Many people who open their own business do so because they have a talent or passion for a particular field. Unfortunately, that doesn't always overlap with natural business acumen, and you may find yourself struggling to keep costs under control and handle the administrative duties that come with an expanding company.
The growing field of consultancy offers expertise on specific issues that can be used to guide you through a wide variety of challenges. If you have concerns about the growing salaries attached to your business, getting answers to some of the questions below should allow you to reign in those excesses and feel confident that you're well positioned for the future.
Ask About Redundancies
If you've grown your company with a solid core of the same people, it's likely that each employee plays an important role. Unfortunately, it's also likely that responsibilities have changed over time and the duties undertaken by some people may be better served by others.
By figuring out if there are redundancies anywhere in your organizational structure, you may be able to better determine whether your salary dollars are being spent in the right places. While no business owner wants to be responsible for eliminating positions, it is important to constantly evaluate the health of your business and decide if cuts are necessary in the long term.
Ask About Bonuses
Managing employee salaries is about more than just considering base pay rates. Indeed, many companies succeed by offering performance-based bonuses that employees are able to factor into their personal budgets as long as they're driven to meet goals, and many companies see benefits from that system.
One thing to remember about bonus structures is that your yearly projections should include the assumption that all employees will max out their bonuses. However, since it's likely that at least some will fall somewhat short of that goal, you may find yourself with cost savings on your year end balance sheet.
Ask About Your Own Pay
For many business owners, it may be easier to evaluate the pay of employees than it is to evaluate the compensation of ownership and management. Not every business overpays its owner, of course. In fact, you may even be underpaying yourself. By asking for a thorough and unbiased accounting of ownership compensation, you can take an action that will simultaneously secure the health of your growing business and your own financial future.Share