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If 5% of your revenue is profit (a very healthy number), and half your costs are labor, an 11% hike in labor costs will wipe out all your profits. Corporate pro
by nickff 5y ago
If 5% of your revenue is profit (a very healthy number), and half your costs are labor, an 11% hike in labor costs will wipe out all your profits. Corporate profit margins are smaller than most people think, and labor is usually their largest cost.
- alphabettsy 5y agoThat really depends on how “expenses” are counted and deducted.
- nickff 5y agoI'm counting 5% EBIT, to simplify things, so 47.5% of revenues go back out the door as wages.