Bakernomics: What Will Your Dream Cost?
I'm willing to bet this still seems huge and impossible, right? This step is going to make the challenge more tangible. And if it's tangible, it's imaginable. And if you can imagine it, you can do it.
WHAT WILL IT COST?
Last time, you figured out the cost of restructuring in words. "All I need to do is..." Let's assume you need to hire a baker to replace you on the bench (and take on some other duties too once she's all trained up.)
What will that baker add to your Weekly Operating Expenses? That would be your Loaded Labour Rate. That is, the baker's wage plus all the extras. Here's an example:
Base Wage (say, $18 per hour) X 40 hours = $720
Vacation Pay (3/52) = $41.54
CPP / EI Premiums (or equivalent)* = $53.42
Worker's Compensation Premiums** = $8.42
Loaded Weekly Labour Cost: $823.50
* Substitute Social Security or whatever your government charges you. In Canada it’s 7.42% of the base wage.
**Average Worker's Compensation Insurance in Saskatchewan is 1.17% of payroll. Yours will likely be different.
Let's round this up to $850. This is your magic number. We need to find $850 per week to achieve this blissful state of shifting away from daily production.
Does that seem like a lot of money? It sure does for me. $850 was a big chunk of Tuesday sales at Orange Boot and closing in on a full Wednesday.
But don't panic. The rewards are worth it in the end. Remember why we’re doing this!
Your Homework: You guessed it - it’s time to figure out your personal magic number.
Maybe hiring a new baker wasn’t your goal. Maybe your personal loading factors are different. No matter - take an hour and figure out the true cost of the change you want to make at your bakery.
Pro Tip: Don’t lowball your dreams. No sense pretending you’ll pay your bakers $9 per hour to make a smaller magic number.
Don’t sabotage your dreams by inflating your costs either. Be realistic - we’re really going to do this!
Thoughts? Questions? Too simplistic or scary-real? Let me know in the comments!