- Does profit sharing solidify teams?
- What are the biggest benefits of profit sharing?
- How much should I share?
- How much is too much?
- How often should I pay out profit sharing?
Keep scrolling for all of the answers. AND…if you haven’t listened to the last episode How To Implement A Profit Sharing Plan, give it a listen.
Tamarah asks, “Will profit sharing solidify my team?”
When it comes to profit sharing solidifying a team, the answer should be no.
How To Implement A Profit Sharing Plan explains a lot of this…we don’t want to base how solid our team is on how much money we give them. We want to pay them a great salary for doing what we expect of them. We expect a great job from them. We expect them to do their KRAs. We expect that we don’t have to motivate the daylights out of them to get them to do their job.
When we look at profit sharing, we’re looking at extra motivation or looking at above and beyond. They’ve done such a phenomenal job with the KRAs, they’re doing a great job of continuing to push the business…So if they’re doing a great job, then I’m choosing to share of my profits with the team.
So will it solidify the team?
It shouldn’t.
If it does, here’s what’s going to happen…
If giving profit sharing solidifies your team, it’s going to only last for a short period of time and then they’re going to need something else and then they’re going to need something else. They will never be happy. This needs to be an understanding. I’m already paying you for the job you’re doing and you’re doing a great job, but I’m paying you great money. That’s exactly the way it’s supposed to work.
Tamarah asks, “What are the benefits of profit sharing?”
Here are the biggest benefits of profit sharing:
It is a huge motivator because it’s something on top of your team member already doing a great job when they know that you’re already paying them for doing a great job and you give them more money than it’s a great motivator.
It also does a great job of getting your expenses down, because people are watching them now. They care about them. It kind of becomes almost a self policing thing in the building. People turn lights off because they realize, electricity affects our profit sharing. They don’t do waste. They might find better ways, more inexpensive ways to do things and have an eye out for it so that they know that they’re going to get even another piece. Every little piece ends back up in that profit sharing. So for me, those are some of the biggest benefits to profit sharing.
David asks,“How much to share?” “How much is too much?”
For how much to share…
If you’ve done everything else that we’ve already talked about in How To Implement A Profit Sharing Plan, and some of the stuff I just shared right now, than the amount to share is completely up to you. What I like to do is run my net profit out, forecast it for a year, or two years. I like to look at what the net profit should be.
Now, this is again, assuming that you listened to episode one and all the things that you would do before paying out profit sharing. Then take a look at that number and just ask yourself the question, “How much of this do I want to share?” and pick that percentage.
Run the numbers out, do everything else from episode one and make sure that it makes sense to you and then see what’s left over because there’s going to be something left over. If you want to take it home, you can take it home or do something else with it.
So, “how much?”
There isn’t a great or ideal percentage.
It’s whatever works for you. And again, run it out if you don’t have enough. So let’s say, let’s say I’m paying out profit sharing and if I pay it monthly, it’s going to look like $57 and most people’s paychecks that, that just doesn’t work. That’s just because then taxes cut into it. It’s like, “Okay, I could go buy a sandwich. Thanks. That was great profit sharing”. If it’s so low that after taxes, they’re not even going to feel it. Move it to quarterly. If that’s still the same case, maybe go twice a year or go every four months, maybe three times a year or something like that. So for me, I want to get it down to monthly as fast as I possibly can. I want to get it into monthly because now they feel it every single month.
“How much is too much? “
As a business grows, you have to get to a place where you can digest paying people a lot of money out of profit sharing.
What do I mean? If you’ve done a great job making sure all of your team members are up to market or better on what you would pay for that role, then how much of their income are you willing to pay out of profit sharing?
So let’s just get crazy here and just imagine…what if you were making so much net profit that you’re paying out 50 percent? What if the amount of money you were paying on profit sharing equaled 50 percent of what they take home? So let’s say you’re paying somebody $40,000, they’re doing a great job and they’re up there on the high end of what the market rate would be for that role. Would you be willing to pay $20,000 in profit sharing? Is that doable for you? Because if you are, what does that mean that you’re taking home, right? What does that mean that the business is making? So for me, that’s where you’ve got to scale this stuff out and ask the question, when do you stop paying them a profit sharing? Do you put a cap on this or what’s the percentage amount? Some people might even go up to 100 percent.
It’s very possible. So if you’ve got somebody making $50,000 in there, they’re kind of capped out by market rate year on the high end of their market rate.
Would you be willing to pay them $100,000 total because profit sharing is so good?
The only way you can answer that question is, well, if I’m paying them that much, how much money is hitting the bottom line? I mean, it must be ridiculous numbers that I’m just taking home so much money, I can’t do enough with it. So that’s how I kind of get to the how much is too much. Make sure that the percentage continues to work with you, but then take a look at what the percentage is at the end of the year compared to the amount of money that they’re making as a salary. Compare those to say, “Hey, as a company, we’re willing to go this far and that’s it.”
It’s completely up to you. It’s whatever you can you can digest at the time. Keeping in mind if you’re able to pay out that much, does that mean that you are making insane amounts of money on the bottom line? So on top of that, also ask, does the person have the ability to make their own money? Can they set their own destiny? So in other words, is it a salesperson who has the chance of making a million dollars? If so, I’m not paying out profit sharing to this person. They’ve got a great opportunity to go make money. Let’s pay this out to more of the administrative folks and those people that don’t have the opportunity to set their own destiny.
Here’s where I get technical and specific…
Eric asks, “What I’d like to know, and I’ll explain this to you, we are in one business that does manufacturing and building materials. We do packaging and shipping of building materials and we have accounting and several other areas of business too. I would like to reward three different departments in a consistent way, manufacturing, accounting, and the shipping department.”
My in-depth answer at 12:33
Resources:
7 Simple Ways To Foster Great Communication On Your Team
What Should You Do With Profits?
Keys to Leading Yourself Better
Full transcript below:
How to motivate your team with money, part two of our profit sharing series coming up right after this.
Welcome to the Chris LoCurto show, where we discuss leadership and life and discover that business is what you do, not who you are.
Welcome to the show. Today we are talking again about how to use money to motivate your team. And if you have not listened to part one, go back, and get it. You’re going to want to listen to that. So go get that information. Come listen to part two. Today I’m answering questions from you guys about profit sharing. So we’ve got a couple that are coming in here and we’re also going to have somebody live on the show as well. Uh, but I wanted to tackle some of these questions. The first question I’ve got comes in from Tamarah West and the question that she asks is, “Will profit sharing solidify my team?”
So here’s the thing, Tamarah. And by the way, thank you for swinging by the building. Tamarah was down in Tennessee a couple weeks ago and she swung by and graced us with her presence. And that was very nice to have you here. Tamarah, when it comes to profit sharing, solidifying a team, the answer should be no. We don’t want to base, and again hopefully you guys listened to the first episode, which will explain a lot of this as well, we don’t want to base how solid our team is on how much money we give them. So again, let me just kind of hit what I hit on the last episode. We want to pay them a great salary for doing what we expect of them. We expect a great job from them. We expect them to do their KRAs. We expect that we don’t have to motivate the daylights out of them to get them to do their job.
When we look at profit sharing, we’re looking at extra motivation or looking at above and beyond. They’ve done such a phenomenal job. They’ve done such a great job with the KRAs, they’re doing a great job of continuing to push the business… in my world to change more lives. In a lot of Y’alls worlds, to make more money, to make more bottom line. So if they’re doing a great job, then I’m choosing to share of my profits with the team. If I’m in a place where I can do that, you know, some people don’t have enough money to share profit. So will it solidify the team? It shouldn’t, because if it does, here’s what’s going to happen. If giving profit sharing solidifies your team, it’s going to only last for a short period of time and then they’re going to need something else and then they’re going to need something else.
They will never be happy. This needs to be an understanding. I’m already paying you for the job you’re doing and you’re doing a great job, but I’m paying you great money. That’s exactly the way it’s supposed to work. This is something I’m choosing to do on top of that. So that’s the first part of Tamarah’s question. The second part she asks is, “What are the biggest benefits of profit sharing?” Now, if somebody is already getting a great paycheck and they know that and they’re doing a great job and you choose to give them more money, it’s a great motivator. It’s a great motivator when they understand exactly how that profit came to be. Hey, we busted our butts, and so because we’ve busted our butts and it doesn’t mean just on creating more revenue, but watching expenses, all that kind of fun stuff because we’ve done that, now we have more profits and that’s something that every leader needs to explain to their team.
When profit sharing comes out, one of the things that Dave does over his place is every single month onstage in front 800 people, he will say, “Hey guys, profit is made, one income goes” and everybody yells out “Up!” and expenses go… and everybody yells “Down!” And that’s how profit is made, right? And because they have to understand, you are making this happen. If you don’t do this, if you don’t bust it, if you don’t watch expenses, if you leave lights on, if you don’t watch loss on jobs, if you don’t, then guess what? You don’t get as much money in your profit sharing. The more you do the more I’ll pay out because there’ll be more profit for me to pay out.
So for me, biggest benefits are A) it is a huge motivator because it’s something on top of your team member already doing a great job when they know that you’re already paying them for doing a great job and you give them more money than it’s a great motivator. It also does a great job of getting your expenses down, because people are watching them now. They care about them. It kind of becomes almost a self policing thing in the building. You know, people turn lights off because they realize, you know, electricity affects our profit sharing. They don’t do waste. They might find better ways, more inexpensive ways to do things and have an eye out for it so that they know that they’re going to get even another piece. Every little piece ends back up in that profit sharing. So for me, those are some of the biggest benefits to profit sharing.
So next is a question from David Lukins. David has two questions as well, and he says “How much to share?” and “How much is too much?” So David, great questions. For how much to share…If you’ve done everything else that we’ve already talked about last episode and some of the stuff I just shared right now, than the amount to share is completely up to you. Take a look. What I like to do, is run my net profit out, forecast it for a year, two years. I like to look at what the net profit should be. Now, this is again, assuming that you listened to episode one and all the things that you would do before paying out profit sharing. Then take a look at that number and just ask yourself the question, “How much of this do I want to share?” and pick that percentage.
It may be, if you’ve got phenomenal net profit, it might be a smaller number. If you have a little bit of net profit, it might be a bigger number, so just kinda depends on what you want to do. Run the numbers out, do everything else from episode one and make sure that it makes sense to you and then see what’s left over because there’s gonna be something left over. If you want to take it home, you can take it home or do something else with it. So, “how much?” There isn’t a great or ideal percentage. It’s whatever works for you. And again, run it out if you don’t have enough. So let’s say, let’s say I’m paying out profit sharing and if I pay it monthly, it’s going to look like $57 and most people’s paychecks that, that just doesn’t work.
I’d rather pay that out quarterly, moved to a quarterly. And so at least it looks a little bit better. It’s, you know, it’s up in the $160, $170 range, or maybe it’s a couple hundred dollars. So that is actually better. It doesn’t look like the whole thing just got eaten up by taxes. So look at it kind of that way, but also, take a look at how much you’re paying them at the end of the year. What is, what’s the number coming out to, which leads into your next question, which is, “How much is too much? “Again, that’s going to be a personal thing. I feel like as a business grows, you have to get to a place where you can digest paying people a lot of money out of profit sharing. So in other words, what do I mean? If you’ve done a great job making sure all of your team members are up to market or better on what you would pay for that role, then how much of their income are you willing to pay out of profit sharing.
So let’s just get crazy here and just imagine…what if you were making so much net profit that you’re paying out 50 percent. What if the amount of money you were paying on profit sharing equaled 50 percent of what they take home? So let’s say you’re paying somebody $40,000, they’re doing a great job and they’re up there on the high end of what the market rate would be for that role. Would you be willing to pay $20,000 in profit sharing? Is that, is that doable for you? Because if you are, what does that mean that you’re taking home, right? What does that mean that the business is making? So for me, that’s where you’ve got to scale this stuff out and ask the question, when do you stop paying them a profit sharing? You know, do you put a cap on this or what’s the percentage amount? Some people might even go up to 100 percent.
It’s very possible. So if you’ve got somebody making $50,000 in there, they’re kind of capped out by market rate year on the high end of their market rate. Would you be willing to pay them $100,000 total because profit sharing is so good. The only way you can answer that question is, well, if I’m paying them that much, how much money is hitting the bottom line? I mean, it must be ridiculous numbers that I’m just taking home so much money, I can’t do enough with it. So that’s how I kind of get to the how much is too much. Make sure that the percentage continues to work with you, but then take a look at what the percentage is at the end of the year compared to the amount of money that they’re making as a salary. Compare those to say, “Hey, as a company, we’re willing to go this far and that’s it.”
It might be this percentage, this percentage or maybe 100 percent. It’s completely up to you. It’s whatever you can you can digest at the time. Keeping in mind if you’re able to pay out that much, does that mean that you are making insane amounts of money on the bottom line? So on top of that, also, one of the things in, and nobody’s asked this today, but one of the things I look at is, does the person have the ability to make their own money? Can they set their own destiny? So in other words, is it a salesperson who has the chance of making a million dollars? If so, I’m not paying out profit sharing to this person. They’ve got a great opportunity to go make money. Let’s pay this out to more of the administrative folks and those people that don’t have the opportunity to set their own destiny. So great questions, David. So glad you asked those questions. Up next is Eric Stoll. Eric is with summertown metals and Eric is with me live. Eric, welcome to the show.
Hey Chris. How’s it going?
Oh, it’s going well, man. How about yourself?
Doing good. I’ve been looking forward to getting your brains picked on this issue here. The situation I’m in.
Good, good, good. You just came. You just joined our Next-Level Mastermind group. Just came from the Next-Level Leadership Live Event, you’re plugging away at the beginning lesson of killing the leadership crazy cycle. How’s that going?
Well, it’s a lot of work, a lot of focus, a lot of intensity there. And I have to remind myself that I signed up for this and I’m paying to have it done. So I’m gonna stick with it and enjoy the results of it.
What results have you seen so far?
Oh, me. The results… I’m getting focused, I’m getting focused on my goals and it’s, I’m just now discovering how scattered that I have been, you know, and how I have not consciously pointed myself in a direction as far as my own personal life or my business.
I believe you’re in the middle of Love, Hate Delegate. Has that had any good impacts for you yet?
It has, and one thing to keep in mind, I believe on that, is that while you’re implementing that, sometimes your workload actually goes up for a little bit while you’re training other people, but the longterm results are going to be amazing.
Have you been able to get anything off of your plate?
Yeah, yeah, I’ve got somebody that stepped in and uh, he was stocking. I’ve also taken it a step further stocking inventory and now he’s ordering the inventory for me and maintaining inventory so I don’t have to deal with that anymore.
How much does that, how much does that save you?
That saves me probably 45 minutes a day in labor and then it probably saves me about an hour in making up for mistakes that I made when I wasn’t doing the job right.
So just brand spanking new to the program. Obviously it’s causing you more time, but it saves me about an hour, 45 a day. That’s pretty fantastic.
It’s going pay off. No doubt.
That is good. That’s good to hear. Well you have some questions about profit sharing, so hit me with those.
What I’d like to know, and I’ll explain this to you, we are in one business that does manufacturing and building materials. We do packaging and shipping of building materials and we have accounting and several other areas of business too. I would like to reward three different departments in a consistent way, manufacturing, accounting, and the shipping department.
Okay. Now question is, let me start with this is. So obviously you have net profit. That’s not, that’s not an issue. You have money. You want to share it. So I want to point the, an issue, the people that are listening. Again, let me point you back one more time to the first episode. You got to answer the first stuff on the first episode so that you can do the things where Eric is right now. So you have net profit. I can see where manufacturing and possibly shipping. Are those broken out P&Ls?
No, they’re all the same thing.
Okay. So everything’s in one P&L. So for me. So if those were broken out, I would pay those as divisional profit sharing. I would put a value basis on it. So for me, the place I’m going to go to, since we’re, taking all the money off the same bottom line. This is all in the same group making all this happen. Just different areas wanting to pay this consistently. The first question I would ask is, what do you guys value most in the business when it comes to team members? A couple of things I shared on the first episode was, for me, I highly value longevity because if you’ve been here a long time, that means that I’ve not let you go. That means that you’ve done better than normal. You’ve continued to grow year after year because if you don’t, it’s very difficult to stay here. You know, people will actually rule themselves out if they don’t want to work and take care of people like we do at the level that we do. A second thing is, for me, I’m really big on personal attitude, as a leader of the area. So I’ll have my leaders tell me how well team members are doing, how’s their personal attitude? How are they taking care of the internal client? How are they taking care of the external clients? You know, what are the things that they’re doing? And then for me, I added even more because I’m a Christian and in my businesses is this is God’s thing. It’s based on him. The stuff that we actually teach is based on the Bible. So for me, I will even take it a step further. I want to see how much you are loving people. We’re called to love people. So it’s very difficult for a lot of businesses to even talk about something like this. But for me it’s easy. You know, how well are you loving people when they come, when our clients come in, what do you do? I want to watch, I want to see how you take care of them. Do you love on them? If they’re struggling with something, do you do lean in their direction?
You know, how are you taking care of our vendors? You know, sometimes vendors are a pain in the butt to work with. Are you loving on them and taking care of them? So that’s another actual part of that that I look at, and then you know, like I said, you could, if you had divisional profit, you could look at the different divisions. Those are some basic things that almost every business can come up with. If you just take the first to have longevity and personal attitude. Are there other things that you guys look at the team members and you say, we highly value this. We would want to give profit sharing, extra money, our extra money. We would want to pay it out because of this.
To me and I hope this answers your question. The reason for the profit sharing is to create and an environment where they feel like they can control their wages. Basically the better each of these leaders do, they will enforce new rules among their men that will step production and step productivity up on a whole new level. We’re making good money were making good money, not afraid to share it.
So how I would look at that is, is I would look at it on the productivity side. So I would put some metrics around productivity, so it could be something like, you know each, there’s a percentage, there’s an extra point. So let’s say, let’s say I give a point for every year that you’ve been with. So if you’ve been with me for five years, you get five points there. Let’s say I’ve got a grading scale on your personal attitude that’s from one to five or one to 10 or one to six, whatever it is, but let’s just say it’s one to five in three is better than normal. So you get a three because you’ve been doing a great job, you’ve got a score of eight so far. So then the other piece comes into that productivity. I would take a look at what is normal productivity.
Now of course this is gonna take you some time to really look through and think through the numbers, but if normal productivity is, let’s say we’re hitting 85 percent of what we could hit. If we were really, really freaking busting it, we could do 100 percent productivity. Let’s just say that that’s the, that’s the goal. But we consistently hit about 85 percent productivity. Well then I’m not going to give any extra money for doing 85 percent. That’s great. That’s what we should be doing. I’m paying a salary for 85 percent right now. There’s a lot of people out there going, well, aren’t I paying a salary for 100 percent? Technically, yes you are. But there’s a lot of factors that keep you from hitting that 100 percent. So if you’ve ever been in a business like yours, you know, for folks that are listening, then you kind of understand that productivity getting 100 percent, is difficult sometimes.
However, incomes the incentive, right? So how do we get them from 85 to 90? Well, maybe there is a point in an area. So let’s say shipping has productivity metrics. Accounting has productivity metrics. Manufacturing has productivity metrics. So if we put numbers and say, listen, you’ve got to be this productive and they hit that number, then maybe in that area they get an extra point. So maybe 90 percent productive gives them a point, maybe 95 percent productive, gives them two points or three points, you know, maybe they’re up to a three. If they hit 100, man, maybe it’s a five pointer, whatever. So let’s just say that we did something like that and there are 100 percent productive and we can measure that, so they get a five. So the person that’s been there for five years already has a five, then they’ve been great personally.
So they get a three added onto it. So now it’s an eight. Man this month or this quarter, depending upon how you pay it out, they hit 100 percent productivity, they get a five, another five pointer they’re at a 13. So if those are the three things that we value most, this person now has a 13 where somebody else may have a seven and somebody else may have a two because they’re brand spanking new, which they should at least have a three. And somebody might have a 15, when you look at those numbers, those are all, you know, you’re going to have to work with the numbers and figure out what feels right, what looks right. But what I like to do is run all those numbers. Of course I’m in excel, I have very little c, but I’m an excel freak when it comes to stuff like this because it’s a great tool that I can use.
I like to run them all down and then dump in the amount of money I’m wanting to pay out and see how it spreads out among the all the team. All three areas. See all three different areas. Now you can keep these separate. I wouldn’t, I’d have everybody in one sheet because you’re taking the net profit from one and they’ve already got their numbers according to their department. You may have to have them separated on the sheet by department because it gives her department score. I don’t even know if you have to do that anyways, just mess with it. Once you dump that number and let’s say we throw 10 grand into the top, how does that shake out by 25 people? What do those numbers look like in? Does it seem right? What you’ll find is…You might be like, yup, I really believe that Frank over here should get paid this amount.
When you know Gloria is brand spanking new and she’s getting this amount, I feel really good. The spread looks good. It’s working out. If it feels right and it looks right, then you need to scale the daylights out of it. What if we did $20,000? What if we did $30,000? What if we did a $100,000 in net profits? You know what? If we only did $2,000, that’s going to help you to really look over those numbers and see if your scale is still feeling good, if it’s still what you want it to be. So lot of information, questions, thoughts, comments?
First question. So basically what I’m gathering from you is the principle of rewarding above average performance?
Yeah. Yeah. I don’t have a problem with you rewarding average performance, but I really believe you’re already doing that with the paycheck. So for me, we’re already paying you to do average or for me, I always tell people above normal I want, I want above normal, but for well above that I will incentivize even further. So for me, I’m always going to try and make sure that they’re at least at market rate or above for the role that they’re doing, so that should already get paid out for that. I don’t believe in using profit sharing in that area. Some people like to use it as an incentive to say, well, let me give you a lower salary, but they don’t have the control over the 12 people in shipping that aren’t doing a good job.
So if they’re not doing a good job now I’m not getting my salary because so much of my salary is based on profit sharing. Well that’s not fair. So for me, I like to have the salary done. I’m paying your salary. This is above and beyond. Let’s kick it up again. Let’s take, let’s take productivity up because you’re now making more money, but it’s not just on productivity, it’s also on expenses. So hey, manufacturing… your loss, last month was at eight percent. We had an eight percent loss. I don’t know what you guys have as a percentage of loss. What’s an average month? Do you guys know?
it’s gonna be about five percent of manufacturing.
So hey guys, last month we had a seven percent loss. Guys, here’s what I need you to understand that just hurt your profit sharing, because that extra two percent that just killed you. So now our profits are down. So you’re not getting that because we had a higher loss. If you get to a month where loss is three percent “Guys way to go, look at this!” “Hey, shipping and accounting, manufacturing’s losses are down. They’ve saved us an expense. The loss is down three – guys that’s going in to your profit sharing. Way to go!” Celebrate the daylights out of it. When shipping does a great job when they’re cutting expenses, one accounting is finding things and you know when all of these things are happening and it’s affecting the bottom line, celebrate the daylights out of it so that they can see, okay, we are truly impacting our own destiny here. We can make more money if we want to make money. Does that makes sense?
Does I’ve got one more question for you. Do you recommend splitting up the profit sharing check monthly or quarterly and if one above the other why?
So here’s how I always base it. How much is the profit sharing check going to be on their check monthly? If it’s $57, don’t do it. That’s just because then taxes cut into it. It’s like, okay, I could go buy a sandwich. Thanks. That was great profit sharing. If it’s so low that after taxes, they’re not even going to feel this thing. Move it to quarterly. If, and for other people that are listening, if it’s not even good there maybe go twice a year or go every four months, maybe three times a year or something like that. So for me, I want to see, I want to get it down to monthly as fast as I possibly can. I want to get it into monthly because now they feel it every single month. Well, no less than monthly. There’s no two weeks or anything.
It’s on a monthly basis. For me, I close out the previous month and then I will pay it out on the 15th so that they get it on the next check, right? No, I’ll probably pay it out on the end of the month. Because if I’m paying commissions out on the 15th then I’ll probably pay it out in the end of the month. So for me, I want to make sure that when they see that profit sharing number on their check, it feels great. It’s incentivizing. If they look at it and after taxes it’s $32 that’s not exciting. I don’t really care about trying to keep loss down. If I get 32 whole dollars. Now if I look at it and it’s in the hundreds. Oh, well that’s nice. That feels good. Let me, let me do it again. Let me work harder.
Hey guys. The more we do, the more of this number is going to keep climbing and celebrate and celebrate and celebrate, and then when they don’t do good, not kick it down. You know, make sure you don’t have a choice. If you’re working off of the same percentage, it will drop it down because net profit obviously dropdown, but call it out, “Guys we didn’t have as much profit last month and here’s why. We had too much loss here. We shipped to the wrong country…whatever that is, we didn’t look at our expenses, that hurt us. So let’s make sure we’re watching those things. It’s going to benefit your profit sharing.” Makes sense?
It does. Thank you.
Absolutely. What other questions?
I think that’s it. That’s given me a lot to work on and think about and definitely implement some new things.
Good. Excellent. Excellent. Well, obviously you’re, you’re in the group, so if you have any more questions, make sure you hit us back up on that. We’d love to have that, but thank you so much for coming on the show and ask him the question and will we get to see you at the next retreat?
Yeah, we’re absolutely gonna be there. There’s two of us from our company that are members. So you’ll see a total of four of us I believe.
Fantastic. Well, we’re looking forward to it. We’ll see you guys in a couple of weeks then.
Thanks Chris. We’re looking forward to it.
Absolutely. So folks, there you go. A lot of information. Um, there’s so many things I left out some point I need to make a much bigger lesson on this. Another thing is folks in leadership never share the percentage. Don’t tell the team, doesn’t get to learn this, because there may be things that you make adjustments on in the future. So if all of a sudden you made a bad profit sharing plan and your calculations are now hurting you, you may have to make some adjustments. So also if you tell percentage numbers doesn’t take long for somebody to back into your numbers what your net profit is, and unfortunately what that will do is that will create…somebody who doesn’t know how to digest the numbers about business because they don’t understand a P&L, they will make a ton of assumptions that can hurt you.
So just don’t do that. Make sure that you know what you’re doing, make a decision on the percentage, pay it out, but that doesn’t get shared with team members. So always be celebrating when you’re winning. Celebrate, celebrate, celebrate. If you’re winning, then celebrate “Guys, because you did great we have more profit sharing.” If profit sharing is down, make sure that they know why. You know, if possible, without pointing a person, if one person screwed it up you don’t want to be pointing out that one person but say, “Hey, profit sharing is down because we had more expenses this month. You know, and so guys do a better job next month and your profit share and we’ll go back up.” So folks, I hope this answers your questions on profit sharing. Send us your questions. We love having you ask questions on stuff like this. It can be about business, leadership, life.
We’ve had people ask about KRAs, key result areas, how to manage their time as a leader, when to launch their side business, how to turn around negative cultures. All of those questions, boundaries, hiring, firing, overwhelm, accounting, any of that kind of stuff. It doesn’t matter what it is, if it’s business, if it’s leadership, if it’s life, feel free to email us at [email protected]. And we will try and get your question on a future episode and we check that inbox every. So don’t be shy. Feel free to send something in.
As always take this information, change your leadership, change your business, change your life. By the way, you know somebody else who needs to hear this episode, tell them about it today and join us on the next episode.
