As the business owner you put in a bigger effort into your business than your employees, work longer hours, the key sales person, the ideas generator and take on all the risks and stress that go along with owning a business. But it is not uncommon to see the business owner earning less than the employees, even after added back the fringe benefits. This is especially true when you consider your per hour rate.
Here are my top five focus areas for small business with employees:
- Are your employees adding self-sufficient value: You are probably the best employee in your business! if your time is taken away from ‘doing’ and more time on reviewing, fixing or remediating issues, it might be time to review the staff or your business structure.
- Plan & budget ahead. Track your bottom line at least quarterly to make sure you are not working for nothing.
- Calculate the true cost of your employees: super, holiday pay, penalty rates, workers comp etc
- Do you have enough quality work to keep you employees busy: Understand the productive hours per employee.
- Less is sometimes more: Were you making more as a sole trader? more profitable with two staff than six? are you now chasing low value opportunities to keep the staff busy? sometimes it’s better to scale-back on your overheads.
Need an outsider’s opinion or some help getting your business back on track? Call us at LJC Accounting – we’re not just a tax agent.