Employees, Fixed Costs

Good productive employees are, in the long run, your cheapest expense. They will increase your 'Sales' and 'Net Profits', but will only increase your 'Wage' figure slightly and gradually. Your other expenses will remain constant and rather fixed, or perhaps decline slightly.

When you hire someone, don't expect immediate results, your 'Sales' figure may dip slightly for several months, then level off, and finally equal or surpass your past 'Sales' figure. Everyone has a different personality, and your clientele changes dramatically or slightly with every new employee. Do not interfere with your employees when they are working. If there are customers that loved your previous employee, they are automatically, outwardly hostile to your new employee. Only your employee knows what is tolerable or intolerable to them. When you are not serving a customer, do not interfere with the person who is. The person who is serving the customer is LAW. No one wants an unfeeling robot, nor a wimp working for them. If that's what you demand, you will have employees who don't care about you or your business, and in the long run, you will destroy yourself and your business.

You may walk in one day and every customer is unfamiliar to you. Don't be distressed, your new employee has a different personality from your last one, and cultivates, consciously or unconsciously, a clientele that is more agreeable for them. If, at the end of 6 months, your profits aren't comparable or above your profits before, try again.

When your fixed costs escalate, you have to change your business format or raise prices. Otherwise, you will be losing money. I am referring particularly to items like Pest Control, Trash Collection, Postage, Licenses, Repairs, Utilities, Laundry, Supplies, Insurance, Taxes, Cost of Goods, and perhaps Rent. These cost you must pass on to your clientele in some way. One easy is to reduce services, by pouring less liquor, buying cheaper beer, buying cheaper products. Another way is to work more yourself, cut employee hours, but which can be counterproductive.

Increasing Advertising costs to make more potential customers aware of your business is a safe bet. By serving more people, you can afford to buy in volume and sell at a lower cost. Your employees can help by compiling a list of what your old and new customers ask for. If a customer can get something at your place that they can't get for another 5 miles, due to the price of gas, you have a new customer. Do not expect immediate results, everything and everyone need 6 months for you to be able to evaluate them properly, and your 'Sales' figure will do that for you. If it increases, whether or not you like an employee personally, you have succeeded. Personalities have no place in business. Your profit figure may dip slightly for several months, then level off, then equal or surpass your previous profit figure.