Help Identify the Ideal Cost of Running the Business
We often get to this question during the early stages of a partnership: “How much should we be spending on labor to run this business?”. In a business climate whose predominant trait is change, knowing how much a company has spent in the past is only a part of the answer. Like any element of an enterprise, taking a “zero based” approach is a way to make sure the “way we’ve always done it” is challenged sufficiently.
When labor is the single largest cost component of the P&L, it is perspicacious to know how much is too much, or too little. We help companies understand the labor cost they should expect in the business. Once it is understood how much labor it takes to operate, it is a logical next step to use that information when changing procedures, building budgets, and developing new opportunities.