Hi again my fellow business owners,
OK, so you have read my first 2 tips and have forecasts and stock management under control. What next? If you have or are thinking about staff, then this is for you.
You may be thinking about hiring staff but are unsure if you can afford it? Or are you wondering how much your current staff are actually making you?
What I want to do is help your business cash flow problems by showing you how to identify the true cost of staff to your business. In my experience many business owners don’t budget for the true cost of an employee and are surprised by hidden costs that surface down the track.
For example, I have seen business owners end up owing sizeable amounts of superannuation for employees that they had wrongly believed were sub-contractors….
You don’t want any surprises, so put a figure on the true costs of an employee by considering at least all of the following:
- Costs of acquisition (recruitment, ads, interviewing)
- Onboarding costs (training, supervision, uniforms)
- Employment contracts
- Working hours (casual, part time, full time)
- Policies & procedure documentation
- Withholding taxes
- Superannuation
- Bonuses
- Leave entitlements
- Insurances
- Equipment (computers, tools, vehicles, phones etc)
- Working space
- Management (how are you going to monitor their productivity? How long will it take?)
This is by no means an exhaustive list! There are a lot of pitfalls to look out for – the actual cost of an employee is much more than the wage you pay them.
And the list doesn’t take into account that employees are (almost) never as efficient as the business owners in their work.
It’s a lot to think about. I’m here to make sure you’re on the right track with it, so feel free to reach out & give me a call or email.
Mick
07 5646 4050
P.S. I cover this & 7 other key tips in my free Small Business Guide “How to Eliminate Your Small Business Cash Flow Gaps for Good”. You can download it here: https://www.ignitionaccountants.com.au/
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