Managing Your Salary Cap - Deepstash
Managing Your Salary Cap

Managing Your Salary Cap

  • Managing the salary cap is the key to improving profits.
  • If you are exceeding your salary cap, decide what to do about it. Are you going to hold wages constant until you hit your profit target, are you going to cut staff, or are you going to do some of both?
  • Once you get to 15% pretax profit, then you can add employees to drive your profit back down to 10% again. Work your way back up to 15% and repeat.
  • If you try to raise your salary cap when you have only 10% pretax profit, you’ll drive your profit down toward 5%, which is the danger area.

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jessicadelgado

Medical sales representative

This book teaches the fundamentals of owner compensation, profit targets, labour productivity, cash flow, and data reporting. Clear explanations and helpful illustrations throughout make it a must-read guide for small business owners looking to achieve higher profits.

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