What do YOU cost

Everybody working in and for a business, even its owner, is a cost.

Most of all time is money. It continues to amaze me though how many businesses especially manufacturing, engineering or other technical businesses seem reluctant or even unaware of how they go about calculating the cost of actually running or operating their business on a daily or hourly basis. This is absolutely key if you are going to maintain financial control at worst, and at best, make a profit and know what sort of profit to expect. What ever you come up with must also meet with your customer’s expectations and be competitive and if its not, it’s back to the drawing board. Most forecasts and financial projections I have seen or read fail to actually quantify how they arrive at any of the figures they are using except for some junk they borrowed from a so called market expert that isn’t in the business that he’s supposed to be an expert commenting on (but that’s another post of its own). This is especially true when it comes to the cost of people and their efficiency.

For example, in many cases the business owner would probably assume that he or she is 100% efficient, when the reality is typically far from the truth. Most owners are doing so many different jobs that the actual revenue generating work forms only a small percentage of their time. The results are a low efficiency.

Knowing what your business costs to run each day is important, but knowing how it makes use of that day is equally important and can have a drastic effect on costs and profitability,

In fact my team and I have developed a number of spreadsheets capable of calculating hourly rates and what people should be charging to make a certain percentage of profit given any size of team.

If you interested just get in touch and I will try and get it uploaded to the site.