Josh Melick – The Importance of Tallying Sales and Pay

When running a business it doesn’t take much time for things to get away from you and to stop reviewing the things which are in fact so important to the companies operations. Josh Melick has touched on this on his recent blog post which goes deeper into the need to constantly weight up the economics of the business. Any well established business will be able to draw clear differences from how they once approached the company economics to how they do now, and many will tell you that they should probably be doing more.

Josh however goes in deeper and reminds companies that they really should be looking at their economics more often. This has a huge impact on how the business is run and here is exactly why this tallying up process should be carried out on a regular basis.

Sales Comp Plans

An important part of what Josh has to say with regards to company economics is that they have to always ensure that they fall in line with what is being paid to the staff. This is particularly true when it comes to those companies which have sales comp plans in action. If this was set up a couple of years ago then the goal posts may well have moved somewhat since the percentages were first set up. Reviewing this will help the staff ensure that they are making the money they need to, and that the business is not overpaying for what the staff are doing.

Matching Growth

We often think of growth as a single event but the reality is that companies are growing all of the time. A lot of businesses will think of an increase in premises or a larger marketing campaign being growth, but things change every day. This is why those spreadsheets have got to be accurate and why we always have to look at the bigger picture regarding the economics of the business. It may be that budgets are larger, sales are growing and in order to meet these demands the staff have to be paid and incentivized in the right way.

Rising Costs

It is not only the operations of the business which may cost more, but also the rising costs of the things which the business needs from the outside. As these costs rise, so too much the prices that the business charges, and the employee pay must also reflect this. A failure to constantly review the economics of the business could result in a small percentage of this rising costs being absorbed by the business, rather than being passed on to the customer. We have to always ensure that we are reviewing the economic picture, if not we may end up costing ourselves money which we really don’t need to.

It can be a painful procedure but this is exactly why we have to ensure that we are tallying the pay and the sales of the business at all times.