Suppose I have studied for years to become a pastry chef. I set up my own bakery, investing my time, energy, and labour into procuring equipment and building up a reputation as a delicious place to eat. I run the entire operation myself as the sole worker. Eventually, after years of turmoil, word of my exceptional pastries spreads and my bakery becomes the number one spot in town. Soon there’s a line up around the block, long enough that I have to turn away customers on the regular.
Not wanting to have to send people home hungry, I decide that having someone to wash my dishes and somebody to tend to the counter would buy me enough time to focus on the main reason people come to my shop: my delicious pastries.
I do, however, have an issue. I worked really hard to build my bakery up to where it is today, and don’t want to have to give up ownership to the two people I want to bring onboard. They didn’t put in any effort into building up my bakery, so why should they have an equal democratic say over how it’s run?
Is there a way I can bring on help without having to give away control of my buisness?
Furthermore, what’s to stop the two new workers from democratically voting me out of the operation, keeping the store, name, brand, and equipment for themselves?
We could try to math it. Say you invested $1m into the whole thing. Now you’re doing great and bringing in $1m/yr, but you’re turning people away. In order to make more money you need to hire people. So you hire those 2 you mentioned. You pay them each $100k/yr after benefits and insurance and whatnot. They in turn allow the business to make $1.5m/yr or $300k “extra” after you pay them. You can think of that $300k “extra” as wealth they are creating and then “investing” back into the company. After 4 years they will have “invested” just as much into the company as you ever did, and should probably have an equal say in the decisions, and probably start getting an equal share of the profits.