For years now, I have had thoughts about a new (or at least new to me) business model focusing on "team" not "greed".  Nothing but greed seems to be taking over many businesses today, making them self-serving without care for people inside or outside their companies.  It appears their only goal is to make ever-increasing profits lining the pockets of the few at the top or their investors beyond what they will ever be able to spend.  I personally feel that businesses driven by greed are nothing but parasites on our economy.

The basis for my business model consists of four primary tenets:

Shared Profits
Capped Salaries
Equal Pay
Forced Growth

From this point on, my business model will be referred to as "SCEF".

The four tenets might seem a bit scary at first glance, but for many it will get far scarier as we go.  The focus the SCEF business model is to build a business providing all employees a decent equal living, not only management, but all those involved who actually make up the business.  Everyone benefits from the work as a team, not as an individual climbing some corporate ladder, often leaving positions they best fit, only to obtain higher paid positions.

Shared Profits - Team

The term "Team" is the golden word in the SCEF business model.  I remember back in grade school, it seemed like teams were the focus of everything. Even with competitions, they usually consisted of teams and we would pool our skills together to help those not as skilled or knowledgeable that the "team" may prevail.

With "team" as the focus, we need to change our thinking from self-oriented to ways that help each other.  The first part of the model is "Shared Profits".  By sharing the profits with everyone involved in the business endeavor, all are encouraged to give their best, not just punch a time clock as is common in much of the workforce.   There will be so called "Dead Wood" in about any business and it is the same under SCEF, you will have to keep an eye out and eliminate those that do not live up to their responsibility.  With shared profits however, it makes it more important for everyone to notice the dead wood and deal with it as it affects the whole.

Capped Salaries

The next part of the model is to cap all salaries.  In my mind, there is a point where people cross over from a level of reasonable luxury, to pure waste or greed.  I know from personal experience that as you make more money, you simply find ways to spend more.  Before you know it, you are wasting more money than you ever thought you needed to live.  This waste comes at a cost and that cost is someone else's need.  What does it really cost for your needs to "Exist"?  At what level does a living of luxury begin, where you can fulfill your "desires"?

At of the time of this writing, I believe a household can easily "exist" on a single income of $50,000 per year.  This is a point where a family can have a decent roof over their heads, food on the table, reasonable transportation and clothing on their backs along with some left over for entertainment or modest desires.   Some may think this figure is peanuts while others only dream of earning this amount and that is a prime example of how far apart the mindset of "wealth" differs from those that have and those that have not.

So, what salary provides for "luxury"?  For me, this value is between $50,000 and $120,000 per year.  I feel, as of this writing, anything above $120,000 per year is plain excess.  If you cannot fulfill most of your "wants" on $120,000 household income per year, then you might start examining your desires.  Of course, many may want mansions in multiple places around the globe and spend the day lounging around the pool waiting for the next meal or traveling to every place on earth and never lifting a finger again for themselves, but is that what life is all about?  I do not think so!  Where are the accomplishments, where are the goals, where is the self worth?

Under my value of finances, I believe a person can live a decent family life easily on $50,000 per year and live in luxury at $120,000.  Thus in my SCEF model, I would make starting salaries at $50,000 that would increase up to $120,000 per year at which time they would be capped.

The only exception in to the payment levels, is the owner of the business who receives full share level from day one and will retain that full share level as long as the company exists regardless if retired or not.

Of course, since this is a profit sharing business, the actual salary may fluctuate depending on the profitability of the company.  If profits drop low enough, everyone may be paid less than the $50,000 per year, but that may be a sign the company is on the wrong track or lost its market. It would make sense however, to have a payback model in place to make up lost salaries below their scheduled levels as the company regains profitability.  If however, the company never regains profitability, everyone would lose that back pay.

Equal Pay

Now, here is a scary one for many!  Yes, I believe an equal pay system will benefit any business and is second only to salary caps at controlling greed in a company.  When I say equal pay, I mean at all levels, from the owner all the way to the janitorial staff.  Everyone to receive equal pay based on the time with the company, not on their position.

We want to have a "Team" but we turn around and value each person or role individually, thus making the team unbalanced and giving place to possible problems.  By providing equal pay for all employees, we place everyone "into" the team and for the team they all work.

The only negative point for this structure are those that value "themselves" more highly and may tend to think others are getting a free ride on their coattails.  That is not the case, if it only took those that consider themselves as valuable to keep the business running, the others would not even be needed and thus would not be there.  The fact that the others are there proves they are required and are just as important.

Since every position in the company receives the same pay, people can focus on the job that they do well and not push themselves into positions they may not fit only to obtain a higher salary.  Climbing the old corporate ladder does not exist in this model, everyone is encouraged to perform the role at which they excel.

People in a SCEF modeled business must all agree that the whole is more valuable than individual and everyone is part of the team regardless of their role.  The only value a person has is based on the amount of effort they put into their work.  I have seen janitorial staff work ten times harder than some management staff, but they are worlds apart, not balanced by their actual efforts.  The key here is "Everyone Is Valuable"!

Forced Growth

Now this sounds like a painful topic, but really, it is a side effect of the other three tenets of the SCEF model.  When you have a business that operates under a shared profit model having capped salaries, you are bound to have excess profits occasionally.  What do we do with the excess?

When you have business profit excesses greater than double the salary of an employee and cash reserves are full for emergencies, it is time evaluate if there is a need for new employee(s).  I have not known a business that cannot use more workers or cannot expand.  The business uses these overages to its own benefit by expansion, such as hiring more employees giving them the opportunity to be part.

This is what I call forced growth.  The extra profits the business generates do not funnel off into some executive's pocket, they are turned into expansion, which if correctly handled, will end up generating even more profits, making the company stronger and adding stability.

Retirement

Many companies have limited retirement available and workers have to take retirement into their own hands.  Under the SCEF model, I believe retirement should be earned and allow the person to live their later years in same style as any employee.  For quite some time now, I have pondered different thoughts about handling retirement.  A person that has put their years into helping build a company should continue to receive reward for their work. 

Currently, I feel that a person should earn a year of retirement for every two years worked.  This retirement may be taken at any time during their life (however it must be after employment has ended).  The retirement share amount reflects the share level at the time earned.  Your first retirement year is worth the minimum share level (in this document, that would be $50,000), while the next year of retirement would be at the next level, etc.

In addition, retirement pay is not lost even in the event of death as long as the business continues to be profitable.  If the worker dies, the retirement can transfer only a family relative, not allowed to transfer to an outside entity.

Every employee who works for the company continuously for twenty-five years or more, shall receive the same benefits as the owner after reaching the age of retirement, in that they shall receive a full salary share for as long as the company continues to exist.  This full share shall replace their retirement years earned but will be under the same transfer limitation in that the full share cannot transfer to anyone outside the family.

Note: the employee will forfeit their retirement funding should they be fired from the business.  However, if "laid off", the employee would retain their retirement.

Company Sell Off

If the company happens to be sold, the monies received would be divided equally, based on years worked, level of pay and retirement years built up.  The owner of the business along with any twenty-five year members, would have the same amount of retirement years as the employee with the highest amount of pending retirement.

Conclusion

This business model is what I see as being fair to both the business and the employees.  It should foster growth in a company as well as loyalty and dedication.  Only time will tell!

Everyone in the U.S.A. could live very well if all businesses used SCEF business model!

If we take the Gross Domestic Product of $11 trillion and divide that by the number of households (only could find 2000 census figures) of 115, 000 household units, we end up with almost $95,000 per year.  This takes us almost to my target point of $120,000 per year.  While I know these figures can skew by different factors, it still puts us in the ballpark if all businesses were to use this method.

Ask me what the minimum wage in this country (U.S.A.) ought to be and I will tell you $40,000-$50,000 per year! 

SCEF Business Model in Action

I have faith in the SCEF business model and fully believe that if you empower people giving them the opportunity to be part of a true team business and provide a decent living to take care of their family, they will give you 110% of their effort.  In addition to effort, I believe they will also give your company loyalty.

Over the coming year, my family will be putting this business model into action with our new business called OurLocalArea (OurLocalArea.com).  While it will take some time before we can afford to hire many employees, it is our goal, eventually to have at least 1,000 employees all making the same salary and living well!