Announcement

Collapse
No announcement yet.

employee cost to income ratio?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • employee cost to income ratio?

    Hey! Does anyone have any info about what is a good employee payout to income percentage and what percentage is too high? In other words, you have say 35 actors and a certain amount of income, what percentage is recommended to be at to be successful? This is for the haunts that pay the employees, of course.. We really need some input on this if possible.. Thanks everyone.
    Virginia's premier outdoor haunted attraction-
    www.wicked-woods.com

  • #2
    Hello Wicked. I am not sure if this is the best way to look at it (or maybe I am not understanding the question). Your labor should be a fixed cost and the income is variable (especially being outdoors). You pick the number of actors you need, the number of nights they work, and the amount you pay them. I know you have been running for several years so I guess you have a good idea on attendance numbers. Are you looking to pay the actors more if more people attend? Or less if fewer? Are you trying to pay by the hour? Per night? By percent of gross? If you sell 500 tickets this year you are upside down. If you sell 50000 tickets this year, payroll will be in the single digits for percentage. My two cents is to forecast how much income you will have on ticket sales, deduct all expenditures for the haunt, takes what's left and figure out how much of that can go to actors. Divide that by a fair wage for the actor and you will know how many actors you can employ within your predetermined amount. If you need more actors you will need to sell more tickets or consider paying a little less. I hope this helps a little (not sure if I did). Please post questions if you have them. Best of luck this season!!
    Last edited by horrorman666; 05-31-2014, 07:42 AM.

    Comment


    • #3
      Originally posted by WickedWoodsHaunt View Post
      Hey! Does anyone have any info about what is a good employee payout to income percentage and what percentage is too high? In other words, you have say 35 actors and a certain amount of income, what percentage is recommended to be at to be successful? This is for the haunts that pay the employees, of course.. We really need some input on this if possible.. Thanks everyone.
      For the past 10 years or so our labor has averaged between 30% and 35%, however I can't see how this, by itself, would lead to success without all other expenses computed in.
      http://www.piratesofemerson.com

      Comment


      • #4
        Maybe Subcontracting?

        OK, have a look at the monitor. See them? There is the next group coming in here, so what am I bid?
        "I'll take them for $12.95."
        "I want them, I'll do it for $10.95!"
        "Anyone going to bid lower than $10.95?
        "Wait a second, isn't there a really foxy babe standing behind that huge guy?"
        "I'll go to camera two... Yes it seems to be that way."
        "My bid just went down, Boss!"
        (In a perfect world...)
        hauntedravensgrin.com

        Comment


        • #5
          Thanks for the advice.. I know it's kind of a difficult question because there are a whole lot of factors. For example of your employee payroll was 40% of your income where does it become too much to payout? When do you need to start cutting actors and labor costs? I've heard 40% was too much for any business for just employee payout but I know with haunting, your employee pay is a major portion of your income. In other words, what are some examples of what very successful haunts ratios for employee cost are? It would be interesting to see what is a good number to be at (roughly). Thanks alot
          Virginia's premier outdoor haunted attraction-
          www.wicked-woods.com

          Comment


          • #6
            Hello again Wicked. Again, I am not sure this is the way to tackle the issue. 40% is bad if you cannot afford it but fine if you can. Your revenue should be your driving number in the equation. I am still guessing you have a reasonable idea on attendance numbers being an established attraction. You need to base your costs against this forecast number. For example, let's say you sell $500,000 dollars in tickets this year and your labor is the 40% you mentioned. Will the $300,000 that's left cover everything else? If you sell $10,000 in tickets will the $6000 that's left cover everything? There is a big difference there but the labor percentage is the same. It's the same thing with the major players. If they employ 100 per night at $50 each for 30 nights they have a $150,000 payroll for the season. If they do a million they are at 15%, half a million and its 30%.
            When does it become too much?? It is too much when your costs exceed your revenue. When do you start cutting actors?? You have to be careful. You do not want to compromise show quality because you may start losing revenue in lost patrons. I'm sure you have a good idea on how many actors you need to have a successful show. Costs can be trimmed in other areas to help make sure you end the season on the plus side.
            I would suggest taking a forecast revenue number and working backwards from there. You predict 5000 guests buying your combo ticket and that grosses $115,000. This number works if your costs are less. The costs you can (mostly) control and should have a good idea on the number before the season starts. The trick is making sure you meet or exceed your predicted attendance. Again, I hope this helps a little to get a better understanding on the numbers and is not too confusing. Best of luck for a successful season
            Last edited by horrorman666; 06-09-2014, 03:08 PM.

            Comment


            • #7
              Its about more than income to salary ratios

              I am no financial wiz by any means, but I just completed a very comprehensive Business Plan for our business, including all the financials. The financials take into account a lot of different factors, with labor costs being one of those factors. I have to tell you, I originally started putting in numbers for actor pay, but when I got done with all the other numbers in the financial plan, I went back and revisited the whole thing again.

              You have to look at more than just the ratio to income, as is being suggested. I can recommend a good BizPlan for you with these financials. Cost is about $18 and you have to stay on top of them because their server apparently isn't delivering when you pay, but the plan I got was worth the $18 (although all the industry numbers were from 2010).

              Check out TheFinanceResource.com for a Haunted House Business plan. The Excel spreadsheet is great for us haunters.
              Travis "Big T" Russell
              President
              Big T Productions Inc

              Owner and Operator of "The Plague" and "Camp Nightmare"

              Customer Quote of the year: "Damn, I pissed myself"

              Comment

              Working...
              X