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View Full Version : Need some goo advise..


sixpixels
02-12-2012, 04:52 PM
Hey guys
Ive been in business for about 2 yrs now. I brought my brother in law in as an employee. He is my foreman/manager. He deals with the day to day operations with the crew when im not around as well as does the physical work daily. I handle everything else.
Now my intentions are to have him work for us and then eventually if we both agree we would partner up. kind of like dating before getting married. I know alot of you will say dont partner up but i also work a full time job and cannot afford to leave it just yet. So i need someone responsible enough and that knows the business to run it when i cant be there.

Now this past season he was taking home a salary of $1000.00 per week. It killed me trying to get payroll for him and the other guys to make sure everyone was paid up on time. This season coming I cant do it. Thats way to much for me to pay out for one guy. In the end i need to collect a check, pay all employees, and i need to have funds in the business account for day to day operation.

how and what should I pay him? Ive been thinking it over for weeks and cant come to something that we both would be comfortable with.

Dr.NewEarth
02-12-2012, 05:57 PM
The owners is always the last one paid

sixpixels
02-12-2012, 06:37 PM
I understand that. That's exactly how it's working right now.
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Landrus2
02-12-2012, 07:03 PM
Foreman for a thousand not bad who will you get to run things

djagusch
02-12-2012, 07:12 PM
Did he get $1,000/wk 52wks or just for the season? How many wks did he get paid?

Is he working 40 hrs a week? How many are managing compared to physical labor?

How I'm reading your post is you have x amount of work that is estimated and you are paying out more hrs of payroll than is estimated. So you are cutting into your profit and overhead.

To make it work out for everyone you need to estimate out how many hrs of labor you have per week in work (Ex: 110 man hours on the normal route). You should have a cost assoicated to an hr of labor. Lets say you have a cost of $15 per hr after work comp and employer taxes, so $1650 in labor costs per week (110hr x $15/hr). If he gets $1000 cost of labor (1000 - work comp on that and employer taxes) you have $650 in labor to pay out or 43 hrs at your estimated cost of $15 per hour.

In the example it shows he needs to work 67hrs of physical labor for the numbers to work. Basically the 1000 hrs divided by $15 cost.

You would have a couple options/thoughts.

Associate x amount of hr/cost of labor to your overhead "to manage" the employee's. This should be done but at what I don't know. Does he spend 5 hrs a week or 20 hrs managing you should be able to answer.

You can up his cost of estimated labor and lower the crew's cost to average your $15/hr. This would help offset some hours and be closer to real costs. Think if 70hrs is wieghted to 11/hr and the other 40 (him) is weighted to a higher 19/hr or however the math works there.

Main thing is if you estimate 110 hrs of labor at $15/hr then your payroll needs to match that. Anything more is eating into your profits.

Remember when figuring your time if it's in the field it should be counted in your payroll hours also.

djagusch
02-12-2012, 07:25 PM
I would think a incentive for making payroll for the week would be a good thing for both parties. In my example if you makes payroll then give a percentage increase in pay etc. Maybe explain the payroll situation and come up with a good estimated time both agree too. Change his base pay to $900 and $100 for making payroll. B/S time, stops, and guys milking the clock would disappear pretty quick.

sixpixels
02-12-2012, 07:38 PM
id he get $1,000/wk 52wks or just for the season? How many wks did he get paid?----32 weeks

Is he working 40 hrs a week? How many are managing compared to physical labor?---- Average is 52 hrs per week all inthe field running the crew,talking with customers, giving estimates

djagusch
02-12-2012, 09:39 PM
id he get $1,000/wk 52wks or just for the season? How many wks did he get paid?----32 weeks

Is he working 40 hrs a week? How many are managing compared to physical labor?---- Average is 52 hrs per week all inthe field running the crew,talking with customers, giving estimates

So you need to figure during a week how many hrs you have accounted for in the estimated work load.

On his 52 hrs you need to figure on average how much is spent working on admin stuff comapared to production stuff.

Does my earlier post make sense on the direction you need to go to figure this stuff out??
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sixpixels
02-13-2012, 11:02 AM
So you need to figure during a week how many hrs you have accounted for in the estimated work load.

On his 52 hrs you need to figure on average how much is spent working on admin stuff comapared to production stuff.

Does my earlier post make sense on the direction you need to go to figure this stuff out??
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realistically he is a foreman. All of his hours are out in the field with the guys cutting. I do all the billing, collections, making sure all vendors are paid, insurance etc etc. So really i am doing all the admin stuff. He is doing the production stuff.

Your earlier post does make sense I just have to sit down and figure out all the numbers. THX for you help. Def appreciated.

djagusch
02-13-2012, 11:59 AM
realistically he is a foreman. All of his hours are out in the field with the guys cutting. I do all the billing, collections, making sure all vendors are paid, insurance etc etc. So really i am doing all the admin stuff. He is doing the production stuff.

Your earlier post does make sense I just have to sit down and figure out all the numbers. THX for you help. Def appreciated.

It will be a good exercise to go through the numbers like that.

When the numbers don't match up estimated hrs to actually route hrs you will need to do some figuring and look into the mirror also. Could be low estimated times, lack of production, windshield time (you can reduce this if you have less people in the truck).

Also you can learn what percentage you are running at productivity. Meaning lets say the route is 110 hrs but you estimated time should be 100 hrs. Well going forward with estimates you can put it a 10% extra in labor to account for productivity loss. Just a variable you can put in to cover it.