How much profit do you think you make for the company you work for after your salary?

Phirefly

Mr P works for a very small (2 directors, 5 employees) company on a part-commission basis. He knows precisely how much profit he brings in as he is privvy to the profit and loss accounts and its pretty much all of it. While the company has been keeping afloat during the downturn, he's offered to postpone being paid his commission as his view is that by doing that he won't be killing the goose that lays the golden egg.

Its a risky strategy but I trust he knows what he's doing and we both believe in the long-term future of the company and the potential of his taking a more controlling role within it, and a bit of commission now could be small fry compared to potential earnings.

baileysbattlebus

Thrugelmir wrote: »

If I sold an intergrated desktop to printing press software application, together with related installation consultancy services to a major newspaper for £8 million. How much have I made the company which employs me?

I guess that would depend on the prime cost of the kit you sold (if your company manufactures it), if the the prime cost was £7,999,950 then obviously not a lot. If the prime cost was £4million - then an awful lot.

Of course your company could buy them in and sell them on.

Thrugelmir

baileysbattlebus wrote: »

I guess that would depend on the prime cost of the kit you sold (if your company manufactures it), if the the prime cost was £7,999,950 then obviously not a lot. If the prime cost was £4million - then an awful lot.

Of course your company could buy them in and sell them on.

The Company develops and writes its own software, and sells it internationally. An installation takes around 15 months to complete. As an enormous amount is configurable to the clients own specfication.

The whole exercise is a team effort and not reliant on anyone individual. The European subsidary sells one application every 18 months or so.

baileysbattlebus

Thrugelmir wrote: »

The Company develops and writes its own software, and sells it internationally. An installation takes around 15 months to complete. As an enormous amount is configurable to the clients own specfication.

The whole exercise is a team effort and not reliant on anyone individual. The European subsidary sells one application every 18 months or so.

It sounds like very technical low volume stuff - do you have a vanilla model you can tweak or configure to your customer specs? Or is it proper unique from scratch stuff for every customer?

You sound more like an R&D dept - probably continual development - but with a valuable product at the end. Sounds really interesting.

Some of the companies I've worked for, the R&D depts were actually separate businesses from the manufacturing side. They were run separately - we used to charge them for using the manufacturing facilities - time is money and all that - every hour the machines/operators were involved in new product trials was money lost in production.

I have been involved in the aquisition of bespoke kit - and it ended up costing a fortune - though from a business point of view worth it - it was to cut out printed circuit boards - the company I worked for had unique mats made - that had to be cut out by hand using clippers - often having to be sent back to be tidied up - hand cutting is not the most precise way of cutting and there were lots of people involved - got the kit (£10m) - no need for 30 or so people - just one operator and no reworking. The price of progress I suppose. It was German - built to our spec and in the end if was superb.

The cost side of business and products is something I have been involved in most of my working life and I still find it interesting.

nearlyrich

I am a sales person and last half year (April to September) produced revenue of over £2.5 Milllion but that is not all profit and it's difficult to get to a profit figure per sales person from the info I have, however it represented around 140% of my target so everyone was happy and I get a huge bonus this payday.

Doozergirl

baileysbattlebus wrote: »

Someone on a till in Asda is a direct cost - not an expense/overhead.

The person on the till in a bank is a direct cost - not an expense/overhead.

The pilots/airtraffic people are direct costs - they are the operation of the business.

OH is an airtraffic engineer - he is operational staff - a direct cost not an expense/overhead.

It is how business is costed - any business.

What are you on about? I am not interested in semantics. I am talking about the softer side of business. The people who make it and how a good member of staff can be worth more to the company than they cost, regardless of role. When all things are equal it can be someone who considers that they don't contribute towards profit that actually causes some people to be customers at all.

Perhaps your computer head can't compute that. What your textbook calls them is irrelevant. Individuals should really consider their true value to a company or it isn't worth them getting out of bed in the morning.

lostinrates

Doozergirl wrote: »

Individuals should really consider their true value to a company or it isn't worth them getting out of bed in the morning.

While I wholeheartedly agree with the senitment, in fact, couldn't agree more: thats not the question posed in OP. It is possible to appreciate worth to a company and self worth yet separate that from your ''value'' (in monetary sense) as a fee earner/profit maker.

baileysbattlebus

Doozergirl wrote: »

What are you on about? I am not interested in semantics. I am talking about the softer side of business. The people who make it and how a good member of staff can be worth more to the company than they cost, regardless of role. When all things are equal it can be someone who considers that they don't contribute towards profit that actually causes some people to be customers at all.

Perhaps your computer head can't compute that. What your textbook calls them is irrelevant. Individuals should really consider their true value to a company or it isn't worth them getting out of bed in the morning.

And probably the reason a lot of businesses go under

I understand completely what you are saying - but soft business does not necessarily mean good business - it can - though not usually. Yes - people might return - but if your overheads are too much in the end there won't be anywhere to return to - regardless of how nice someone is.

There is nothing wrong in having an efficient business and good staff - it's normally the way a very good business is run.

I do find it difficult to look at business from a "soft" angle - it's difficult to change the work of about 30 years -

Doozergirl

baileysbattlebus wrote: »

And probably the reason a lot of businesses go under

I understand completely what you are saying - but soft business does not necessarily mean good business - it can - though not usually. Yes - people might return - but if your overheads are too much in the end there won't be anywhere to return to - regardless of how nice someone is.

There is nothing wrong in having an efficient business and good staff - it's normally the way a very good business is run.

I do find it difficult to look at business from a "soft" angle - it's difficult to change the work of about 30 years -

Oh please. I do not spend my entire life looking at business from a soft angle. I am specifically talking about people on this board, that perhaps don't realise that if they do a good job then it is absolutely possible that they do contribute towards profit. It was one comment which you appear to have turned into some huge profitability perspective for every business out there and decide therefore that this somehow reflects on my own business acumen.

Frankly, everybody needs to do a good job to make a business succeed and everyone has their place in a company's profitability regardless or not of whether you call them a direct cost. The more they cost, they impact upon profits. The more they contribute, the more they save in resource and therefore they contribute towards profit, even if it's a few hours worth of work a week where they don't need to employ someone else. If you are bad at your job then your cost to the company is greater where others have to pick up the slack. Some people's job are to go out there and get the money but everyone else has a responsibilty to make the whole thing run smoothly - perhaps they are not directly employed by the business to create profit and are considered an overhead by people like you, but overheads are necessary to make businesses work and where each member of staff contributes well, they are contributing to profit - perhaps in a small way - but regardless of the fact that they also cost money.

There is no bad business in that. When the people working for us work efficiently, there is more profit in the pot for me, therefore I really appreciate those people. When they come up with an idea that costs less but does the job, there is more profit for me.

fraser

assuming I am fully utilised, which I am, then it is over £250k profit for the firm not taking into account employee overheads