I had someone approch me for a job with just 3 years experience. he is a helper in a one man shop. he does some light hand lettering (Suport mostly patterns, prep and fill in work) and some vinyl graphics experience.
most people i have hired, have had no expereince. I have procedures lined out, training videos and can have a person with good work ethic up and running in 60 days. my trouble is keeping them for more than 6 month to a year. I have a 90 day probation period and expectation of being to work on time, a clean work space, knowledge of the tools and materials, work independantly and minimal waste in that time period.
He came to me and is asking for alot, paywise and my question is what are you paying your employees. What are your expectations for them. do you give raises based on time or performance. do you give insentives. what would a pay rate for experience begin at. somone with to much expereince might bail and start his own shop, do you make them sign a "snapping" waiver or a no-compete in a certain mile radius after they leave you?
I generally start no experienced people at $8-$9 hour and a raise comes after the 90 days. the people i have been hiring have been in there mid to late 20's a couple that have been in there mid 30's.
My company is growing fast and i will need several employees over the next year, and pay always seems to be and struggle. I am looking for some leadership and am willing to pay for loyalty and hard work.
Thanks in advance.
Lovelady
Posted by Dave Grundy (Member # 103) on :
Chris..$8-9 seems a bit low to me..but different locations equal different wage scales.
What interests me is why employees leave after 6 months or so?
Do they not like the work? Do they not like the wages? Are you that bad a person to work for? (joking) Do they find a more fulfilling job? Do they decide that they can start up their own shop?
Just wondering
Posted by old paint (Member # 549) on :
CHRIS...dave is looking for a job.....))))))))))))))))))))))))))))))
Posted by Russ McMullin (Member # 5617) on :
I don't think the years of experience matter as much as what the person can actually do. If they can demonstrate a good attitude and work ethic, and if they have skills you value, you should try to pay them enough to keep them around.
I think it's also important to outline when raises are given, and what it takes to get one. Give employees a goal to work for, and pay up when they achieve it. It's hard for an employee to stay excited about the growth and success of a company if they work hard, but never see a bonus or a raise.
Posted by W. R. Pickett (Member # 3842) on :
...An experienced (and reliable) helper should get NO LESS than $15 per hour. Start them out at that and give them a one dollar raise every month. The right person should (eventually) be getting around $30 per hour, or appx. 45k a year if you want to KEEP 'em. If they are skilled and smart, they can easily make much more on their own. Fifteen bucks an hour is CHEAP for the kind of person you need...
...Whatever terms YOU establish w. the employee, be sure that you stick to if you want to keep them around. Years ago I went with a shop for those terms, but got the promised monthly raise only ONCE. I had been hired to be the DESIGNER, but was really only a sticker applier and shop sweeper instead. I wasted four and one half months working for that joker..
...It was not possible (for me) to remain supportive of a shop owner who doesn't keep their word. Employee loyalty must be paid for and well rewarded.
Posted by KARYN BUSH (Member # 1948) on :
$30 an hour for paid help??? that's more like $62,400 a year. i don't know any sign company that can pay that kind of salary for a helper! richmond, va must be rich.
Posted by W. R. Pickett (Member # 3842) on :
...I said "should" not does. The company I refered to was a big 'outdoor' and electric sign co. and the 45 was the figure that the owner 'threw out there' when he hired me. What I had hoped that I could do for them (as a designer) is worth much more than 45k.
Posted by Joey Madden (Member # 1192) on :
Karen, I worked in Richmond in the late 70's and there was lots of money there, todays Richmond economy is primarily driven by law, finance, and government with several notable legal and banking firms, as well as federal, state, and local governmental agencies, located in the downtown area. Richmond is one of twelve cities in the United States to be home to a Federal Reserve Bank. There are also nine Fortune 500, and thirteen Fortune 1000 companies.
I think in todays worker market whatever town or city the minimum wage is around $7. I think for starters $8 or $9 an hour would be an insult to any determined person with even a couple years experience, would you work for that kind of money? You normally can tell what a persons stance is after their first week if you yourself are on top of your business ethics.
Posted by KARYN BUSH (Member # 1948) on :
aaah gotcha. i personally have no problem paying someone $30/hr to help me out...but its only for a day here n there. hell i'd love to make $30/hr for being hired help...no business headaches, no overhead...just come in and do your job and leave. realistically that's probably all i make now anyway after i pay all the overhead.
i guess if i was in chris's position i'd have to crunch the numbers and see what the business could afford to pay. guessing, i would entertain figures from $15-17 to start and see what happens in 90 days.
Posted by Chris Lovelady (Member # 2540) on :
for starters i am not hireing a designer. that is what i do. i am not even trying to hire a shop manager to manage the multiple emplyees. that is what i do. $30 is absurd for hired labor. do you make $30 hour as the owner. would you pay an emplyee equal or more than you make emplyee are to learn from you not the ortherway around. My survey of local sign company, not even the long retained emplyoees 10+ years are not even close to making that much. I have to remind people that they are hired to make the company a profit not draw from that profit.
my question should have been more clear, it is to people who have multiple emplyees. who are retaining them for long term, or were do you find help with or with out experience, what are you basing there wages on.
Lovelady
Posted by Doug Fielder (Member # 803) on :
I feel one should pay what the person that works for them is worth! I started my apprenticeship 7 years ago and had a couple years experience under my belt with pinstriping, stickers, gold leaf and lettering; and I started at $14/hr. However, one can say that is pretty good until you take into effect days of NO WORK and Winter months of also NO WORK... That $14/hr is then lessened to $5/hr to make up for the time not working. I did that for a couple years, getting a job in the off season making whatever and then picking back up in the Spring. I moved to Vermont and was payed $10/hr and that quickly went up to $12/hr (which they thought was good...) and I had to struggle to make over $14/hr! I went after work to my OWN shop and charged $100/hr for striping and lettering and did lots of GOOD work that the day job couldn't handle. Last year April to early June I went back to NJ to help my Mentor who'd broken his ankle, and picked up his work and helped him out in any way I could! I was working 7 days a week 6-11 hours a day to catch him up and he just asked how much he owed me... Leaving me in control of how much I was making. I won't say how much I made, but it was pretty good! It held me for a couple months in San Francisco! Where I got a job in an Environmental Sign company starting at $18/hr. Now I am jobless in North Carolina. Go figure!
Posted by Jean Shimp (Member # 198) on :
Chris, I understand where you're coming from. In order for us to pull permits we HAVE TO have work comp insurance on all employees. I can only get this if I lease my employees. It cost me $14 per hour to lease someone who makes $10 per hour. At a cost of $14 per hour I figure they shoul be earning the company $35 - $40 for their billable time ( running about 75 - 80% of their total time on the clock). Sometimes that's a lot of money to pull in for sticking vinyl on signs by an inexperienced worker. Even though my shop rate is $88 per hour, based on my skill level, vinyl sign pricing seems to get lower around my neighborhood as digital printing is taking over many signs. I'm trying to figure out what direction to take the shop in.
Posted by Chris Lovelady (Member # 2540) on :
Doug you bring up a very interesting point. Loyalty to the company you are working for. loyalty, long term commitment. 14$-$18 verses 0
snapping or working under your own business licence, Liability insurance, workman's comp, sales tax, employement tax, equiptment expense, rent and overhead, vehicle insurane...ect...ect...i think if you look at those expenses. Do you really make 100$ Hr. or is that what you bill.
if you do not have those or part of them in place than, I think you need to rethink ethics in business. are you paying sales and income tax on your self, your income? do you have a business lic.?
thus come into discussion of shop rate. do you work out of your living space or you paying commercial rent. have you or do you hire help? what is your overhead....this is and should always be looked at frequently. Material change cost shoud we as sign shops!
here is another question. what is the market bareing in your area for let say a basic pair of magnetics? how much of that is labor, how much is that material, how much of that is overhead, how many of them can you or your employees make in an hour. then you have to ask your self ...am i charging enough. what percentage of that 15,18 30$ wage person making you in profit! profit is what keeps the doors open and hired help on the payroll. what about that guy down the street that is doing his work at what seems like cost.
thus back to the original question.
do you have multiple employees. how are retaining them for long term, or were do you find help with or with out experience, what are you basing there wages on.
come on guys and gals this is economic subject. not a personal opinon, but of one that askes what is your experance hiring help!
Lovelady
P.S. In my own defense I have to say that i have and do rewarded good hard work with bonses, lunches, filling the gas tank, and pay based on experiance and work ethic. the $8-$9 is NO experience and is starting pay. I do set goals and do reward acheivement. I am not an monster of a boss and am very easy to get along with.
Lovelady
[ July 15, 2007, 04:35 PM: Message edited by: Chris Lovelady ]
Posted by Doug Fielder (Member # 803) on :
Now this is getting complicated... If you think the person has some ability and promise, invest in them and they will be faithful almost always. How old are you? Are you going to be doing this for the next 30 years? A friendship and mentorship goes a long way I believe. I met my mentor at a sign show/letterhead meet, and he asked me how much I wanted to make and agreed. I worked hard in my apprenticeship and we developed trust. What skills do you want your person to have? Do you want someone that you can let go do a job that you could do, but have two jobs to do at the same time? Only you know how much you need to make in a day, then you evaluate how much good this new person will do for you. Can that person make their days worth in an hour or two? You seem to have a franchise which is a whole other ball of wax. I can't figure in everything like a big shop does, especially since I was the only one in mine.
Also, I was saying what I was doing on the side was to supplement what I WASN'T making at the sign shop. Can you survive, as an individual, on $10/hr? With rent to pay and car insurance to go to work, maybe a car payment, phone bill, food, clothing, student loan, utilities??? If you force someone to go work someplace else as well as for you, just to survive, they will leave the first chance something better comes along. I've done it! I couldn't survive on $14/hr.
Posted by Chris Lovelady (Member # 2540) on :
Doug,
Sorry, it was not my intention to complicate this.
quote: Also, I was saying what I was doing on the side was to supplement what I WASN'T making at the sign shop.
this is called conflict of interest.
original question.
do you have multiple employees. how are retaining them for long term, or were do you find help with or with out experience, what are you basing their wages on.
Lovelady
Posted by Doug Allan (Member # 2247) on :
Chris, I find this topic to be of great interest to me, because in the last 2 or 3 years I have made the conscious decision to move from one-man-show into the realms of becoming an employer.
3 years ago, my only help was my step daughter who put in about 15 hours a week. This was not much more official then a family member being asked to volunteer help with housework & being rewarded with an allowance.
After reading some business books, I decided I wanted to grow my business & learn how to do that properly, whatever it cost in terms of money to be legal, & in terms of sacrifices of my enjoyment in the one-man-show gig.
I heard countless people (many here in Letterville) say they grew big & longed for the good old days. Some said they wished they could go back, but felt they could not. Others did go back to working alone & said they wished they never made the mistake of growing bigger in the first place.
So far, I have no regrets. There are new problems that come with the territory, but in my experience, there are greater rewards. To a point there are also greater risks.
My first full time employee came at a point when I was entirely ready to take on the right person. Jon Aston of Marketing Partners, a merchant here, had been helping me as a consultant. I had a lot of fear associated with promising someone that they could count on me for a consistent 40 hours of pay, at any rate.
With Jon's help, I planned out my 2 person shop, before there were 2 people. I built another office, set up another workstation, & started marketing more aggressively, even though I had been working near capacity, with no shortage of work for years. I began assessing what new products or services I might like to take on & what new equipment I might be interested in. I postponed my desire to add a router & decided an inkjet printer would be a more immediate profit center that capitalized on my existing 2D design strengths, as well as easily fitting into my current shop environment. I had seen the equipment I wanted at the USSC show, & it sat there on top of my wish list.
Right before I even began advertising for an employee, a rare opportunity came up when a talented young man arrived on my doorstep with 3 years of experience & genuine passion for the sign industry. After one interview & about 6 hours of paid work as a sort of performance evaluation. I offered him a job. I told him I wanted him to have full time hours, but i didn't want to make a promise I couldn't keep, so I said I would guarantee him an average of 30 hours per week, and that there might be a fluctuation between anywhere from 20 to 40 hours based on our workload.
I leased him through an employment agency because I didn't want to have to learn all the many time sensitive responsibilities of payroll. His starting rate was $12.00 per hour. This is probably similar to $9/hr in many other parts of the country. I promised him a review after a 60 day probationary period.
The kid took off like a rocket & impressed the hell out of me in his existing sign making abilities, his apptitude for learning, his self motivation, attention to details of quality, efficiency, organization, & his general respect for me as an employer/co-worker.
His first raise was probably after 2 weeks. His second raise was probably no more then 6 weeks later. He received several $100 bonus's after exceptionally profitable jobs where his efficience contributed greatly to my increased profits. There were a few several hundred dollar bonus's as well over the next 18 months. He gave me about 12 months notice of his intention to return to his home town. He helped my greatly in my efforts to prepare for his absence, both in hands on training of an individual I hired before he left, in creation of training videos still available for my use, & in some shop renovations.
When he left I think he was making $16/hour
The guy who replaced him didn't work out & after 2 months of a great deal of my time invested in training, I let him go. For a guy who already gave up night, weekends, & holidays for this business... the next few months were in many ways the toughest ever. I had grown well beyond what I used to be able to do with only my step daughters help... but now that's all the help I had, yet I didn't want to backslide into turning out less work, or turning it out slower. I pushed hard to continue to provide the same customer experience including huge rush jobs for my biggest clients.
I finally got another qualified sign professional, and he also started at $12/hr. He is making $14.50 now, 90 days later. When he gets a vehicle, I promised another $ .50/hour, because I will benefit greatly from being able to send him on errands, and installations. He would also receive milage compensation.
The original employee plans to return, next spring so I am already trying to plan out the 3 full-timer environment so I am ready for that when it happens. I am sure I will pay him more the day he returns then the day he left, because as much as I don't think I took for granted what he was worth, having been through wasting time training the wrong guy, only to let him go... if my first employee is willing to work here again, I will make sure to pay him enough to be worth staying on for awhile.
Not sure if any of that is helpfull Chris, but figured I'd just run down the whole story. I also became an LLC 18 months ago, & after 9 years of doing my own books, I brought in a bookkeeper last year as well. I paid way more taxes then ever last year, but I also made way more money then ever. I worked crazy hours like always, but i did have more freedom in when I put in OT. For several days a week prior to having qualified full time help... I would feel like calling it a day, & as I cleaned my desk I would find something that simply could not wait & I would have to stay even later. Except for those few months with no full time help, I am usually able to go home when I want to. I enjoy 60-70 hour weeks... but it's nice to give in to being tired after 8 hours once in a while.
Posted by Todd Gill (Member # 2569) on :
Great story Doug...I enjoyed catching up on where things have been going in terms of your business.
Posted by Craig Sjoquist (Member # 4684) on :
I live in Florida ..home of screw your workers...lol think I'm kinding anyway I also went looking for a job with a sign shop and still looking ya might say, yes $8 per hour was all I could find ...not only that, had to know all the software programs from adobie & corel to flexi and others also they wanted plotter experance also other equipment plus good customer relations .. well since at the time I had almost 3 decades of hand sign work behind me and little software computer experance no go now with alot more software experance still no go besides if I designed a sold logo I would only get the $8 per hour lol lol not 50% of the price charged ... egad if I airbrush a t-shirt, cut hair, or other creative skilled work where the person is doing design etc 50% pay anyway even for semi skilled worker in just about any field ..beginer $10 per semi $15 skill $20 -$25 ... I work for a roofer as a helper for $25 per hour for the last couple yrs and started at $20 per till he realized that I worked hard safely and showed up never worked on a roof before but knows tools .....
13 folds
Posted by Russ McMullin (Member # 5617) on :
Chris, you started out your post with the story of a guy who wants to work for you. If you want to uncomplicate the question, give a clearer job description for that person and ask people how much they would pay him to start, and how much they would expect him to make as his skills improved.
quote:Originally posted by Chris Lovelady: this is called conflict of interest.
There are thousands of things a person could do on the side that wouldn't conflict with the interests of your business. In fact, anything that your shop doesn't market should be fair game in my opinion. My boss and I have an agreement: I don't do graphic design and vinyl sign work on the side (in our market area), but I am free to do things our shop doesn't concentrate on, like woodwork, illustration, glass gilding, painted boat lettering, etc.
I just read Doug's excellent post. I think his strategy is right on.
[ July 15, 2007, 09:31 PM: Message edited by: Russ McMullin ]
Posted by Doug Allan (Member # 2247) on :
Thanks Todd... most people who know me, know I like to talk, or write... but I also sometimes worry that nobody gives a damn & I'm wasting my breath... so even if some people wouldn't be interested, it's good to think others are.
When I re-read it, I noticed that I left out what many people know, which is that I did buy the inkjet, directly because my first full time employee gave me the confidence that I had the time to invest in learning it, & the potential for increased income (through extra manpower on previously existing product lines) to afford the payments if the new machine didn't begin paying for itself right away. As it turned out, the printer immediately became a source of far more income then my costs to aquire & run it.
Chris, forgive me for following one more brief tangen. The latest new outlook in my business future is that after 10 years leasing a unit at the same location, my lease will be up for renewal in 2 years. I've always renewed before I get too close to my lease expiration date, because I believe it puts me in a better negotiating position if I have plenty of time to make other arrangements if the landlord asks for an excessive rent increase. I decided that before I renew, it's time to explore the option of buying, or putting up my own building. It's a scary thought, but all the best business decisions I've made have been scary when I first considered them, so that's what I'm just starting to look into this summer.
Going back to the topic at hand, I don't think this would be a realistic consideration if I stayed a one man show.
Posted by Ray Rheaume (Member # 3794) on :
Chris,
I think the term for the kind of person you're seeking is known as a "company man", someone who, when hired, is fully dedicated not only to his job, but the company's future success as well.
I considered myself a "company man" when I started working at a tshirt shop after high school. I readily worked overtime to make sure jobs were on time, often came in early to prep jobs, seldom took time off for personal reasons and eventually worked my way up both in seniority and position. The rewards were there...good medical benefits, generous pay increases, vacation time, etc.
The original owner of that shop not only treated us well business wise, but personally. When big decisions were made, everyone was called in and no one was left out of the process. He was the quarterback, but knew it would always be in everyone's best interest to be a team. The company flourished for years.
When the ownership changed and the incentives to stay began to dwindle, I considered leaving, not because I wasn't paid well, but simply because the company had no further goals at that time. I felt it could grow further but was becoming stagnant. That, and a shift in benefits sealed the decision after 8 years.
"Company men" don't exist in nature. They are created by employers who turn a "job" into a good career and reward their efforts.
I only wish that my old boss, Sonny, were still with us today. If that were the case and he asked me today to drop it all and come to work for him, I would do so without hesitation even after 25 years. His business ethic was simple... He always believed that it was better for everyone when he asked us to work WITH him, not just FOR him.
Should I ever expand and hire employees down the road, I hope I can live up to his standard...WITH them.
Rapid
Posted by George Perkins (Member # 156) on :
quote:Originally posted by Craig Sjoquist: I live in Florida ..home of screw your workers...lol think I'm kinding anyway I also went looking for a job with a sign shop and still looking ya might say, yes $8 per hour was all I could find ...not only that, had to know all the software programs from adobie & corel to flexi and others also they wanted plotter experance also other equipment plus good customer relations .. well since at the time I had almost 3 decades of hand sign work behind me and little software computer experance no go now with alot more software experance still no go besides if I designed a sold logo I would only get the $8 per hour lol lol not 50% of the price charged ... egad if I airbrush a t-shirt, cut hair, or other creative skilled work where the person is doing design etc 50% pay anyway even for semi skilled worker in just about any field ..beginer $10 per semi $15 skill $20 -$25 ... I work for a roofer as a helper for $25 per hour for the last couple yrs and started at $20 per till he realized that I worked hard safely and showed up never worked on a roof before but knows tools .....
13 folds
Now that is some truly sad commentary It says a lot about what has happened to a once proud trade!
Posted by Doug Allan (Member # 2247) on :
Well said Ray! That is how I felt about most of the signshops I worked for. Some appreciated & rewarded that loyalty more then others... but when I came time to consider an employee of my own, I didn't plan to settle for much less then someone devoted to the success of the company, not just to getting their 40 hours. Now that I've seen the difference, the right people can easily be worth double what the wrong people are worth.
Posted by Doug Fielder (Member # 803) on :
Chris,
Call it what you want, I had my shop going before I worked there and NEEDED to keep working on the side. If they paid $18/hr I wouldn't have needed to do the side work (in Vermont).
I was giving you a perspective from an EMPLOYEE'S point of view, it is your lack of understanding that causes you to pay these workers so low, thus losing them. I was trying to open your eyes to what prospective workers had going on in their lives, and WHAT I DID other places. YOU asked for what people were paying, well I told you how much they were paying me!
Posted by Chris Lovelady (Member # 2540) on :
Doug Allen
Thank you for your openess. this kind of comment is exactly what I was looking for. your experiense with hiring employees.
I agree to pay what a person is worth and their desire to be a team player and help grow the company they work for. Some of my strugles are you never know their work ethic or there ability until you hire them, even with calling there references. so i like the idea of working them a day or two before you offer the job. i think there should still be a 90day probation period.
this the min. of what i expect from any employee, with or with out experience. i make them sign it and give them a copy so they and fully understand. if you have good work ethic and be able to learn procedure this is not hard to accomplish in 30 days.
After 3 months of working for Vital Signs, LLC all employees are expected to do the following items: show up to work on time, keep all work stations clean, follow instructions, Work independently off of a daily list, accomplishing tasks as discussed each day. Being able to read and follow direction on a work order and asking for assistance when any concerns arise. Employee will use equipment and tools correctly after 30 day training period is over. The employee will show concerns for high standards for all jobs completed. After the 3 month probationary period the employee will be given an evaluation and continual employment will be discussed.
Off Topic
I think as far as the plite of emplyoment i am fully aware of employee needs(rent, food, lights, car payment, insurance). I am an employee of my own company and answer to polices and standards of my company. My company has been in operation for 15yrs.
quote:origanaly posted by Russ McMillin There are thousands of things a person could do on the side that wouldn't conflict with the interests of your business. In fact, anything that your shop doesn't market should be fair game in my opinion. My boss and I have an agreement: I don't do graphic design and vinyl sign work on the side (in our market area), but I am free to do things our shop doesn't concentrate on, like woodwork, illustration, glass gilding, painted boat lettering, etc.
Russ if you have these skills that your employer does not offer and you can do, don't you think you could make considerably more $ from these skills that he could market! better yet in the spirit of the letterhead movement why don't you teach these skill to him. Sign Work is Sign Work.... Conflict of Interest . Now if you were doing roofing or carpentry work on the side that is not a conflict.
my Dad told me a very long time ago when i got my first job bagging groceries at the A&P at 14 for 2$ hr., that employment is a privilege not a right, you have to earn it!
Lovelady
Posted by Russ McMullin (Member # 5617) on :
It is VERY clear to me the reason your employees don't stick around.
Posted by Mikes Mischeif (Member # 1744) on :
I hired our neighbor girl who has no experience (which I prefer), no car, and has never worked a day in her 18 years.
I began at square one.
Can you find the center of 63 1/2 inches?
Can you be here at 12:00 and work until 4:00 5 days a week?
Can you leave your cell phone off while your at work?
Will you do things the way I show you?
Will you ask if you don't understand anything?
She said yes to all 5 questions.
I started her at $10/hr.
After 3 weeks. She is doing very well.
Her brother is working for $5.75/hr at Abercrombie & Fitch. He can't stand it.
Posted by Doug Allan (Member # 2247) on :
Chris, I think your employer style may be a little different then I would choose. However I consider myself to be quite inexperienced as an employer, & I feel I have way more to learn then to teach.
I do think your views on employees carry over into your comments on the board, & your written hopes for their 90 day acomplishments. I'm sure they also carry over into the day to day experience of working for you. There may be some room for introspection there.
I think employment is a privilege... but so is having someone willing to make money for you with every hour they work. So is having someone sacrifice their time in your environment, on your terms, to do your bidding.
I consider all men equal, and while I have chosen the path of self employment, I worked for many years, including 8 years in the sign industry. I had the dignity and self respect that came with being good at what I did & feeling at least somewhat appreciated most of the time, but I also had a few power struggles when I felt there was a gap in the level of mutual respect.
As an employer, I want those who have chosen to be employees to feel that this is just as reputable & respectable as being an employer, & we form a team. I have certain rights and responsibilities that go with my territory, & they have others.
If I have to stay late to bail myself out of over-promising, or suffering under the consequences of unexpected delays... getting the jobs out to keep my word, and make my money... this is my problem. After 5 pm, it's not my employee's problem.
A good employee will want to help some of those times & that should be appreciated, and rewarded, because that is not what he signed on for. That's just one example, but there are a lot of areas that I think we can forget the point of view of the employee if we are not careful.
One more thing... if a guy is worthless... you will let him go before 90 days right? ...so why don't you re-write the note to employees in a more positive tone...
"If this employment follows both of our best intentions, after 90 days, if not sooner, you will receive a pay raise in recognition of the following aconplishments..."
There is no reason to imply one's employment will ever cease. They already know of that possibility.
Posted by Roger DiNofa (Member # 2781) on :
Very well put Doug! I was going to respond to this post earlier but found it hard to explain things from an employees point of view. I also find it refreshing to hear it from an employer!
Posted by Chris Lovelady (Member # 2540) on :
it is clear to me i have been misunderstood.
my apologize to all here.
Lovelady
[ July 16, 2007, 03:31 PM: Message edited by: Chris Lovelady ]
Posted by TJ Duvall (Member # 3133) on :
"I have to remind people that they are hired to make the company a profit not draw from that profit."
The company I work for has a monthly profit sharing plan. 10% of the monthly profit is divided up evenly between all the employees. With deductions based on attendence. This is very good motivation for people to be here and on time and to work efficiently.
If you were to make the above statement to me during a probation period or really at anytime during my employement. That would be very discouraging and I think my work ethic would definately change for the worse.
I think Doug has outlined a very good business plan that should be considered by anyone wanting to grow their business.
Posted by George Perkins (Member # 156) on :
My how things change. In the old days I worked at a number of commercial shops as a journeyman sign painter. Evrybody did a little "snapping" in the evenings and weekends. The shop owners knew it, weren't crazy about it but never said anything as a no compete clause would probably have run 75% of the painters off. Were were always approached out on jobsites about doing work on the side and ALWAYS turned it down referring them to the shop owner. We never stole any work away from the shops either. What we did on our time though, was our business. I can remember riding throgh town one day and seeing this really nice wall job. From the style, I knew exactly who did it. Upon closer inspection I saw, down on the lower right, where everybody signed thier work or put the shop name, was neatly lettered "A. Snap" Posted by Doug Allan (Member # 2247) on :
quote:Originally posted by Chris Lovelady: it is clear to me i have been misunderstood.
Based on your posts, some of the replies here hint at a perception that you may also be misunderstood by your employees. Is that where you have been misunderstood by some of us?
...don't bail out, make an effort to be understood.
Posted by Doug Allan (Member # 2247) on :
by the way, thanks for the compliments guys!
While I'm at it, I want to say thanks again to Jon for helping me to develop my business & my business sense. Without a doubt he has been worth every cent & then some over my costs for the consulting work we have done!
I mentioned my work with Jon Aston several years ago when I began to contemplate the growth from a one-man-show, maxxed out on how much I could work & topped off at my peak of $100K annual sales for 4 years running.
What I failed to mention is that I have continued my work with Jon through our second (or 3rd?) year when I hit $180K, & last year hitting $280K
This years sales are on track to go up by at least $50K even with little to no trained help for the first quarter.
I'm no idiot, & I worked hard to acomplish what I've done... but it's without a doubt that working with Jon Aston of Marketing Partners
[ July 16, 2007, 05:00 PM: Message edited by: Doug Allan ]
Posted by Jim Bagaas (Member # 3808) on :
I didn't read all the posts,But,here in Orlando and most Florida I've found wages to be on the low end from the rest of the world. I'm working for a larger company (3 divisions) with 30 years in plastics and vinyl and I'm at 17.00,the newer guys are running 10 to 12.00 area.our metal fab.guys with a few years behind them are 12 to 14.00.
hope that helps a wee bit.
Posted by Dave Grundy (Member # 103) on :
Doug...I am glad to hear you mentioning Jon Aston!
An experienced "advisor" is worth every penny they earn.
In our case it was, thanks to a friend's suggestion, that we met with a financial advisor regarding our retirement goals. He made suggestions and enabled us to be able to do what we were hoping to do.
Looking back, I wish that I had been wise enough to consult a business advisor 25 years ago and a financial advisor also. We have and will be doing quite well in retirement but I am now convinced that "advisors" would have enabled either an earlier retirement or a more lavish one!!!
Sorry to kinda hi-jack the thread, but Doug started it!!!
[ July 16, 2007, 07:18 PM: Message edited by: Dave Grundy ]
Posted by Craig Sjoquist (Member # 4684) on :
Excuse for the sad commentary ..but in this fast pace city and VERY transit..retailers call it ...the mouth of the wolf... and the goverment is against outdoor advertising as well, except for goverment. ...During the late 80s early 90s for years I counted 12full plus pages in the yellow pages of sign co's....city has double or tripled in size plus since, now less sign co's. I've been here 23yrs. ...Can count on ONE hand how many letterhead type meets..ok surely must be more if going 200 miles plus, none in Orlando...by comparison Mpls, Minn I went to 4 before 1985 also knew many sign ppl ...here few yes wages are low, demand for the trade here is low, even though volume is high ...a sign co. here once said the biggest, fastest n best machine assures you work... not skill or knowhow this the reason for the sad commentary... excuse but real ...CHRIS you seem like a fair man and good boss and whom ever works out well for you, will be happy. ...Orlando has alot of ppl that just screw ppl over, no refection on anyone who IS REAL...that lives here or near or far....just a opinion
13 folds
Posted by Mike Pipes (Member # 1573) on :
Mid to late 20 somethings enjoy doing things like buying a home, getting married and starting families, but they can not do it earning $8-$9 per hour or $16,000-$18,000 per year.
This may be why you're having a hard time keeping them around.
If you want employees to make working for you into a career, they need career-level pay and benefits.
Posted by Bill Lynch (Member # 3815) on :
I can't comment on pay scales in Florida, but to retain employee's takes more than an hourly wage. I offer health benefits after 90 days, I pay 25%the first year and it increases 25% a year to 100%. I also offer a Simple IRA. I also offer respect and gratitude for a job well done. Along with a relaxed shop atmosphere. Side jobs? No problem as long as I see no conflict. I grew up in this business doing side jobs.
Posted by Russ McMullin (Member # 5617) on :
Chris, I wasn't trying to make you upset, but I do think it's important to see things from the employee's point of view sometimes - especially if you are having trouble with retention. It doesn't matter how much you pay them if they leave after a short time and you have to spend more unproductive time training someone new.
Posted by Wayne Webb (Member # 1124) on :
My son began working for a tree trimmer, just last year, at the ripe age of 17. I think the guy started him out at $9.50 but has paid him several $100 bonuses and raises along the way. I think Josh is now making $12.50 an hour plus a company truck, health insurance, and bonuses.....and he is now 18 and just married two weeks ago.
But my son is mature way beyond his years and is a faithful, hard worker. I see nothing wrong with starting someone off at $9 an hour with a probationary period because, frankly, alot of employees aren't worth shucks after the first few days. But if you get a good employee, like Doug did, recognize and REWARD the fact....don't take advantage of them. I like what someone said above....I want an employee who works WITH me....not FOR me.
Posted by Doug Allan (Member # 2247) on :
I think having an employee come on board and make $30K in a year resulted in me making an extra $30K... but this is not because I literally made an extra dollar off every dollar he made on each job he worked on...
while I tried to make sure between overhead, labor & material costs that there was always profit...
...one of the biggest factors in an employee helping an employer make more money is freeing up your time to "work on the business, instead of in the business"
Even with a savvy business person at the helm, & all the right infrastructure in terms of shop equipment, supplies on hand, & your existing marketing, or brand recognition... with no help, you can hit a ceiling, like I did.
But once you get help... all your previous work in establishing an awareness of your company, and developing an organized infrastructure starts to pay off finally... PLUS you are now free to continue doing more behind-the-scenes work that will be the support systen for further growth.
[ July 17, 2007, 02:10 PM: Message edited by: Doug Allan ]
Posted by Chris Lovelady (Member # 2540) on :
ok, i will do my best to be understood
after doing homework on some of the issues in this post that were off topic but related. this is what i found after meeting with a business consultant From Valdosta State University (Free service, check your local university for this oportunity). The requirements or what he called Terms of Employement were not harse but should be met in the First day or week of employement.(keeping workspace clean, showing up to work on time, correct use of tools[tape measure, twezzers, snapknife, skill saw]minimal mistakes after training period, following direction, reading a work order) included in those terms can be a statement that no sign work, lettering, fabricating or installing of signs can be done by the employee out side of "Vital Signs" during the term of employment. these is a ligitamate terms for any trade. there also has to be terms of disapline, if you do this..this is what will happen. Now i also found out that in Florida & Georgia, the No Compete after Employement will not hold up in court! also these two states have a no falt laws were the employer or employee can be terminated or quit at any time for any reason. they can file unemployment on you but if you document misconduct based on your terms. you can generaly keep this from happening.
We have seen a direct need for an employee hand book that lays out all the terms, insurance, retirement, workmans comp laws, insetives and goals and diapline. also written and and posibly illustrated procedure book. how to lay vinyl graphics, prep materials, installations...ect, that could be used by the employee.
we can and do offer to a employee health plan, retirement IRA, they are covered by law with Workmans Comp, they drive a company vehicle while on the job. milage is paid if you use your vehilce. with greater responsbility comes compinsation(money). I do know if you start insentives like boneses and profit shareing that you have to stick with it and the goals have to be measurable,...you do this you get this. also by law you must pay time half for over time. so if an employee works late he get this, it is a Federal Law. there is no force overtime. you can also offer Comp time in place of overtime.
Russ; what goals are set for you by your employer to increase pay. what was your reqirements for starting pay.
Glen; what kind of goals to you set for your employes to give pay raises. what requirements do you need for a certain starting pay.
TJ; profit sharing sounds alot like bonses but not based on performance and can be regulated by attenance?...interesting. this is a good insentive.
the job market in my area is slim on experienced sign people. The ones that have been hired come to me with no experience in signs, and often cannot read a tape measure...this is what i have to work with. even with drug testing, I stuggle with alchol and drug abuse on the job or coming hung over. problems without safe driving records (can't put them in my company vehicle). wanting to bring there cell phone to work and talk allday to their buddies. i have sought help hiring through the department of Employement, Local Hiring services, with the same results. How can i offer insurance, retirement, insentives ect...for these behavors. if i could find that guy that could be passionate about the sign industry, i would love to mentor, share my skills. but most young people just want a job, were is my money. I have had several people work for me that have gone on to other fields, i was the in between job. and that was ok cause I new it hiring them. I even have been approch buy someone that closed his sign business. He asked me for a Job. He wanted a % of each job that he worked on and an enormous pay rate...hhmmm why did he close his shop anyways?
I think so much of this topic that i think it should continued and to be disscused from both points of view. How do you find work in the sign industry as an employee? Were do you find experienced help for your sign company? As an employer what goals or insentive do you set? As an Employee do you need insurance, IRA, Finacal insentives? as an employee when do you or did you make that jump into owning your own business and loose all your benifits and steady pay?
Lovelady
Posted by Doug Allan (Member # 2247) on :
I agree Chris, that this is a valuable topic for many of us. Thanks for checking back in.
I think you have encountered some real challenging set-backs. I would like to think I will never put up with some of what you have mentioned, but I also realize that once you take on growing beyond what you can ever do alone... you might have to make various sacrifices to deal with that fact. It's a tough tradeoff.
Both consultants I work with, & several good books have mentioned core values as an important part of the foundation on which you build your business. This concept, as I understand it, is to serve to remind us of our identity as a business, and a business person. This should guide us in what sacrifices we do, or don't make for the business, & what evolution or deviation of our business plan we do our don't make regarding the customer experience, and our own work environment.
I think if you choose to have an efficient, self motivated, & driven team of committed sign professionals who focus on the quality of the work & the workplace, as well as the professional relationships on both sides of the sales counter... then that is what you will have.
Just like my childhood theory of an artist from the youngest age that I received acknowledgement for supposedly being one... if you strive to create something beautiful... just look at it, and if it's not... then you know you're not done yet.
Sure, that's an over simplification, but we do have to identify what will lead us closer to meeting our expectations and what will not. There are times when a retreat is better then an advance, so as much as possible, don't waste time with the wrong people.
Posted by Chris Lovelady (Member # 2540) on :
Doug, that has been my point from the begining, my not wasting time with the wrong people thus the quick turn over. people will tell you what you want to hear but action seems to be lacking.
True core values are the foundation of any sucessfull company, and employees must fit in that frame work that you as the owner has established.
a constant work on these values, terms of employement and a nurturing envoirment for growth, procedures in production, we are constantly working on these and will continue to.
Doug, I want to keep on topic.
How are you finding your employees, what are you baseing there starting pay on, and what are the goals you are setting for there advancement in responsiblity and pay raise?
Lovelady
P.S
quote: Doug wrote I think you have encountered some real challenging set-backs. I would like to think I will never put up with some of what you have mentioned, but I also realize that once you take on growing beyond what you can ever do alone... you might have to make various sacrifices to deal with that fact. It's a tough tradeoff.
Pleases clearify..i do not want to misunderstand what i think your saying.
[ July 22, 2007, 01:27 PM: Message edited by: Chris Lovelady ]
Posted by Doug Allan (Member # 2247) on :
I am only at the early stage of my new chosen path of being an employer. I've only had 4 employees & 2 worked out, while 2 did not work out. Of the 2 that worked out, the first one moved back to his home town, but plans to return. the other one is in his 4th month with me, has received 2 raises & various bonus perks along the way. Both of them started out at $12.50/hour.
I advertised in 2 newspapers & 2 on-line venues when my first successful employee was about 90 days away from his departure. I spent a fair bit of money on that, but didn't get any qualified candidates except 2 former business owners. Like in your case, I felt their expectations may have been too high, but more importantly, I felt they represented too high a risk they would go off & set up shop down the street. I'm not afraid of competition, but I sure don't need to train some newcomer to Maui of all the pricing & other local considerations that will help them compete with me... I want people who may grow into starting their own shop in 3 to 5 years, not 3 to 5 months.
I think you are right on the money with your comments about getting things in writing, like job descriptions, advancement expectations & incentives. I don't have it together thet much, but I hope to some day. Right now I try to keep good communication channels open which includes comments from me ragarding my plans to reward my team for their increased productivity & profitability. I enjoy training, so when I have the time, I will show people things even if it's not currently what I need their help with. In this way, I might find that someone is better suited to a task, then I might have guessed, or has more natural curiosity or drive to learn some things rather then other things. My current guy has years of experience in the fabrication environments of sign shops... but not so much on the computer. I have taught him to run my Edge, inkjet & 3 different plotters. I've also taught him quite a bit of the basics using Signlab, Flexi & Omega to output my designs to those machines. I also taught him enough about Photoshop & Illustrator to help me start setting up files with vehicle or building photos & then scaling some of my design work on to those drawings.
Since he has proven to be a very fast learner on all those computer skills, I asked him to help do some layouts. I didn't expect him to do as well as quickly on layouts, but he surprised me, so I'm glad I didn't wait a year to offer him that opportunity.
Because the fabricating, welding and spray booth work he did previously was done in your more typical cluttered & messy shop environments, he has had to adapt to both the required level of dust free cleanliness that is optimal for digital printing, and the additional neatfreak realities of his new boss. This is somewhat of an effort for him, but without expecting him to change completely & instantly, I have let him know I've decided on a clean shop as the environment I want, & he has shown dramatic improvements in respecting that.
I asked him how he liked his job the other day after adding to this topic. I told him about this discussion & mentioned that was why I was asking. He's not a talker like me, but he's not afraid of telling me if something is bugging him... so no news is good news, but I was glad to have him confirm that when asked.
Posted by Doug Allan (Member # 2247) on :
I forgot to clarify my meaning on the quote you asked about...
after reading your comments:
quote:Originally posted by Chris Lovelady: the job market in my area is slim on experienced sign people. The ones that have been hired come to me with no experience in signs, and often cannot read a tape measure...this is what i have to work with. even with drug testing, I stuggle with alchol and drug abuse on the job or coming hung over. problems without safe driving records (can't put them in my company vehicle). wanting to bring there cell phone to work and talk allday to their buddies.
If I have to scale back the amount of work I take on, I would do that before I would take on help like you describe above. With a good interview process, possibly a performance evaluation & checking references.. I'd like to think I could spot the entirely unexperienced, or the inability to read a tape. The party animals & phone junkies may slip through the cracks... but in my opinion, you should never have to put up with any of this crap, however, if you now have 2 locations... I can see how scaling back your operation due to lack of qualified help is at a whole different level then mine is. For me, if I can't have quality people, I'll do it all myself until I can... which is what happened for 3 months this spring.
When I learned something that made my employee less valuable to me, I planned to fire him that instant, but let the day end without comment, slept on it, & let him go the next morning. That's as long as I would ever want to have the wrong person around.
Posted by Chris Lovelady (Member # 2540) on :
quote:Doug wrote .. I'd like to think I could spot the entirely unexperienced, or the inability to read a tape.
this has been a basic skill requirement for employement for some time. if some one cannot tell me right away what half of 3/8" equals that is the first clue. but some one with no sign experience can be taught much of the procedures and operating the equitment(Plotters, printers) we use with in a short time..now software education is another issue. who here has started in a sign shop with no experience and was brought up and taught what we now know.
quote:Doug wrote I advertised in 2 newspapers & 2 on-line venues when my first successful employee was about 90 days away from his departure. I spent a fair bit of money on that, but didn't get any qualified candidates except 2 former business owners.
It seems that you have finally partially touch on the issue that has been part of the topic that i had originaly brought up. what is your definition of a sucessfull employee?
quote:Doug wrote the other one is in his 4th month with me, has received 2 raises & various bonus perks along the way. Both of them started out at $12.50/hour.
again a partial answer...but, what are your criteria for starting pay, criteria for raises? what do you to use measure when he gets a bonus. 4 months out of the gate and 2 raises, bonus, Perks ...impressive! good luck to you Doug.
I welcome any new thoughts or experiances on my questions from both points of view.
Tomorrow is a new day and I will continue to search for the answers I look for and those employees who will fit in my shop.
Lovelady
Posted by Doug Allan (Member # 2247) on :
it's nice to know my 4 or 5 feet of paragraphs on this thread are "finally partially" touching on what you want to talk about. Maybe my various criteria are best interpolated by the reader.
Around here $12.50 is not enough to rent a room and eat... so I expect to offer raises soon if someone is worth keeping around. "Successful" employees are the ones I still want, who still want to work here, and who are happy making what I am happy paying them.
Posted by Russ McMullin (Member # 5617) on :
Chris, I don't feel this forum is the right place to discuss the pros and cons of my current employment situation. If you've got an email address I'll be happy to discuss some of my ideas, or you are welcome to call me at the number found here:
sure Russ, i have gotten several e-mail concerning this post already very positive! I would love to hear from you! i also invite anyone who feel that some figures may be sensitive to Drop me and e-mail...it is in the tool bar above this post.
also, I get news letter from a Professor of Business at Florida State University after i attended a workshop he held at our Chamber of Commerce, and this just so happens to be todays newsletter! It is surely worth the read!
quote:Revenue per Employee
If one does not know to which port one is sailing, no wind is favorable. -Seneca (Seneca the Elder)
One of the questions that entrepreneurs frequently ponder is whether the size of their labor force is proportionate with the amount of work that they have to do. Finding the right balance is critical. Clearly, every dollar that you save on labor costs goes right to the bottom line. However, a labor force that is too small affects customer service as well as the delivery of your firm’s products and services.
In my mind, one of the best ways to gauge the relative size and efficiency of your workforce is to look at revenue per employee (RPE). This method is not perfect, but it provides a good benchmark.
So many firms just assume that their existing labor cost is fixed, and that it cannot be changed. One entrepreneur that we were assisting was experiencing a decline in sales. In response, he reduced his labor cost by 20% through attrition and layoffs. When sales returned to the original level, he was surprised that his newly downsized labor force was more than capable of handling this sales level. Before the sales fell, his RPE had been $70,000. After the reduction in labor force, his RPE jumped to $120,000.
Another firm that we were assisting was having profitability problems. They had a $100,000 RPE, and their total cost per employee was $50,000 with salary and benefits. The firm’s cost of goods sold was 40%, and overhead averaged 20%. For every $100,000 of income, $50,000 was going to labor, $40,000 to cost of goods sold and $20,000 to overhead. While the firm was bringing in $100,000 in revenue, its costs were $110,000. This was not a pretty picture.
In order to correct this problem, the firm had two options: either reduce its labor costs or expand its sales without expanding labor. Both are do-able, but painful.
When used as a benchmark for comparison, RPE provides a very effective means of ascertaining the ideal size of your labor force. The average RPE for all firms is around $150,000, but RPE varies depending on the industry. For instance, a labor-intensive industry like farming is going to have a very low RPE, whereas technology firms should have a very high RPE. In light of this variance, statistics are available by industry to aid in comparison. Additionally, if you are changing processes or technology, you ought to see these changes in improved RPE numbers.
Now go out and monitor your RPE on a monthly and yearly basis. Compare it against some benchmark to ensure that your labor force is not too small or too large.
You can do this!
Jerry Osteryoung is the Jim Moran Professor of Entrepreneurship in the College of Business at Florida State University. He is also the Director of the Entrepreneurship Program at FSU and Executive Director of the Jim Moran Institute of Global Entrepreneurship. He can be reached by e-mail at jostery@comcast.net or by phone at 850-644-3372.
Lovelady
Posted by Jean Shimp (Member # 198) on :
Chris, Thanks for the article. Do you know what the RPE is for the sign industry?
Posted by Chris Lovelady (Member # 2540) on :
I asked that same question and am waitng to hear back. when i get thit i'll share it.
Lovelady
Posted by Bill Lynch (Member # 3815) on :
Signs of The Times does a survey each year on RPE, and breaks it down by size of company and market segment I believe.
Posted by Jeff Ogden (Member # 3184) on :
Chris...I look at hiring, and all that, as a corporate way of saying things. This sign business we're in has never been a corporate thing.
Each individual within your shop, needs to be a creative person in their thinking. So you cannot send them around to do things, like they were robots.(OK...well sometimes)
In other words, each person should feel responsible as to the outcome of things.
In order to achieve that degree of "company man"-type loyalty, you must be able to prove that working for you will be best for them in the long run. as opposed to working for the gvmt or whomever might offer them more benefits.
Find the right person(s), then make them feel like partners in the biz. Do some profit-sharing. Set up a retirement plan...do everything to ensure they will be able to live well, when they are 65.
You want to be able to retire in a good way...so should they.
I'm sure you are very fair with who-all is working for you right now...
I'm just saying, that before you get so busy that hiring is a problem, go back and make sure that that's really what you want to do. Sometimes smaller is better.
Posted by Chris Lovelady (Member # 2540) on :
Thanks Jeff, I hear you.
How do you find the right person? were do you look besides an ad in the paper and weed through all the applicants.
we are far from corporate, but we do offer the retirement plan, insurance, but i think that until someone can show they will be with you longer than 1 year than that is kind of tuff...do you offer profit shareing to some one who has been with you only 4 months...still kind of tuff. this is more like a goal to set.
creativity and individuality is always nurtured here. i will alway look for new ways to do things, and look to employees for their input.
if you are going to grow your buiness beyond just one man shop then you have to have guide lines on tardiness, sick days, drug and alcohol abuse. set goals for advancement in pay. are they generating enough income, educating them to be more profitable costs. employee salery effects the overhead and thus the shop rate, then you have to ask does your shop rate acceed what the market will bare.
I have to say this, we can make the best made most creative product and if we don't have a handle on the business part of the company than there will be no need to hire people, you will be looking for a job. Any good company will want to better there employees life finacially, we do.
i think that in the end there are 3 things we can do with our buiness. Pay the bills and close it up, pass it on to our kids, or sell it. if you just have a customer list and some used equiptment it won't be worth much. if you can walk away from you business for 2 week vacation and come back and it is still there operating and making money, i think it is worth a whole lot more!
It is not like the old days for me when I threw My kit in the truck and took off. the over head was the brushes and paint and the truck payment, working out of your garage or on the kitchen table.
the answer i got on the RPE he did not know what the data on our industry. I am interested what sign of the signs of the times says....
Lovelady
Posted by Chris Lovelady (Member # 2540) on :
here is another good news letter...
quote:Profitability per Customer
If the whole world followed you, would you be pleased ~ Neale Donald Walsch
One of the most important things in running a great business, bar none, is insuring that you earn a sufficient level of profit for your business. Profit is good and lack of profit is bad. However, just because you have generated a profit, does not necessarily mean that you are earning enough. I have seen way too many businesses that just creep along without earning a reasonable level. I encourage most businesses to shoot for a net profit margin of 10%, knowing that, if they make anything above 7%, they are doing super.
While looking at profits in the aggregate is very important, sometimes there is just not enough detail in these pictures to help you make some hard decisions. I suggest that you look at the profitability you generate from at least your top 10 customers. I guarantee you will be surprised at the different levels of profits you are earning from different customers. Financial institutions do this type of analysis all the time to help them focus on the profitable areas in order to target and to deemphasize those areas of low or negative profitability.
The owners of one firm we assist did this type of analysis and they were very surprised at the result. Certain customers they thought they were making a lot of money on were the exact customers they were loosing money on. Just because you have a large amount of sales from a customer and you “think” that you are making money on them, does not guarantee actual levels of profit. There are so many ways for profit to vary from your projected levels due to additional labor or materials that you had not factored in to your price.
I urged the owners of one construction company to look at the profitability per customer. They were surprised to learn that the call back time they were putting in to keep the customer happy, was just wiping out any and all profits from their primary customer. In this case, they were able to negotiate a higher price (to account for the difficulty of dealing with this customer) without alienating the customer and thereby increasing profit.
A software company was also surprised to find out it was losing money on many accounts when it looked at the contract work it was providing the State. The company raised prices on the next set of bids to insure profitability from the lion’s share of its customers.
Looking at the profitability from individual customers will help you to weed out any unprofitable customers, allowing you to focus your efforts on those areas of maximum profits. Now go out and start looking at the profit you generate from individual customers!
You can do this!
Jerry Osteryoung is the Jim Moran Professor of Entrepreneurship in the College of Business at Florida State University. He is also the Director of the Entrepreneurship Program at FSU and Executive Director of the Jim Moran Institute of Global Entrepreneurship. He can be reached by e-mail at jostery@comcast.net or by phone at 850-644-3372.
Posted by Nathan Rule (Member # 4887) on :
Chris i work in Orlando, FL and i started at $15 However i have 10 years in graphic design and 7 specifically in the Sign Industry. When i first started 7 years ago in california i was started at $10 and worked my way up to manager and $21 + Bonuses... But cost of living is much more expensive out there then florida (as you know!)
But if i was only a designer that would be the max i would expect. I can however install full vehicle wraps, Run any printer or cutter and also do inside sales with the best of them. So with that in mind i expect about 18 to 19 max after a year or so with a company.
Hope that helps
Posted by Chris Lovelady (Member # 2540) on :
thanks Nathan...
this is exaclly what i have been asking for. were you given goles to gain Bonuses and raises...what were some of those goles.
Thanks again.
Lovelady
Posted by Nathan Rule (Member # 4887) on :
well in cali it was a sales goal. If we reached a certain monetary goal for a month we were given hourly raises for that month and that would be our bonus for the next paycheck. Here in florida i'm not sure if they do that here but i'll find out in time
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It says a lot about what has happened to a once proud trade!
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