When do you know when to start hiring?
Here at GB Plumbing, we knew we should be starting to hire when we were working over 70 hours a week and not seeing any slow down with jobs coming in. We’re now up to 3 trucks, and are looking to hir...
Forum Discussion
We are a local Roofing Business in Worcester UK. Established since 1971 and currently have 21 staff all in. When ever we have expanded we always look at work crews versus office/management staff. As we hit certain break points we know that to take on more crew staff will require additional office staff to help manage. We then look at the profit of each crew minus the increase in office staff to manage them. We have found over the years that expansion is not always the best if you end up having more staff but no more profit.
Let me just jump in to add that I've found "Markup and profit a contractors guide" by Mike stone to be an incredible resource for this. He walks through all the basic contractor math and shows exactly how to calculate the effect on markup of hiring additional staff (or any other overhead expense). He does a really good job showing you how to work the math backwards and forwards to figure out either A. what your markup needs to be to sustain certain expenses (such as additional office staff) or B. what additional sales volume is required to make the new expense work at the same company markups.
There are lots of resources out there that cover this type of material but I can say hands down that Mike Stone's books are the best. I also recommend profitable sales, he's got a book on estimating as well but I don't find that one to be as valuable as "Profitable Sales" and "Markup and Profit". Those two books are always close at hand for keeping the knowledge fresh.
