How to Manage Revenue per Employee
Learn how to calculate your revenue per employee, and improve those figures.
Your revenue per employee reflects how lean you are running your business. Being lean in business is important for streamlining your processes and maintaining a clear growth strategy. To identify exactly what the revenue per employee is, divide your total revenue by your total number of employees, including yourself. Do not include your Comfort Advisors or other commissioned staff in the equation.
Total Revenue / Number of Employees = Revenue per Employee
Now, you need numbers. If necessary, grab your smart phone or old-school calculator and estimate your approximate revenue per employee to get an idea of where you stand. You can fine-tune the numbers later.
Where do you rank?
Is $170k a good number? High numbers may or may not be good. Are you overworking your people? Are you missing opportunities to hit your target number? Opportunities you may miss with higher numbers include longer waits for service calls and lower customer satisfaction due to overworked employees. You need to weigh the factors and see what’s right for your business.
Focus on company culture. If your revenue is not where you want it to be, company culture is the first place you should look. The best ways to improve company culture are leading and training your team. It will be easier to decide where to focus first if you ask these 7 questions.
- Do my people understand the strategy and game plan I am trying to accomplish?
- Are we operating efficiently?
- What do my marketing efforts look like?
- What does my sales focus look like?
- Am I understaffed?
- Do I lack direction?
- Do my team members understand their roles?
Involve your team. Your team will often know where you need to push harder or let off. Ask for feedback from them and let them know you value their opinions. It is vital they understand that everything affects everyone in the company. To learn more about managing your business and maximizing your profits, reserve your seat for our next Operations Accountability class.