Integration Can Cut Labor Costs Across America
If your business is having to swallow huge labor costs- you are not alone. The U.S. Department of Labor recently reported that labor costs are among the largest expenses a company might absorb.
The average labor cost for businesses in the retail industry is around the ballpark of 10%- 20% of total revenue. In most cases, this number exceeds the cost of inventory on hand, making it difficult for your average mom and pop vintage store to stay afloat.
Small Business Labor Costs
Picture this: you walk into a vintage clothing store downtown in your city to find the most amazing pieces of clothing. High waisted Levi cut-offs, polka-dot dresses, vintage designer glasses from the 1980s- a hipsters dream closet.
When you walked up to the counter, you meet the owner of this amazing shop named Jen. You also meet Jen’s 14 -month old daughter Lila, who makes your vintage shopping trip all the more adorable. You keep thinking to yourself, “wow this woman is incredible; a single mother with two kids, running the entire shop on her own.”
The point of this story is that there are amazing people across the United States following their dreams by starting their own business, but labor costs are high, and keeping track of accounts is difficult.
If you are a hospitality or food industry business in the United States, your labor cost percentages may be as high as 30%. Business owners can expect their labor costs to come 2nd only to the price of real estate.
And, unfortunately, labor is an integral part of any business. The problem is, how do you cut indirect labor costs and reduce your overhead costs?
Calculating Labor Costs
Calculating your own labor costs can be a headache, digging through all the paperwork, pay stubs, inventory costs, rent, and overhead may be a bit overwhelming.
In order to calculate the labor costs of your business, you should take your total revenue from sales and divide it by your total payroll. Remember, your total payroll costs include benefits provided for your employees.
Labor costs are high, and the key to staying afloat among the sea of business across America is by ensuring your own paycheck comes at the end of the week.
The Solution is in the Cloud
It is 2019, and there is this amazing system called Cloud Accounting. This system is affordable, will save you time, money and maybe even a headache.
Technology is doing amazing things for big business across the Nation, but Cloud Accounting can be extremely useful to a small business as well.
It will help cut labor costs by tracking your accounts in real time and providing business owners with viable resources to understand where every single penny of their business goes.
Save the Planet, get ready to hire employees instead of working overtime, and utilize the incredible resources available to your business through technology integration.
People are doing crazy things to stay afloat, but there is a solution in cloud bookkeeping. And we don’t mean in your dreams, we mean as a complementary tool to make your dreams a reality.