Andre,
Not a problem.... Here is a basic example of profit sharing that could be easily implemented:
1. Work out your fixed costs for the year. This will include rent, utilities, cost of merchandise etc. Basically, work out your profit margin. If you do not know what that is - ask your accountant or book keeper - whoever does your books each week / month.
2. Don't be afraid to share your fixed cost number with your staff. The easiest way to get staff buy-in is to make them feel responsible and have a vested interested in the numbers themselves..
3. Take that fixed cost number and divide it by 12. This becomes your new sales target for each month. Any staff member who achieves sales above that figure each month gets a bonus. Make the bonus a fixed percentage so that everything is transperant.
4. If you have non sales staff - reward them by assigning a notional figure against their name for the work that they do. Eg - You may have an excellent instructor who sells nothing but does an excellent job teaching. Assign a number to him/her based on the revenue that each client bought into the business - perhaps overlayed with a customer satisfaction score. The higher the score the higher the notional amount assigned to the instructor...
5. Make the whole system totally transperant, and build it into people's employment contracts. You will find that staff will have something to aim for each month - and will help to keep fixed costs down. After all - they have something to gain from this now......
Worked example - in its simplicity....
Fixed costs of business: $120,000 per year (or $10,000 per month)
Shop turnover: $240,000 per year (or $20,000 per month)
Turnover less fixed costs = $240,000-$120,000 = $120,000 (or $10K per month)
2 instructors / sales staff who sell courses and teach. They also sell equipment (or are suppose to). Each now has a $5,000 per month sales target (2 sales people need to cover the overall fixed cost of $10K). This should be easy, as the revenue is already at $20K per month.
3. If they achieve sales of $10K or less ($5K each) - no bonus. This is to cover expenses, and to justify their jobs.
4. If they achieve sales between $10K and $20K ($5K and $10K each), pay them a thank you amount. They are already selling this anyway - but being appreciated never hurts. Say 5%...
5. If they achieve sales over $20K month (10K each), then pay a larger bonus on any amount of $20K achieved (say 10% for the sake of this example).
Mary has a good month in June. She managed to sell several sets of equipment plus courses. Her sales for the month were $12,000. Her bonus would be zero for the first $5K, 5% on the second $5K ($250) plus 10% on the remaining $2K ($200). Total bonus for the month is $450.
Sounds like a lot? - but what are you losing? You pay more when staff try and bring more in. The harder they try, the more everybody makes all round.....
Staff who get rewarded for their actions in an open and honest way will try harder, will work harder, and will make you (and themselves) more money. You will attract better staff who will stay longer - as their salary and earning potential is now in their own hands........
Best person to help you set this up is your accountant - assuming you have a good one of course.
This is a very simplistic example. Don't over complicate it within your business - but make the numbers work for you.....
Good luck with it
Ps - in terms of succession planning. Really quickly - a staff member forgoes their bonus (and even a percentage of their salary) to purchase shares in your business. Over time the shares build up. They use this equity stake in your business to approach the bank for funding for the remaining majority that they do not as yet own. The bank will lend based on set ratios (differ in each region), and you have a way to exit the business. Accountant and lawyer set this up.
. Sorry but after pool lights, rent and heat that's just outrageous. I do agree though why would two dives get paid the same as four.
