Wednesday, March 16, 2011

March 16, 2011 - Leverage Labor

* * * This is a clinical discussion * * *

1.) How do we leverage labor? You hire somebody at $10.00 an hour and they bring in $20.00 an hour - you sit in the middle and make money - and they are doing all the work? Do you agree or disagree with this analysis? Discuss in small groups.

2.) The Bonus. Can it be used as a "tool"? For example, you pay lower wages, but give a "bonus" every Christmas. Employees rely on the "bonus" and believe if they leave they will miss their bonus for a new job even though the new job would actually pay more money in wages without the bonus. Discuss in small groups.

3.) 5% commission rule. Is it a good idea to use sales representatives? List two pros and two cons to this approach in small groups.

4.) List two ways to structure your financing (i.e., not sales which is dating and terms). It's easy to do for sales because you're in the driver's seat -- however, how can you structure financing? Asset backed financing (is that a good approach)? (hint: stock . . . but now you have a partner)

5.) After you have worked for a company - break away and start your own. Discussion about non-compete agreements, restraint of trade, et al.

6.) Inventory. Is the secret to a great business a great inventory? Or, should you carry very little inventory?

7.) Brokerage. If you don't have the cash to invest in the capital of a manufacturing firm, for example - then could you be a broker first, work for capital via commission or sales, then invest that capital into manufacturing for your business and hiring brokers?

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