned a lot (which would help – see #1) but time spent complying with the government has always struck me as very wasteful. I mean, we make computer software that we sell. How much regulation hassle is there? As soon as you sell a product or service, the government is involved in a big way.
#3 EMPLOYEES. Of course, if you’re going to hire people, there’s going to challenges there. That’s not a surprise. What is a surprise is just how much time gets expended on “employee issues”. Ones perspective on a whole range of issues changes dramatically once you’re hiring and firing people as well as simply managing people.
Let’s face it, we humans are complicated. Each of us has our own “issues”. Like I said, it’s not a surprise that there are these issues. We can, in the academic sense “imagine” the kind of junk people have to deal with. But there is no substituting real world experience with it.
That’s why companies, even small ones, end up having to hire a HR manager (Human Resources). There’s always someone who just can’t manage to wake up in the morning or someone who’s “just going through a tough time”, someone who “broke up with their boyfriend”, and so on. There’s always something.
When you’re a small company, there’s a lot of flexibility. But once again, once you hit that magical 50 employee threshold, the government gets involved and is there to “protect” employees from us evil, money grubbing capitalists who might want to find out during an interview whether a potential employee is “trying to have a baby” or has a medical condition that requires them to miss a lot of work. Because you can’t ask those kinds of questions because, “it’s none of our business”.
Anyway, none of this is meant as a complaint of running a business. Rather, it is all interesting stuff that someone who never intended on starting a business but accidentally got into it has learned on the journey.
Too often people only hear one side of these issues without really considering the ramifications of “solutions” to problems in the work force.