Hi, guys, I want to share with you today a nugget about figuring out how much you should pay staff. So stay tuned. I’ve talked with some clients recently who are uncertain about what they should pay new staff and concerned that they were going to be paying them too much. I know they did pay them well to get them, but hey, how much is too much?
Well, the key here, guys, is knowing your numbers. So you’ve got to understand how much gross profit a new staff member could potentially earn you. It’s pretty simple.
Say you have to make $250-$300 grand in sales, somewhere around there. And at a decent margin, that should be work out at $90-$100k gross profit. So here’s the thing: If you’re thinking, “Jeez, I need to pay them $30, $32 or whatever it is, and that’s a bit more than I’d like to.” Well, by paying them an extra couple bucks an hour, it’s only going to cost you a few grand, maybe 3 or 4 grand, but you’re actually going to make 90k extra in gross profit.
And if you don’t have that staff member, there’s one thing for certain: you’re not going to make that extra money because you’ve got to have more team members to make more profit.
So the key, guys, is if you’re thinking, “Am I paying too much?” or “What should I pay?” Know your numbers, work out the potential gross profit that extra team member could make, and then you can figure out how much you need to offer them to get them on board.
It’s pretty simple, so I hope that’s helpful, guys. If you’ve found this helpful, just share this with your mates on social sharing networks. Or jot down some notes or any questions you may have, and I’ll see if I can help you with those. Have a great day, and I’ll catch you next time.