How Much Do I Make?
2. April 2009 by The Original Bulldog - Bob Griffin.
There was a time when I thought like an employee. Mostly because I was one and that was all the focus I had in business. I couldn’t figure out why sales were good, but my paycheck was still small. Does this sound like some of your employees?
The part that I was ignorant about was the cost of being in business. Even though sales were higher than last year and things were looking good, the cost of being in business was going up each year and the sales increases just kept us in business.
How many of your employees really understand how much is left after paying the bills? If you are hiding the numbers from your employees, you may be creating a rift between you and your team. A rift that can sink your business.
A great exercise is to have a meeting with your entire team and ask them how much they think you earn. (It is not as dangerous as it sounds). The numbers they call out will be staggering. More than one person will say “millions” and mean it. They more than likely have never been an owner of a business and will not know the true costs you have to pay to be your own boss.
Now, let’s get them to see the big picture. This is going to require that you have the actual cost of business per week ready. Averages are alright to use.
Have a large sheet of paper or a dry erase board to write on. Ask them if they know sales were for last week. (If they do, it gives you a clue as to how closely they watch your business) Write the number at the top of the paper. Now ask them how much they think the utility bills for the store are per week. Write the real number under the sales. Do the same with the weekly cost of insurance, payroll, loans, CPA costs, fees, product costs, etc.
Once you have the costs on the paper under the sales subtract the costs from the sales and write the number at the bottom. That is what is left to run the business for the next week and some left for you.
This is the moment when most of your employees will get it and understand how much you do just to be an owner. Some will shrug and not get it and the few remaining won’t get it at all. For the majority of employees who get it and can see the price you pay, you now have allies who can help you move the sales forward and can build a stronger business WITH you.
Simple actions can bring big rewards and an exercise like this is a goldmine for you. Try it soon. Let me know how it worked.