Taking on office staff
We look at financial considerations when you take on an admin person
Should I take on an admin person to free up my time for sales?
This is the difficult decision growing businesses have to make. Should I bring in an admin person, and if so, what do I pay them? What sales do you need to bring in to cover their costs? Let's look at an example. Say you employ an admin person at a salary of £20k and you provide a laptop and desk at the office. This could produce the following scenario:
This calculation often shocks business owners! Clearly the figure is reduced if they are home based and have fewer additional costs.
To look at the minimum sales level required, you need to look at the costs divided by the gross profit margin, as there are associated costs with every sale. For example, if your gross profit margin is 25%, minimum sales required per annum is £107,588,. However if your gross profit margin is lower, say nearer 15%, the figure rises to £179,313.
Overall, it is often a surprise how much extra sales you need to bring in!
We can model these scenarios in your cashflow tool, such as Fluidly. Ask us if you'd like help with this.