How to Increase Profits by Hiring

by Mason James, on August 9, 2012 — 3 minute read.

Increase ProfitsWho doesn’t want to increase profits by 50 percent?

I will be the first to tell you, I’m not the next big entrepreneur out there, and if I knew half the things the big guys know, I’m sure I could increase profits by 300 percent. But sadly, I’m not, so 50 percent is what I’ll settle for… for now. 😉

However, I’m sure any business owner would love to figure out how I increased our profits by 50 percent. First let me ask you a question:

How many jobs do you do for you business?

Are you the CEO, marketer, accountant, administrator, webmaster, and everything else in the business? If so, you’re losing money at an alarming rate. You may ask yourself:

How am I losing money if I’m not spending money?

Well, consider how much you cost per hour? Do you charge $50, $75, $100, or more hourly?

This is what you’re worth for what you’re good at. If you’re good at being a CEO or marketer, then put your time towards that. Don’t spend $100 per hour by doing administrative work, like filing checks and picking up phone calls. You can pay someone $10 per hour for that instead. This will free up time for you to do what you’re good at… like getting more customers.

Let’s break this down.

CalculatorIf you work 40 hours a week, this means you spend 2080 (40 hours x 52 weeks) hours per year working. Let’s take out 2 weeks for vacation (80 hours) and 1 week of sick days (40 hours). Now we have 1960 hours per year of work.

A realistic amount of time for administrative work is 10 percent of your time. This includes making sure bills are paid, paying yourself, filing papers and all that good stuff.

Ten percent of your yearly work is 196 hours. If you’re being paid $100 per hour, this amounts to $19,600 of your time spent.

If we compare that to hiring out an administrative assistant for $10 per hour, you would only spend $1,960 and get back 196 hours to do the things you’re good at. That’s a savings of $17,640!

Let’s do the same thing with a webmaster

We spend about five hours a month on a site making sure it’s running properly and running at peek performance and charge $150 per month for it. Yearly, this comes out to be $1,800.

Let’s compare this to your time, if you’re doing the tasks and it takes you an equal amount of time. You will spend 60 hours a year on webmaster work which comes out to $6,000. So hiring a webmaster will save you $4,200.

On those two jobs alone, you would save a total of $21,840 per year. It gets even bigger if you keep going!

Saving Money is Great, But There is More!

When you’re able to free up more time for yourself, you can increase your profits more. As the business owner, you’re the number one selling force for your business. You are finding clients and getting them on board. With the two examples above, you have opened up 256 additional hours for you to get more clients.

Clients = Money

With that additional time, at a 5 percent conversion rate, you just gained 12.8 new customers. To put this in perspective:

MoneyIf all those clients signed up on our LOWEST package, that would be an additional $23,040 per year.

This is a whopping $44,880 per year that we have earned back… just by hiring a few people to help us run our business.

So what about you? Are you losing money by doing all the jobs in your business? Or have you hired a few key people to help you out?

If you’re looking to hire a webmaster to save $4,200 per year (like the example in this article), get in touch with us today to talk about your needs.

4 Responses to “How to Increase Profits by Hiring”

January 10, 2013 at 9:23 pm, Kathlynn Northrup-Snyder said:

If you look at my site, you will note it needs a bit of updating although I get compliments on it all the time…

What I’m really looking for with wordpress options are developing a type of continuing education site similar to what mixergy.com and nursetim.com use with different focuses for the learner. I may want it to be a bit more robust, but one idea is to start where I’m at with what I can offer, then grow. So another quesiton is related to storage/archive ability for a larger program with more external visitors. Last, but not least, being able to award CE (as in the Nurse Tim site) is essential with a mix of folks either watching something for the first time then doing the CE or choosing to only watch/read. Would like to use videostreams, audio ppt and/or other uploaded educational elements. Not sure if there is a place for communication/discussions available? Thanks, looking forward to talking with you.

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June 30, 2013 at 10:12 am, Paul Barthmaier said:

Hi Kathlynn,

We’re very happy to help you with your site. Please contact us at https://www.valet.io/contact-us/.

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March 04, 2013 at 10:36 pm, Jerry Crockford said:

That is a great article.

We have a team of 8, (Graphic design, web design and copywriters) and were just talking about the challenge of managing tasks, jobs, sales and everything else.

One of the troops found this article while looking for ideas, and it really nails it. In my role, I am BEST used to find new clients and work at building relationships with new clients. But I spend so much time doing other work.

Part of the problem is delegating and letting go — but the MAIN issue is recognising the need to hire additional people to “do stuff” so I can get on with “doing stuff”.

Next step: Work out detailed job specs!

Great article. Thanks!

Jerry

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March 04, 2013 at 10:59 pm, Eric Hoanshelt said:

Thanks Jerry!

It takes some time to understand this but it helps alot in the long run!

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