A business shifting 20% of profit to more labor would

[jmowreader]

5. Two things have to happen for this to make sense

First, sales have to increase.

And second, product lines have to expand.

One cardinal rule of business: you never, ever add workers without a good reason for it. It sounds nice to say "all companies should add 20 percent more workers," but if the workers you have now are enough for your business, adding employees is a waste of money. Sad but true.

To make sales increase, you've first got to have a long soul-searching session. Are your sales low because you don't have enough people out there selling, because you sell things people don't like or because there are things people want to buy from you that you don't make? (This last one breaks two ways: if you can sell X number of items but don't have the production capacity to make that many, or if you could sell certain objects if you made them at all.)

If you've got a shortage of sales staff, then the cure is easy: hire more of them. Sales staff work on commission so they pay for themselves.

If you sell unpopular items, introduce popular ones to take their place.

And if you aren't making things people want to buy, start.

When I worked retail a day didn't go by that someone told me they'd buy huge piles of (insert name of item) if only we sold it. At the same time, we had shelves full of (insert name of item) we had 400 days of supply worth because a store on the other side of the country sold this thing faster than they could get it, and "let's send them all of this shit and get something people will buy in its place because snow shovels and arctic faucets don't sell in the deep south!" falls on deaf ears.