How to Increase Profits by Hiring
Who 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.
If 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:
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.