I should be reaching a level of work soon where I'll have more than I can comfortably handle. Rather than work longer hours or turn down work I was looking at recruiting staff.
That way the clients will still be mine. Margin on staff will prob be 10%-20% - realistic?
I guess it depends on the staff. Are they experienced? How good they are? etc..
How much will you have to pay them and what jobs will you let them do?
If some jobs pay less than others, then you need to weight up the cost of that employee against the income that those jobs would generate taking into account the employers National Insurance and holidays.
Perhaps do a little exercise working out the annual salary at different pay rates, compared to the actual hours available they would work.
Plus, how much of your current workload will the staff member eat into until they are actually looking after additional clients in excess of your current workload?
Overall I would be looking at a bigger margin per hour, perhaps 30-40%, but again depends on your own hourly rate compared to the average wage for a bookkeeper in your area.
For example, If I charge £15 an hour as standard, then I would be looking to pay someone around £9-£10 per hour which is quite a good hourly rate.
I have a similar problem as I need to employ more junior staff to do office visits. I feel my taken is taken up so much with office visits I am unable to concentrate on growing the business. Unless you just want to make sure you keep the clients to grow and help spread the cost of overheads (insurance, software support etc), I would be careful of such a low profit margin. I use a lot of freelancers when the opportunity arises as employment law is such a nightmare. Donna
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
Yes the margin should be higher, and naturally I'll try to get the best i can. I do charge flat fees, but I'm thinking that most freelance bookkeepers will probably charge close to what I do anyway?
Similar to what Donna said, I should look for the more junior jobs I am currently doing and get in a more junior bookkeeper on a lower rate to do those jobs instead of me. I can then look at getting more work etc.
Does anyone have a team working for them, from an office? Are they all employed and you guarantee work for them every day?
