Why would a business owner expand and hire if he/she can't make more money?

[riderinthestorm]

35. That would depend on some other factors.

The Sno-Cone stand may stand mostly idle from 9 - 12, then its jammed with say 60% of the total customers from 12 - 1 pm when school kids run down to the corner for a treat, then its idle again til 4 when a small after school rush occurs.

So if double the number of customers comes in from 12 - 1, or after school, and one person can't handle those rush hours, then yes, a second part-timer would make sense to handle the increased customers. If the business weren't able to handle all the customers and some were being turned away (lost $$ for the sno-cone stand), then you'd want to be able to satisfy that demand with more staffing.

Again though, the customers would dictate whether more workers would be required.

That said, the economics of it would also factor in - let's say the extra person meant 2 hours of extra labor for the part-timer at $9/hour. You'd have to have enough customers ($$) to cover that extra cost.

Furthermore, suppose you were at a kind of crossroads - the extra part-timer isn't really making you any extra money even while you are servicing more customers. You're breaking even. What to do?

As a small business owner, my thought process would be as follows: good service means repeat business so even while the second part time staffer may NOT be making me any extra money - my customers are happier. Which typically translates into MORE business in the long run.

And if I knew that my fixed overhead costs were going to remain relatively stable? No brainer - hire the extra person.

Voila! More customers = more job creation.