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its all a balance of outgoings = profit?
ROCE return on capital invested.
im stuck - cant employ full time to help me labouring as i will be paying too much out , more advertising costs and basically will be creating a job for someone else but the customer will only just pay for 2 men on a 2 man job!
then im just getting and doing more work for the same income i have now.
i do a good spraying /chainsaw job specialised & then end up paying that out to save time on other basic jobs just to keep the ball rolling.
i hope it creates a good impression and keeps waiting times down so i get recommendations and more customers eventually.
How big are you now Shane? Maybe if you employ say 8+ full time and are profitable, you will need help. Otherwise you work, manage and employ good reliable staff.
Im smaller, I went from one member of staff last year to 3 this year. It was a massive stress keeping plenty of work coming in and keeping the mouths fed, not to mention the cash flow! When I look back on figures, yes im turning over more this year but i made more of a profit last year!
In the last two weeks 1 has left and the other got fired yesterday and its me and one fella, a huge weight has been lifted off my shoulders. Another stress is loads of work now!!
Anyway dont know how the above moan will help, i suppose just make sure your business can support another body.
Employing a manager needs careful financial consideration as normally that role would be considered a 100% overhead, so depends on how you recover his costs from your internal charging rate.
The more employees you have the easier it is for this financial calculation to stack up.
This would be different if he was 'targeted' to bring in business and/or paid on some form of bonus system.
In my situation, ~50% of my time is an overhead, recovered across all staff, the other 50% is revenue generating
Happy to discuss further in The Hub.
Shane murphy said:
"In my situation, ~50% of my time is an overhead, recovered across all staff, the other 50% is revenue generating"
This is a good point to make Gary (probably worthy of a thread on its own).
During my time running my business I fluctuated from from being in a full-time administrative/executive position to a varying degree of hands-on.
If anyone is working toward a full-time executive role (something I never really enjoyed) then it's worth considering, at an early stage, to treat yourself purely as an overhead.
Bear in mind though. If you are employing five people, for example, that you will have to recover your salary (plus costs) from these 5 staff and still make a profit.