Category Archives: Decisive Flow Buzz and News

Stuff about Decisive Flow

The true cost of production

I went to a panel the other night called ‘Sweatshops: good or bad” or words to that effect. The economic arguments for sweatshops (i.e why they are good) are very much the same as those used to justify slavery, equal pay for women (and now youth) and everything else that involves some form of exploitation:

  • Sweatshops help developing countries develop by bringing in revenue
  • Sweatshop workers are actually overjoyed to be working in a sweatshop because their only other option is unimaginably bad
  • Increased costs due to paying a living wage to factory workers in developing countries would add to the price of things here, or put the businesses out of business

The reason I am writing this is because I’m quite frankly appalled. This was a discussion held at a university and by the end a good number of people actually thought sweatshops were fine and in fact we should have more of them.

I wanted to ask the guy from the Business Round Table if he’d have the same arguments for sweatshops if he was given the choice of getting rid of them or working in one himself. I suspect if this was the case, economics would fly out the window. However, this is not a ‘political blog’, so I’ve put some thought into how small businesses can lead the way to running ethical business and why we should. So I’ll answer those economic arguments for you :)

Sweatshops help developing countries develop by bringing in revenue

Paying people a living wage would bring more revenue into the country. If we are dying to live in a globalised world, we need to accept the responsibility of becoming global citizens.

Abolishing child labour was used as an example of how laws setup to help people end up harming them – unemployed children turned to prostitution and hard labour. The simple way to get around this is to pay their parents more.

You could double the income of workers in some developing countries by paying them $2 more a day. You could ensure your workers work in a safe and healthy environment and can live off their earnings from a 40 hours week. You do have that power, it is up to you to push the issue.

Sweatshop workers are grateful for the opportunity

I never understand the logic of expecting the poorest and least powerful people in the world to come up with their own options. This argument makes me feel a little ill, we are THANKING ourselves to taking advantage of people with no other option. WE are responsible for creating options, and I see 3 clearly:

  • Be unemployed/a prostitute/work in hard labour
  • Work in a sweatshop that pays $2 a day
  • Work in a factory that pays $4 a day

It’s up to us to provide that third option. So do it. Other people are. I think you’ll find that your workers are much more overjoyed when they don’t have to work 12 hours a day 7 days a week just to survive.

Increased costs lead to closed businesses

I’m sure you’ve all heard that in the course of one year, Michael Jordan got paid more than every single Nike worker in Indonesia combined. You may have also heard that people used to be told that without slavery the British economy would collapse, but have you heard that doubling the salary of a sweatshop worker would generally increase the price of a pair of jeans by about $2. As a consumer, I don’t think I’d notice the difference between $185 and $187.

The old business model is changing. These days it is less logical to pay the minimum for production and have a massive advertising budget. More and more people buy stuff due to word of mouth, and word of mouth is free and hinges on having something to say. Can your customers tell their friends that your product is ethically produced? Can you cut your marketing budget by raising the quality of your product?

Big companies like IKEA have decided at long last to treat ALL their employees the same as they treat the ones in their own country. I doubt they’re going out of business.

Why it’s so important

When examples of business who are doing the right thing were mentioned, we were told that New Zealand wouldn’t be looking at making it compulsary for all companies to follow suit, I believe the idea was laughed at. It was a very strange feeling, sitting in a room while people talked academically about the suffering of others in relation to economies.

I’m no economist but I feel the arguments for sweatshops just aren’t that great. We’ve heard them before, they’ve lost before, and the world has gone on to be a better place for it.

I know sometimes morals are a pain, but imagine if you MET the guy whose exploitation your profited off. I also know the issue goes much wider into consumption and choices we can all make. I’m just not sure if that topic fits in this blog.

I’m sorry if this sounds like another lecture coming from someone who doesn’t personally have to change my business at all. I’m interested in hearing the difficulties that making this change would involve or barriers making it unreasonably difficult. I just feel that we can’t keep justifying the impossibly bad treatment of others with dry economic arguments. They are people after all.

Is David Beckham worth it?

If you live in Wellington or have ever been here, chances are, you’ll have heard of the Chocolate Fish Cafe. I wrote about The Chocolate Fish Cafe a while ago, and often hear stories about lazy Saturdays spent eating delicious breakfasts and downing coffees in the sun, just around the bays.

The Chocolate Fish Cafe is a Wellington icon. We LOVE it. When Wellingtonians and lovers of Wellington heard that the council is raising their rates to compensate for the extra seating the cafe requires, to a point that The Chocolate Fish will have to charge $7 for a coffee to keep going… they were outraged. The fact of the matter is, we think the owners SHOULD be making a fortune out of us, we love their place, we love taking guests from out of town there, we love it how people come to Wellington and head directly to The Chocolate Fish.

How often do you come across a business that we’re all willing to ‘subsidise’ through allowing reduced council rates? I don’t think I’ve ever heard of it before.

In the meantime, the council is shelling out a ‘modest’ contribution to the $1.5 million cost of bringing David Beckham over to play 55 minutes of football.

I abandoned my emotional side and looked at this situation from an economic point of view:

Despite the councils unwillingness to divulge how much they have actually paid for Bavid Beckham, lets say it’s $100,000, which, I believe is roughly the increase in rates they are demanding from the Chocolate Fish Cafe. Let’s examine two scenarios where the council ‘spends’ roughly the same cash:

David Beckham comes.

David BeckhamWellington is hit with football fever for a day, they attractive a massive one off crowd to watch the game and are gambling (I assume) that many people who go to watch David, will fall madly in love with the game and continue to support the Wellington team, thus earning Wellington some good coin.

The council leaves the Chocolate Fish Cafes rates where they are

The Chocolate Fish CafeThe hugely successful Wellington icon will stay open. For the next 5, 10, 15 years… The Chocolate Fish will continue to enhance Wellington’s image as a vibrant and quirky city, will continue to inspire visitors to drive or bike around the bays and take in Wellington beautiful scenery, will continue to pay significant rates and benefit the council.

I don’t get it.

When customers own the business

I saw this website a couple of weeks ago and it started me thinking. The site is looking for 25,000 Liverpooleans (‘Liverpool people’?) to each donate 20 pounds to communally buy a creative center. I have also seen entire football teams being bought by their fans.

Wellington has a massive music culture. We LOVE our bands. Most of them are heavily indebted to Record Companies.

So why don’t we buy them?

Why don’t Wellingtonians back our bands? Surely between us we can front up the cash to get records created and can all share in the proceeds. We’d offer MASSIVE word of mouth because we’d all have a stake in their success, and it would reduce that now common moral conundrum of illegally downloading music.

I don’t know, but I feel the age of record giants should be coming to an end, maybe the age of bad pop music will shortly follow (who’d back Britney after her recent performance?)

Maybe someones doing it already.

Technology rocks.

I’m in the process of moving flats. It’s been a fairly tricky task given that this appears to be the worst time of the year to be looking, but I have found a place… It came with no furniture and no flatmates AND I needed to sign the lease in 4 days.

In the past, this would have been a fairly frightening prospect – forking over a fairly hefty sum with no guarantee of anyone else to share costs and nothing to sit on or watch or keep your food cold in or to wash your clothes with…

So I turned to Trade Me.

I found the required flatmates in 4 days flat, and now I’m stocking the house with stuff for next to nothing.

Isn’t that cool?

I can still remember finding flats a few years ago and the trauma it involved – scouring those 5 word ads to try to get an impression of the place. Waiting for the weekly Trade and Exchange to surface so you could look for second hand stuff… Things just took so LONG. And the number of times you’d turn up to look at something at it would be completely wrong.

We were talking the other day about what generation we are. Our parents were the generation that still finds TV and cellphones wacky, I think we’ll forever be the generation that marvels at the internet. I can just imagine trying to describe this situation to my kids (when I have some) and them rolling their eyes “Of COURSE it’s that easy”.

Making a difference

Kiva LogoIf you own a small business and a heart, Kiva is for you. Kiva is a ‘micro-loans’ website, allowing individuals from all over the world to connect, it’s not a charity as such, but I think the concept could replace a large number of charities eventually.

Basically, you loan money to people who own or are trying to start a small business in a country that is way less fortunate than yours. They pay it back over the course of the loan (without interest) and are given a kickstart to build their business.

There is no catch. A friend of mine and I are both really interested in micro-lending, and she has taught me a lot about the success of the idea – micro loans have a lower default rate than any other loans. To put it bluntly, poor people don’t get given much, when they are given something, they really appreciate it.

I just wrote to fellow Wellingtonian Miraz, who has already made a difference in one womans life. She shares my philosophy that big change happens on a small scale and after the loan was repaid has gone on to lend to more people. She backs Kiva completely ( an important reference because these days it’s hard to pick the scams!)

I’m going to make my first loan this weekend. I hope others will join me.

UPDATE: Turns out Kiva has now been featured on Oprah and Bill Clintons book. They have literally run out of people to loan money too and have limited the amount you’re allowed to loan to $25. Incredible.

Is your business sustainable?

I’m not sure if ours is, but I’d like it to be.

Small business should be the home of sustainability. We know how to live off a shoestring, to use our resources until they are well and truly done for. We like to save money, we like to achieve things, our livelihood depends on us standing out.

Simple measures we can take

I’ve been thinking about it a bit recently and talking to others about potential small solutions that make a big difference. We aren’t necessarily doing all these things, but I think we should make it our 6 month aim to be. I’m also very interested in hearing what other small businesses are doing and how they can save money doing it.

Live close to work

If you have less than 10 people, you should all try to live within walking or biking distance, or at the very least, use public transport. Why hire people who live far away? Build your daily exercise into getting to work – My sister often walks an hour to get home to the suburbs and arrives refreshed and relaxed.

Try to cut paper waste

We send out our invoices via email. We’ve had one or two customers complain and politely tell them that they can print them at their end if needed, we can’t justify the waste… And it saves us tonnes of money!

We also ask customers to set up direct bank transfers instead of sending cheques. We don’t have a 100% hit rate, but the time and hassle it saves when cheques aren’t sent is enormous! I use the envelopes we get as srap paper for all the notes we jot down throughout the day.

We store copies of all our valuable information online instead of in printed version. If you do print stuff, print on both sides!

Recycle

It is a shame that for some reason in the last two offices we’ve had, there has been no recycling. We do put recyclables aside and Tim sometimes takes them home, but if the cleaners get in first, I suspect it all goes in the bin. One aim for the next 6 months is to sort the recycling situation in our office.

Every time you get rid of a computer or a cellphone or any electrical junk, THINK before you bin it. There are recycle stations, companies like Vodafone do have drop off days. if it’s not broken, someone else might want it… Take it to the Salvation Army or charity store.

Turn off your computers and lights at night

Once again, we’re guilty… some stay on, for no reason at all. We live in a world so full of waste that we forget it’s actually no burden to flick the switch when you leave the office.

Avoid Taxis

If you work in a city like Wellington, there is virtually no need for taxis. Bus lanes enable busses to get there just as fast or faster, and walking in the middle of the day gives you the chance to get some fresh air. There is no reason why you can’t plan to finish meetings and events with 15 minutes to spare before the next one.

Or why not get a company bike? Slap on your logo and make it the first point of call for transport. I’ve heard of a company that did this recently and replaced an entire company car with a bike. Needless to say, they are gleeful about the extra money in their pocket.

Support a charity

While organisations like Greenpeace wont accept corporate sponsorship, you can do it individually. Surrounding yourself with information about what people ARE DOING, keeps you inspired to do something yourself.

It may not be world changing… But it’s a start

I know these sound small. It’s the same argument with plastic bags – why bother cutting yours if the rest of the world don’t? Because your usage however insignificant compared to the billion other people on the plant, IS SIGNIFICANT compared to what it could be.

It’s not going to be long before we actually have no choice in the matter, so why not get prepared now? It’s always better to be a leader, not a follower.

Today’s lecture is now complete. :)

Catching the Blogging Bug

I got my sister BLOGGING! She had to move all the way to Canada to kickstart her blogging career, but small sacrifices…

Some highlights so far:

On Yoga:
“Unfortunately it turns out yoga is a silent thing, so not the ideal way of making friends! Mind you, we did working on drawing ourselves into our fingertips then ‘connecting’ with the other ‘yogos’ mentally – so maybe I’ll become friends with them in a spiritual way…?”

On bussing round Canada:
“I took the bus that is meant to take 18 hours hours ish and is only slightly cheaper than the 1 hour flight. Why? The scenery of course! Turns out I was the only one there for that, everyone else was just crazy (like I should have expected once I thought about it…). The bus then broke down at 5am in the middle of nowhere for 5 hours.”

On souvenirs:
“I am now the proud owner of a beautiful Didgeridoo! In terms of spontaneous purchases, I admit it is a bit random.”

On driving in Canada:
“as it turns out I have trouble remembering that I have to allow a lot more room when I pass parked cars on the right and needed some gentle (if somewhat panicky) reminders! But I think deep down even he was blown away by my super right-hand driving skills.”

If anyone is reading this from Canada, look out for her! (ha ha, the funny thing is, in New Zealand you can almost say things like that and half expect people to run into them)

Loving what You Do

I realised the other day, that pretty much everyone I know loves their job. I’d never thought about it until someone I know started a job that they DIDN’T love and I was gobsmacked that they could do that to themselves.

Tim and JamesWhile I was yapping to people at the Small Business Expo, I came across an absurdly large amount of people who described their business as ‘boring’. BORING. As someone who gets genuinely enthused about BUSINESS PLANNING (note to self: spend next post justifying this attitude), I find it very hard to believe that others in small business don’t get as excited about what they do as we all do about PlanHQ and Decisive Flow.

While I was in Fiji earlier this year, I spent a lot of time thinking about lifestyles. A lot of the Fijians I was around literally work to live… Or not at all. They live what we would so sympathetically call a ‘more primitive’ existence, yet you’d be hard pressed to find a Fijian whose smile wasn’t radiating off their face 90% of the time. A lot of people didn’t have tv’s or cars or an architecturally designed house, but then again a lot of people find it hilarious that we in ‘first world countries’ don’t know how to build our own homes.

There is more an more awareness about the ‘work life balance’ and ’60 hour week’ and I’m starting to suspect a lot of us are getting the basics wrong. Excuse my philosophising, but if we could sum up the one reason for our existence, it would be happiness. And if you don’t LOVE what you spend over 8 hours a day doing, maybe it’s time to take a serious and indepth look at WHY.

A friend of mine once said, ‘whenever you say “I don’t have time”, replace “time” with “life”‘ – I think if we all did a little more of this, we’d start recognising what exactly it is that we love and prioriotising it higher.