Updated: Feb 25, 2022
Do you know who an incredible advocate for hard work was? Mary Poppins.
Bet you didn’t expect me to bring up that name of an old matriarch like Nanny from a 1960’s Walt Disney movie. But hey, she sure shined in the hard work department! Do you know what else is hard work? Running a business. If you don’t get it right, it can become a right royal pain in the finance department.
That catchy tune she sung…what was it? The one about sugar…oh that’s right!
“A spoonful of sugar helps the medicine go down.”
In my mind, the literal interpretation of this is that once you get the right recipe ingredient – it’s going to make your life a whole lot easier.
So, a spoonful of sugar huh? Lets break down what might go into this spoonfull of monetary goodness.
1. Employee Costs
The typical hospo model follows the 30,30,30,10 rule of thumb. 30% employee costs, 30% fixed costs, 30% cost of goods sold, and 10% profit. Employee costs are the most controllable costs out those I have just listed. Get these right and you’ll be chugging along just nicely. With the right tools and technology managing employee costs is like riding a bicycle.
Your revenue should always be tracked directly against your employee costs. Seeing how the two track against each other gives you a much more accurate reflection of what you’re taking in at the end of the day. With a drop of revenue and a pinch of cost, you’ll be at your financial goal in only a matter of time.
3. Additional Staff or Employee Related Costs
These are comprised of different things depending on which country of which we are speaking. These cover things such as holiday entitlements, medical insurances, superannuations etc. The important part is to make sure you account for these costs each week to ensure when it comes to the end of the financial year everything matches up and all figures are succinct.
Get this recipe right to reap all the rewards you’ve dreamed of.
And who doesn’t love rewards…