Had a two-part question from one of our clients this week. Thought I would share the questions with you and ask for your thoughts.
Two things I have been trying to figure out: 1) We want our employees to wear company shirts. But how do I decide how many each receives? How can I require that they wear the shirt if they don’t receive a full weeks supply? What about replacement of the shirts (the guys get hot and dirty). Plus other issues come up. I keep hesitating to buy them because I don’t want to trip up on this.
Great question, I’m hoping those of you who require company shirts can pitch in and let us know your policy. More and more companies provide company apparel for their staff, and Deluxe offers company workshirts, pants, hats, but we’ll need advice from others in the field to answer this question.
2) How do I do a proper analysis to decide if we can afford additional office help? I know we need more office support but how do I know if we can afford it?
The best answer I can give you is that office salaries should range from 3% to 7% of the total sales of your company. If you use 4% as the magic number and your annual volume is about $850,000, then you can afford about $34,000 for office staff employees. That is all office staff employees, including any company owners. That might be 1/2 – 1 full time employee, with taxes and benefits.
Also check out the graph in the Markup & Profit book on page 43 (remodeling contractors) or page 58 (new home construction). Office staff counts as an employee on this chart, and I caution you to keep the total number employees in line with these graphs. If you have more employees than your volume of work can support, you will develop painful cash flow problems quickly. And it’s extremely painful for everyone when you have to let employees go.
Sometimes, time management and efficiency training is a better approach with existing staff before hiring additional people. You might want to consider that first.