When you think of your business’ bottom line, do you consider the impact your employees can make on it? Employees affect your bottom line, not just from having to pay wages, but also a number of factors that can ultimately make or break your business. As your business grows, it is important to consider the worth of your employees to the company.
Let us assume that an employee comes in contact with about 5 new customers a week that will spend about $100 on your products throughout a 12 month period. If we multiply the number of customers by roughly 50 weeks (excluding holidays), that means each employee has worked with 250 new customers. Retaining these relationships with customers can potentially bring in $25,000 of gross revenue from each employee. Are your employees living up to their potential? If not, it may be time to restructure.
An employee that is developed properly for the company can reach its full potential and contribute to the business’ bottom line, so it can be well worth the financial and psychological investment towards them. Financial investment is usually understood as the time it takes an employee or business owner to find a suitable candidate, train them to their fullest and make sure they are conducting the trade of the business correctly and efficiently. Psychological investment can be a bit less forward, but refers to the idea in how they are treated, in particularly, management. Most people who leave jobs are not leaving the company (they could believe in the business’ mission whole-heartedly), but they are choosing to leave their boss. If an employee feels they are not needed or cannot take the daily stressors of a management team that they feel is incompetent, they may begin looking elsewhere for work.
Many businesses, especially small businesses, are concerned about the idea of training employees their trade secrets so they can go off and work elsewhere. To answer this with a question, would you rather have an employee work for you that has no idea what they are doing? Or one that knows your business in and out? The fact of the matter is, if an employee can produce what is expected of them, they cannot make your business money. Not only would you have an employee on your payroll that is costing you to occupy a desk, this employee could actually make you lose money by giving insufficient information to customers.
Hire the best employees and train them to their highest potential – your bottom line will thank you. At Padgett Payroll Services®, we want to help businesses in their financial success. If you have ever been interested in outsourcing your payroll or have any questions about it, contact us today!
Do you have the support you need to manage your small business bookkeeping?
Contact us to schedule an appointment to speak with a local small business advisor.