23 Jun Business Alchemy 101 Lesson 20–Sales per Employee (Part One)
If you were in a little rowboat with a leak in it, you would be quite happy to have a bucket. The most pressing question you may have would be how many times you had to fill that bucket in order to keep your boat from sinking.
This scenario relates to the Sales per Employee ratio. Either because the business owner is quite wise and realizes and plans for bringing on help, or because the business owner is sinking in the water filled boat and screams for anyone to come help, businesses bring on employees as the workload expands.
Hiring new employees is like adding buckets and hands to help bail out the boat. The important point is to make sure that you are not bringing on too many buckets.
A good way to determine if the number of employees you have is appropriate for your business is to use the Sales per Employee ratio. By using this ratio, you can make sure that your workforce increases with your sales so that you do not end up with too many buckets bailing in the boat and not enough waterr to go around.
I will go over the equation in my next post.
Your Business THRIVES on a Solid FOUNDATION!!!