well my daughter yanked out my ethernet cable and saved you all from having to scan over a 1000 word rant that started with the perceived self-value of the American worker and ended somewhere near Obamacare.
There was one factual nugget in there though that I feel is worth retyping.
Deciding on an employee's wage should be a simple matter of Arithmetic.
Decide on a sales forecast for the upcoming year. Decide on your target labor percentage. Then figure out how to divide up the money that you think you will have for labor. Something like this:
$100,000 in sales (for simplicity's sake)
$20,000 in labor (20% labor, a benchmark for owner operators that don't take a set salary)
2080 (40 hours per week at 52 weeks a year)
$20,000 divided by 2080 is $9.62.
$9.62 That should be your AVERAGE wage for one full time equivalent employee.
Let's say you have two employees that work 20 hours per week each. If one makes $11 an hour then the other one cannot be paid more than $8.24
If you are paying more than that then you are over budget. You will have to: do more in sales, get the same productivity in less hours or make less profit.
FYI if you send your helper home and clean the buckets yourself, you are not actually saving labor. You are paying yourself for doing their job. There is nothing wrong with that if you want to pull more revenue from your business in the short term (I am doing this ALOT right now), but it is not a long term solution to high labor costs.
p.s. your labor budget MUST INCLUDE payroll taxes, income tax withheld and/or paid by you, workman's comp insurance and any other expense involved in employing people in order to be true
There was one factual nugget in there though that I feel is worth retyping.
Deciding on an employee's wage should be a simple matter of Arithmetic.
Decide on a sales forecast for the upcoming year. Decide on your target labor percentage. Then figure out how to divide up the money that you think you will have for labor. Something like this:
$100,000 in sales (for simplicity's sake)
$20,000 in labor (20% labor, a benchmark for owner operators that don't take a set salary)
2080 (40 hours per week at 52 weeks a year)
$20,000 divided by 2080 is $9.62.
$9.62 That should be your AVERAGE wage for one full time equivalent employee.
Let's say you have two employees that work 20 hours per week each. If one makes $11 an hour then the other one cannot be paid more than $8.24
If you are paying more than that then you are over budget. You will have to: do more in sales, get the same productivity in less hours or make less profit.
FYI if you send your helper home and clean the buckets yourself, you are not actually saving labor. You are paying yourself for doing their job. There is nothing wrong with that if you want to pull more revenue from your business in the short term (I am doing this ALOT right now), but it is not a long term solution to high labor costs.
p.s. your labor budget MUST INCLUDE payroll taxes, income tax withheld and/or paid by you, workman's comp insurance and any other expense involved in employing people in order to be true