Liberal Business owners - a true story of what I get to deal with right now

[Paulie]

Employee return is not a static number in a service business. I have a service business and trust me when I tell you that a good employee will make you more money than a lousy one.

yes.....now you are talking about having a lousy emnployee..

But if you have 1 good employee with a return of x...and you decide to hire another good employee....his return will be x as well.

Use my earlier example of an accountant.

An accountant bills x an hour.
You hire a second accountant.
You still get x an hour per accountant.

I'm saying though, there's variables that change the equation. You can add a new employee that's innovative, smart, motivated, etc, and he'll bring more into the business than if you hired a new employee that did just enough not to get fired.

 

[Jarhead]

a company not increasing output per employee isn't doing it right.

in a service company? You are 100% dead wrong.

An accountant for example....has 50 man hours per week...generates X amount of dollars.

Hiring another accountant does not mean now each accountant can generate 60 man hours...and it does not mean the firm can charge more per hour.

You are 100% dead worng.

No, hiring doesnt increase the output.

Ingenuity does.

You said this: revenue per employee is a stationary number....such is different in manufacturing....but in service, all analyses are made based on the return per employee being a set number...

You are wrong, revenue per employee is not a stationary number.

Especially in the service industry, where faster and more efficient work increases output, and with technology, ingenuity and training employees become faster and more efficient.

Jeesus...you dont want to learn...you just want to be right.....

GT...

I own an accounting firm....I have 2 accountants. We pay them each 50K and we bill 100 per hour for each of them. Their return is equal.
Then we hire 10 more accountants...we pay them 50K and we bill 100 for each...the return is equal for all of them.
So the firm has expanded by 10 times...and our return for each of them is stationary.

In some cases, the return may actually DECREASE...for if you have 20 accountants as opposed to 2 accountants, you can drop your price per hour to gain a larger market share and still make the profit you want.

But expansion does not mean your return per employee will increase.

You can not call your clients and say "we just tripled the size of our office so now we are going to charge you more per hour."

You are worng GT....learn from this. Your argument is flawed.

 

[Paulie]

You should see what planet fitness did to the small gyms in my area. whoo000o

In my area it didn't hurt much. Snap Fitness came to town and there's still several small gyms doing well.

 

[Paulie]

in a service company? You are 100% dead wrong.

An accountant for example....has 50 man hours per week...generates X amount of dollars.

Hiring another accountant does not mean now each accountant can generate 60 man hours...and it does not mean the firm can charge more per hour.

You are 100% dead worng.

No, hiring doesnt increase the output.

Ingenuity does.

You said this: revenue per employee is a stationary number....such is different in manufacturing....but in service, all analyses are made based on the return per employee being a set number...

You are wrong, revenue per employee is not a stationary number.

Especially in the service industry, where faster and more efficient work increases output, and with technology, ingenuity and training employees become faster and more efficient.

Jeesus...you dont want to learn...you just want to be right.....

GT...

I own an accounting firm....I have 2 accountants. We pay them each 50K and we bill 100 per hour for each of them. Their return is equal.
Then we hire 10 more accountants...we pay them 50K and we bill 100 for each...the return is equal for all of them.
So the firm has expanded by 10 times...and our return for each of them is stationary.

In some cases, the return may actually DECREASE...for if you have 20 accountants as opposed to 2 accountants, you can drop your price per hour to gain a larger market share and still make the profit you want.

But expansion does not mean your return per employee will increase.

You can not call your clients and say "we just tripled the size of our office so now we are going to charge you more per hour."

You are worng GT....learn from this. Your argument is flawed.

That's just an accounting firm though. Not every business is the same.

I have a home improvement business. I can definitely get more return from new employees based on how well they perform. I'm not pigeon holed to a specific return per employee. Some new hires will actually COST me money, and others will be gold mines.

 

[Jarhead]

Employee return is not a static number in a service business. I have a service business and trust me when I tell you that a good employee will make you more money than a lousy one.

yes.....now you are talking about having a lousy emnployee..

But if you have 1 good employee with a return of x...and you decide to hire another good employee....his return will be x as well.

Use my earlier example of an accountant.

An accountant bills x an hour.
You hire a second accountant.
You still get x an hour per accountant.

I'm saying though, there's variables that change the equation. You can add a new employee that's innovative, smart, motivated, etc, and he'll bring more into the business than if you hired a new employee that did just enough not to get fired.

when expanding and analyzing the cost to do so, you MUST use a stationary number for the return on the employee.

An innovative accountant may help the reputation of your firm....but it doesnt mean you can charge more per hour for your staff....it just means you can market yourself with more pride.....and when the time comes where that innovative employee has increased your reputation...perhaps you CAN increase your hourly fees....but that wouldd be across the board.....making the return equal for all....

Now...if you have different divisions...one that caters to corporations and one that caters to personal...sure.,...you charge differewnt hourly rates....but you also pay different salaries.

 

[GoneBezerk]

That's called capitalism. Survival of the strong.

I used Gold's Gym in Tampa because it was close to my place and I liked their quality. I probably wouldn't use "Vinny's Gym" because he would have less equipment, less room and less hot women working out.

You sound like the anti-Wal Mart whiners. Wal Mart brings together in one stop all the things someone might need at equal or better prices than 4-5 smaller stores. Liberals should be for Wal Mart saving people gas by just driving to one store instead of all over town.....

You should see what planet fitness did to the small gyms in my area. whoo000o

 

[Ravi]

Employee return is not a static number in a service business. I have a service business and trust me when I tell you that a good employee will make you more money than a lousy one.

yes.....now you are talking about having a lousy emnployee..

But if you have 1 good employee with a return of x...and you decide to hire another good employee....his return will be x as well.

Use my earlier example of an accountant.

An accountant bills x an hour.
You hire a second accountant.
You still get x an hour per accountant.

I'm saying though, there's variables that change the equation. You can add a new employee that's innovative, smart, motivated, etc, and he'll bring more into the business than if you hired a new employee that did just enough not to get fired.

And the other accountant wouldn't be hired if there was no expectation of more clients. His argument is extremely lame.

 

[Jarhead]

No, hiring doesnt increase the output.

Ingenuity does.

You said this: revenue per employee is a stationary number....such is different in manufacturing....but in service, all analyses are made based on the return per employee being a set number...

You are wrong, revenue per employee is not a stationary number.

Especially in the service industry, where faster and more efficient work increases output, and with technology, ingenuity and training employees become faster and more efficient.

Jeesus...you dont want to learn...you just want to be right.....

GT...

I own an accounting firm....I have 2 accountants. We pay them each 50K and we bill 100 per hour for each of them. Their return is equal.
Then we hire 10 more accountants...we pay them 50K and we bill 100 for each...the return is equal for all of them.
So the firm has expanded by 10 times...and our return for each of them is stationary.

In some cases, the return may actually DECREASE...for if you have 20 accountants as opposed to 2 accountants, you can drop your price per hour to gain a larger market share and still make the profit you want.

But expansion does not mean your return per employee will increase.

You can not call your clients and say "we just tripled the size of our office so now we are going to charge you more per hour."

You are worng GT....learn from this. Your argument is flawed.

no, they're doing it wrong.

If output cant increase or be expected to be increased, they're doing it wrong and you're a bad advisor.

I've managed in the service industry and personally implemented systems that increased output per employee.

YES....

and now the return per employee has increased....but it is still deemed equal per employee....and if you expand...the new employees will have the same return as the old employees wewree getting.

 

[Paulie]

You should see what planet fitness did to the small gyms in my area. whoo000o

In my area it didn't hurt much. Snap Fitness came to town and there's still several small gyms doing well.

Thats good to hear.

around here, we had a few small guys go out of business because they cant afford to price match.

At p.f, you can pay $20 and it includes tanning and also a permanent guest pass.

That's definitely a tempting price, but I prefer the local gym I go to because it's not crowded...which I would expect with the cheap corporate gyms.

 

[Jarhead]

yes.....now you are talking about having a lousy emnployee..

But if you have 1 good employee with a return of x...and you decide to hire another good employee....his return will be x as well.

Use my earlier example of an accountant.

An accountant bills x an hour.
You hire a second accountant.
You still get x an hour per accountant.

I'm saying though, there's variables that change the equation. You can add a new employee that's innovative, smart, motivated, etc, and he'll bring more into the business than if you hired a new employee that did just enough not to get fired.

And the other accountant wouldn't be hired if there was no expectation of more clients. His argument is extremely lame.

you are a fool.
The other accouintant may be hired due to an increase in frim reputation and the need for another 50 hours of manpower...
Pay attention.

 

[Ravi]

I'm saying though, there's variables that change the equation. You can add a new employee that's innovative, smart, motivated, etc, and he'll bring more into the business than if you hired a new employee that did just enough not to get fired.

And the other accountant wouldn't be hired if there was no expectation of more clients. His argument is extremely lame.

you are a fool.
The other accouintant may be hired due to an increase in frim reputation and the need for another 50 hours of manpower...
Pay attention.

No offense, but you live in lala land. You don't hire people unless you expect to make a profit off of their labor.

 

[Jarhead]

no, they're doing it wrong.

If output cant increase or be expected to be increased, they're doing it wrong and you're a bad advisor.

I've managed in the service industry and personally implemented systems that increased output per employee.

YES....

and now the return per employee has increased....but it is still deemed equal per employee....and if you expand...the new employees will have the same return as the old employees wewree getting.

And your original statement said return per employee is stagnant and doesnt increase in the service industry, which is why Paulie and I took issue.

No...I said it was stagnant and doesnt increase due to expansion. Just becuase you increease your employees, doesnt mean your return per employee increases....your profit will increase......but your return per employee will not..

And it came from my explanation that if, in the service industry, your COST per employee increases (ACA), and your profit per employee doesnt increase, then you need to find where it makes sense to increase youir staff...

You need to pay attention.

 

[NYcarbineer]

here is the best way to explain it..in simple terms...

A servcice company does not have revenue per employee increase with addtional employees.....revenue per employee is a stationary number....such is different in manufacturing....but in service, all analyses are made based on the return per employee being a set number...regardless of the increase in staff....

This does not include cost of space and technology.

If expanding means the cost of employee will increase, but the return on employee will remain the same, then one would not expand.

Now...if going above 50 employees means the cost of each employee will increase, but the return will remain the same, then an analysis will be needed to determine where it would make sense to expand....and as the numbers above show...expanding by 33% is far from the number...

And unfortunately...expanding by anything more than 33% is next to impossible at one shot.

Take it from there.

You're automatically, and wrongly, assuming that every company will maintain wages at the same price and simply add healthcare as a fully additional benefit.

IOW, you're paying your employee 25,000 a year and no healthcare, but now healthcare is mandated and you pay your employee 25,000 a year plus 5,000 in healthcare, for a 30,000 package.

Maybe the employer cuts wages to 20,000 a year, plus 5,000 in healthcare.

For no substantial net loss.

 

[CrusaderFrank]

Some people tend to put the best interest of their country ahead of their personal wealth. Warren Buffet supported Obama. He'll find ways to build his businesses, and probably figure out ways to leverage the improved health of his workers.

If someone I paid to manage my business came to me and said we can't grow because we're moving toward universal health care, I'd think about hiring someone who told me how I can grow. I'd prefer hiring a systems thinker, who thought of the here and now, and gave me an optimal strategy. I wouldn't want some pea brain partisan hack telling me how I voted limited my growth potential. Too bad managers aren't required to take course work in operations research.

I've worked for, and managed groups for, companies who did quite a bit of work for federal, state, and city governments. When we grew to the point where small business set asides were at risk, we didn't whine about not growing. The task was to figure out how to grow. Maybe you're not cut out to be a manager.

Buffett has all his personal wealth in a tax free trust.

You knew that, right?

I've mentioned it no less than a dozen times already

 

[Jarhead]

And the other accountant wouldn't be hired if there was no expectation of more clients. His argument is extremely lame.

you are a fool.
The other accouintant may be hired due to an increase in frim reputation and the need for another 50 hours of manpower...
Pay attention.

No offense, but you live in lala land. You don't hire people unless you expect to make a profit off of their labor.

you are either not paying attention, unable to read, or just a freaking fool.

I never said anyone would ever hire someone to not make a profit.

You are just too wrapped up in finding fault in those that think differently than you to actually unbderstand what is being said.