Where, nevertheless, is the critical boundary of wage costs, which is not recommended to be crossed over? If you do not have a ready answer, do not be discouraged, for you are not alone. I asked this question to many entrepreneurs, economists and “personnel managers” and at best I received the answer that the company’s expenses on the salaries of all personnel should not exceed …
I will not voice the answers, because “some in the forest, some for firewood.” Firstly, there is no common understanding of which indicator to use in calculations. Someone considers “from revenue”, someone “from cost”, and someone “from profit”. Secondly, most entrepreneurs accept workers and accordingly pay wages based on needs (in their opinion), and not business opportunities.
In practice, it looks something like this. I have (the entrepreneur thinks) so many cars, machine tools, and other assets, so I need to hire so many people of such and such professions. I also need an accountant (lawyer, marketer, advertiser, etc.), because without them this, this and that will not be done. Yes, I completely forgot – I need a secretary, otherwise the business will not look solid. Continue reading