December 8, 2023

Sketch Guy: The Beauty of Limits

How often do we hear ourselves saying we want more? More freedom, more money, more time. More seems as if it would always be great, until we get it. Then we’re faced with a new set of problems that comes with having more.

My work is location-independent. My wife and I could live anywhere that our budget will allow, and that ends up being a lot of places. Normally having more options is what we want, but this has actually led to a consistent problem that we spend a lot of time discussing.

When we decided we were ready to leave Las Vegas, the options were a bit overwhelming. We started to envy friends who were transferred to a specific city for work, even if the city wasn’t our idea of paradise.

It removed the pain of having all these options. It made things simple. They went where they were told. Instead of considering multiple cities and states, our friends just needed to find the best place to live within one geographic area.

Besides our budget, we didn’t have much else to help narrow our options. The number of options wasn’t making the process easier, just more stressful. Luckily our decision to land in Park City, Utah, has worked out incredibly well. But I’m not looking forward to the day (if it comes) that we decide it’s time to move again.

I was reminded of this “more dilemma” a few weeks ago on my way to an interview. The taxi driver asked me where I was headed. I explained that I was on my way to talk about what advice I’d offer to the next Powerball winner. Barely able to contain his excitement, my driver pulled out his lottery tickets, and while waving them around, talked about how amazing it would be if he won.

Three tickets ended up winning the $448 million jackpot, two in New Jersey and one in Minnesota. I’m pretty sure my taxi driver wasn’t one of them, but our conversation got me thinking about this question: Why do we want to win? Yes, I do know there’s an obvious answer, but the obvious answer hides a few problems.

We say we want more money (who doesn’t?), but it’s surprising to me how few people can explain exactly what they’d do with that money. Oddly enough, not knowing why we want more can create problems.

Think about our constant pursuit of happiness (it is affirmed in the Declaration of Independence). We often define happiness as more money or time, but if we don’t understand why we’re pursuing it, can we really understand the trade-offs involved?

Do we understand that the pursuit may actually cost us the very thing we’re pushing so hard to achieve?

Paul Graham, the co-founder of Y Combinator, has an interesting perspective on this problem. As a successful programmer and venture capitalist, he’s had many opportunities to see this pursuit of more up close and offered this thoughtful insight:

“Most people would say, I’d take that problem. Give me a million dollars and I’ll figure out what to do. But it’s harder than it looks. Constraints give your life shape. Remove them and most people have no idea what to do: look at what happens to those who win lotteries or inherit money. Much as everyone thinks they want financial security, the happiest people are not those who have it, but those who like what they do. So a plan that promises freedom at the expense of knowing what to do with it may not be as good as it seems.”

It may seem counterintuitive, but constraints give us something to use as a framework, a way to help us judge what we do next. Think about what constraints do for investing. Imagine you had more time to focus on your portfolio. What would you do with it?

I suspect you might do something kind of foolish, like trying your hand at being a day trader. After all, you have the time, why not? But if your time is limited, how much more likely are you to behave? How much easier would it be to buy good things and then own them a long time because you don’t have the time to do anything else?

It seems crazy to think about having too much time. Yet I see retirees or entrepreneurs who sold their businesses bouncing off the walls in the first few months of making the transition. They suddenly have all this time on their hands, and freed from the constraints of a daily schedule, they don’t know what to do. More time hasn’t made their lives happier, at least at the beginning, but I suspect many of them thought it would.

Sometimes we become so focused on what we think we should want that we’re blinded to what’s right in front of us. A great example is this classic joke:

A fisherman owns a boat and is running a nice fishing business with it. He meets a venture capitalist who promptly offers to invest in the man’s business.

Fisherman: “Why would I want you to invest?”

V.C.: “Well, with my capital you can buy a second boat and double the size of your business.”

Fisherman: “And why would I want to do that?”

V.C.: “Because eventually you’ll grow your business so large that you’ll end up selling it and making a big wad of cash.”

Fisherman: “You mean, so that I’ll be able to retire down here and buy a boat?”

I’m the first to admit that more freedom, more money and more time can mean good things for people. But the next time you hear yourself saying, “I want more… ,” you’ll most likely be happier with the result if you remind yourself of these three things:

1. More of anything doesn’t always make life easier, and it can make your choices harder.

2. Constraints can give us structure and help us make the most of what we do have.

3. If you’re chasing after more, do yourself a favor and create a plan for what you’ll do if you ever get it.

More without constraints or plans just becomes a burden, one more problem we need to solve. And that seems like the last thing that will make you happy.

This article has been revised to reflect the following correction:

Correction: August 19, 2013

An earlier version of this article misidentified the American document that refers to the pursuit of happiness. It is the Declaration of Independence, not the Constitution.

Article source: http://www.nytimes.com/2013/08/19/your-money/the-beauty-of-limits.html?partner=rss&emc=rss

You’re the Boss Blog: Why Red Iguana Considered Opening a Second Restaurant Two Blocks From the First

Lucy Cardenas and Bill Coker, owners of the Red Iguana.Jeffrey D. Allred for The New York TimesLucy Cardenas and Bill Coker, owners of the Red Iguana.

Case Study

What would you do with this business?

A case study we’ve just published recounts the dilemma experienced by Red Iguana, a family-owned Mexican restaurant in Salt Lake City.

A local favorite, the restaurant, which had been featured on the Food Network’s “Diners, Drive-ins and Dives, had people lining up around the block for its food when the city announced a disruptive public works plan to build a light rail line down the middle of Red Iguana’s street. Scheduled to start in 2010, the multiyear project had the potential to dissuade customers from visiting and, during its most intense periods, to close the restaurant — a huge potential loss for a one-location business that had been serving 700 people a day, 363 days a year.

In response, the restaurant’s married owners, Lucy Cardenas and Bill Coker, came up with a somewhat counterintuitive plan. One option they considered was to buy a warehouse and turn it into a second location for the Red Iguana — just two blocks from the first. But to get the money to buy and develop the location, they would have to convince both their bankers and the Salt Lake City Office of Economic Development that this was a good idea — and both were skeptical.

We asked several restaurant owners what they would advise. You can read their comments below — and please tell us what you think, too. Next week, we’ll follow up with another blog post that will explain what Ms. Cardenas and Mr. Coker decided and how it worked out.

Danny Meyer, founder, Union Square Hospitality Group, which includes Union Square Cafe and Gramercy Tavern: “Though it has worked for some — Nobu, Nobu Next Door — I would absolutely not advise repeating the same concept so close to the first. It’s confusing to patrons, and you may inadvertently hurt morale as staff members will invariably feel they might not be working in the better of the two.”

Anton Schulte, co-owner of Bistro Daisy in New Orleans: “In most cases no one knows the customer base better than an owner with a long history. Obviously, they’re doing good numbers at the one location, possibly even near capacity. From that standpoint, and with the expected interruption in business, the additional location makes sense. As for what I would have done if it were my business … I would probably just hunker down financially and try to weather the business interruption storm. I don’t know their financials, but at the level of business that they say they are at, I would assume they have a little bit of money in reserves.”

Charles Phan, owner, The Slanted Door and other restaurants in the San Francisco Bay Area: “I would strictly look to expansion only if you have a niche in the market that needs to be filled or you’re bringing something new to the table and it is interesting to you and the customer. I wouldn’t do it just because there are extra people around the corner. For me, it never works to redirect somebody to a second location with the same name.”

Ian Schnoebelen, chef and co-owner of Iris in New Orleans: “I think that opening the second location, even two blocks away, is a good idea. I do, however, think that the concept needs to be a bit different. Also I believe that the new one should probably be more casual than the flagship. Purchasing the building instead of renting is key as well. If the restaurant doesn’t work out, the building can be rented, and in the end they are going to own a nice piece of property.”

Article source: http://feeds.nytimes.com/click.phdo?i=dada8c493342802f2eaf85db384ce156

You’re the Boss Blog: Would You Open a 2nd Restaurant Two Blocks From the First?

Lucy Cardenas and Bill Coker, owners of the Red Iguana.Jeffrey D. Allred for The New York TimesLucy Cardenas and Bill Coker, owners of the Red Iguana.

Case Study

What would you do with this business?

A case study we’ve just published recounts the dilemma experienced by Red Iguana, a family-owned Mexican restaurant in Salt Lake City.

A local favorite, the restaurant, which had been featured on the Food Network’s “Diners, Drive-ins and Dives, had people lining up around the block for its food when the city announced a disruptive public works plan to build a light rail line down the middle of Red Iguana’s street. Scheduled to start in 2010, the multiyear project had the potential to dissuade customers from visiting and, during its most intense periods, to close the restaurant — a huge potential loss for a one-location business that had been serving 700 people a day, 363 days a year.

In response, the restaurant’s married owners, Lucy Cardenas and Bill Coker, came up with a somewhat counterintuitive plan. One option they considered was to buy a warehouse and turn it into a second location for the Red Iguana — just two blocks from the first. But to get the money to buy and develop the location, they would have to convince both their bankers and the Salt Lake City Office of Economic Development that this was a good idea — and both were skeptical.

We asked several restaurant owners what they would advise. You can read their comments below — and please tell us what you think, too. Next week, we’ll follow up with another blog post that will explain what Ms. Cardenas and Mr. Coker decided and how it worked out.

Danny Meyer, founder, Union Square Hospitality Group, which includes Union Square Cafe and Gramercy Tavern: “Though it has worked for some — Nobu, Nobu Next Door — I would absolutely not advise repeating the same concept so close to the first. It’s confusing to patrons, and you may inadvertently hurt morale as staff members will invariably feel they might not be working in the better of the two.”

Anton Schulte, co-owner of Bistro Daisy in New Orleans: “In most cases no one knows the customer base better than an owner with a long history. Obviously, they’re doing good numbers at the one location, possibly even near capacity. From that standpoint, and with the expected interruption in business, the additional location makes sense. As for what I would have done if it were my business … I would probably just hunker down financially and try to weather the business interruption storm. I don’t know their financials, but at the level of business that they say they are at, I would assume they have a little bit of money in reserves.”

Charles Phan, owner, The Slanted Door and other restaurants in the San Francisco Bay Area: “I would strictly look to expansion only if you have a niche in the market that needs to be filled or you’re bringing something new to the table and it is interesting to you and the customer. I wouldn’t do it just because there are extra people around the corner. For me, it never works to redirect somebody to a second location with the same name.”

Ian Schnoebelen, chef and co-owner of Iris in New Orleans: “I think that opening the second location, even two blocks away, is a good idea. I do, however, think that the concept needs to be a bit different. Also I believe that the new one should probably be more casual than the flagship. Purchasing the building instead of renting is key as well. If the restaurant doesn’t work out, the building can be rented, and in the end they are going to own a nice piece of property.”

Article source: http://feeds.nytimes.com/click.phdo?i=dada8c493342802f2eaf85db384ce156

You’re the Boss: Oh Baby Answers Its Chicken-and-Egg Question

Fran FreeCourtesy of Oh Baby FoodsFran Free

She Owns It

Portraits of women entrepreneurs.

Last summer I wrote about Fran Free, founder of Oh Baby Foods. She faced the start-up’s classic chicken-egg dilemma. She wanted to land a large contract with a major retailer, but lacked the resources to fulfill it, partly because she worked out of a leased restaurant kitchen, where her maximum output was 300 cases of organic, locally sourced baby food a year. On the other hand, she couldn’t ramp up production without the promise of some much-needed business. Oh Baby’s 2010 monthly sales were about $2,000. While its customers are devoted, the company has not turned a profit.

A lot has happened in the last year. For starters Ms. Free, formerly known as Fran Gunsaulis, got divorced and now uses her maiden name. Along with her 3-year-old daughter, she moved to downtown Fayetteville, Ark., from a nearby rural area and held a few part-time jobs to stay afloat after putting her savings into Oh Baby.

Ms. Free also made big changes within her company. She took readers’ advice and scrapped her time-consuming meal-delivery service. Several commenters pointed out that she desperately needed funding. One, SirWired, suggested she find an investor or throw in the towel. Ms. Free, who took no salary from June 2009 to June 2010, realized he had a point. “Last fall, I came really close to putting Oh Baby to bed for awhile,” she said. But just when the company’s prospects seemed bleakest, she said, “the clouds parted and the sun came out.”

While attending a Chamber of Commerce event, Ms. Free ran into two Oh Baby fans, a couple who bought the food for their daughter and who had previously expressed interest in investing in the company. Back then, Ms. Free had turned them down, determined to go it alone. “My need wasn’t so great at the time because I still had personal funds to put into the business,” she said.

With those funds gone, she accepted their offer to lend the business $100,000 at 5 percent interest for five years (the first six months of the loan term are interest-free). At the end of the five years, the couple, who are not professional investors, will have the option to buy 10 percent of the company. Ms. Free deposited their check last month.

The money allowed Oh Baby to contract with a manufacturer. Ms. Free has answered the chicken-egg question by opting to increase production, which will begin in September. She hopes — and has reason to believe — that contracts with major retailers will follow.

Since my last post, she has gotten her products into Whole Foods in Little Rock, Ark., and  Tulsa, Okla., through the chain’s local forager program, which enables small retailers to bypass the longer, more complicated approval process required of foods sold regionwide. With sufficient sales data from those locations, Oh Baby will be positioned to present the line to the Southwest regional buying team, which purchases for 22 stores. Oh Baby is also sold in seven Harps stores and in several independent retailers.

Another big change is planned. Oh Baby is sold in the freezer section, in cartons that hold three rigid plastic cups. Shoppers must know to look for it there, instead of on the shelves with most other baby foods. But now that Oh Baby can meet the minimum volume requirements of a contract manufacturer, another relatively new packaging option is available that will allow the company to sell food in shelf-stable pouches. “When I started out, manufacturers weren’t really using the flexible pouch, so my options were jar shelf-stable or frozen, which is better nutritionally,” said Ms. Free.

On Nov. 13, Oh Baby plans to introduce a line of shelf-stable food. At that time, the frozen variety will no longer be available. Ms. Free is refining her new ingredient lists and recipes. She said Oh Baby will be certified organic this year.

Ms. Free also took the advice of a frequent commenter, Dominick Celentano, who urged her to learn more about the retail business. Toward that end, she has taken a part-time job with Horizon Marketing, a natural products broker that represents 40 food, body care and supplement lines to retailers regionally and nationally. “It’s the perfect job, because it lets me see how the process works,” said Ms. Free. Her responsibilities include setting up in-store demonstrations for the product manufacturers who want to get onto retailer shelves and maintaining Horizon’s database.

She realized that Oh Baby could use Horizon’s services as well and hired the broker to help get the line into retailers and to represent it in all chains and independents where it is sold in the region. “If and when the time comes, Horizon will also represent me nationally,” she said.

You can follow Adriana Gardella on Twitter.

Article source: http://feeds.nytimes.com/click.phdo?i=fdd1330b4f9d04712ef1b6b007463d4b

You’re the Boss: What If You Suspect an Employee is Undocumented?

David Cox believes that the workers he had to fire because they were undocumented are now employed by his competitors.Max Whittaker for The New York TimesDavid Cox believes that workers he had to fire because they were undocumented are now employed by his competitors.

Today’s Question

What small-business owners think.

We’ve just published an article by Adriana Gardella that describes the impact of stepped-up enforcement by Immigration and Customs Enforcement, also known as ICE, on American small businesses. It cites the example of David Cox, who runs a family-owned nursery in Visalia, Calif., that was one of 1,444 businesses audited by ICE in 2009. Last year, 2,196 businesses were audited.

Even though Mr. Cox has always played by the rules in his hiring practices — and faces no fines or charges — an ICE audit revealed that 26 of his 99 employees were not authorized to work in the United States, and he was forced to fire them. While he has struggled to find replacement workers, Mr. Cox says he has heard that his former employees have found work in the area, some presumably with his competitors.

It is a dilemma that more and more business owners are likely to face. As Leon Versfeld, an immigration attorney in Kansas City, Mo., told Ms. Gardella, it’s not just about agriculture businesses that were getting audited that had exposure. “Any company is at risk at any given time,” Mr. Versfeld said.

So here’s the question:

You have always followed the rules when hiring, but you have come to suspect that an important employee is here illegally. This employee has been with you for more than 10 years, pays taxes, has American-born children, and has been playing an increasingly important role at your company. You’ve never voiced your concerns, because you really don’t want to know. But you’ve heard things from other employees, and now you’re worried about what might happen.

What do you do?

Article source: http://feeds.nytimes.com/click.phdo?i=a42d8371aae793ebc01411688d52b9e3

Bank of England Holds Interest Rates Steady

FRANKFURT — The European Central Bank left its benchmark interest rate unchanged Thursday, but was expected to signal that markets should expect a move next month — despite the euro area’s uneven economic recovery.

The Bank of England, meanwhile, kept its main interest rate at a record low amid concerns that the country’s economy is still too weak to cope with higher borrowing costs. It did not issue a statement.

Jean-Claude Trichet, the E.C.B. president, was to hold his regular news conference at 2:30 p.m. Frankfurt time.

Analysts and economists predicted he would say that the bank is “strongly vigilant” toward inflation. That language would indicate a rate increase in July is probable, though the bank always leaves its options open.

On Thursday, the E.C.B. left its rate at 1.25 percent, after raising it in April from 1 percent, the first increase in two years. The benchmark rate in Britain was left at 0.5 percent and the central bank also kept the size of its asset purchase plan unchanged at £200 billion, or about $328 billion.

With Germany, the euro-zone’s largest economy, growing so quickly that some economists fear overheating, the E.C.B. has been trying to nudge interest rates back to levels that would be normal in an upturn.

But the bank faces a policymaking dilemma because the Greek debt crisis still threatens growth in the 17-member euro area as a whole. Economies in Spain, Ireland and other so-called peripheral countries remain sluggish. Higher rates could make it that much harder for those countries to recover.

The economy also remains fragile in Britain. Consumer confidence took a hit in April as more people claimed unemployment benefits and real wage increases lag inflation, weighing on living standards. Spending cuts and tax increases that are part of the government’s austerity program made households even more reluctant to spend.

“The story of weak growth is still going to continue for a while,” James Knightley, a senior economist at ING Financial Markets in London, said.

Some economists had predicted rates would rise in May this year, but as the economic outlook deteriorated have pushed that back to next February. Mr. Knightley expects an increase as early as November this year.

The British economy stagnated in the six months until the end of March. The Bank of England governor Mervyn King has warned that inflation could accelerate to about 5 percent in the short term before falling again. Higher consumer prices, partly a result of higher commodity prices, have started to dampen household spending as companies remain reluctant to hire and banks continue to hold back on lending.

Paul Fisher, a Bank of England official, argued last week that raising interest rates should be delayed until the economy was stronger. The International Monetary Fund on Monday backed Prime Minister David Cameron’s plan to cut the budget deficit, which had been criticized by the opposition Labor Party as too strict and harming the economic recovery.

Julia Werdigier reported from London.

Article source: http://www.nytimes.com/2011/06/10/business/global/10rates.html?partner=rss&emc=rss