Mining for Gold

I watch a reality series called Yukon Gold regularly.  It’s about gold miners in the Yukon who strip tons of earth in search of ounces of gold.  There’s a metaphor there about the amount of muck everyday people have to wade through to get a tiny amount of gold but that’s really not what I came to write abut.

No, what struck me while watching the current season was the differing amounts of gold each operation needed to breakeven.  Some required a half ounce of gold for every hour they operated, some an ounce.  The largest operator wanted 3 ounces of gold to make him happy.  They are all miners in the same geographic region (sort-of, the Yukon is HUGE); and yet they each had so different requirements.

It’s true for any business really. As we grow, my ‘breakeven’ amount for each day has shifted too.  What I need to keep the lights on is very different from when we started in 2007.  What any of our competitors need is going to be different.  There’s a myriad number of reasons for this – from different leasing rates to different personnel, higher fixed or variable cost, more or less efficient operations, it all varies the amount of gold we need to find in the pan at the end of the day.

The other thing that isn’t accounted for is what each group would consider ‘success’. One group’s a young family with 2 children whose entire livelihood is based off their operation.  Another is a retired business owner who is chasing his dream.  Then we have the ‘professional’ crew with multiple diggers and trucks who are working on a completely different scale from everyone else.  Each group has a different goal amount, but those goal amounts also include the needs of their families or corporations.  It’s one thing if all you need is to breakeven because your ‘salary’ is what you are looking for.  It’s another when you are looking to generate a decent return of investment for your investors.

This difference is something most people who don’t run their own business don’t get.  What seems to be a ‘lot’ of money for one corporation might be nothing for another.  What end goals each group needs varies and often has nothing to do with any external objective of ‘fair’.