Show me the money!
In the movie Jerry Maguire, Tom Cruise plays a sports agent who is restarting his career based on idealistic principles that downplay the almighty dollar and promote relationships. The only problem is that the athletes are looking for money. In an iconic scene, Cuba Gooding Jr, who plays an NFL football player, gets Cruise to scream into his phone, “SHOW ME THE MONEY”! As important as money is, most of us don’t have visions of becoming rich and famous, but we do want enough money to live comfortably and enjoy the pleasures of life.
So, an idea came to me, and I did a financial analysis exercise. So much said analysis instead some simple calculations based on official figures. I give six very different but illustrative examples:
1. Architecture studio, the average number of employees is 7. According to the figures from the Ministry of Finance, which are public, that business had revenues that divided by the legal number of hours of an employee shows us that the company invoiced 55 Euro/hour, having an annual profit of 50%.
2. Manufacturing company, the average number of employees is 600. Public figures show us that it had an hourly revenue per employee of 78 Euros and an annual profit of 19.5%.
3. Brand car service, hourly labour rate 275 Lei+VAT, i.e. 55 Euro+VAT.
4. The decent and usual salary (gross) in IT for an employee with several years of experience is 2800 Euros, respectively 23 Euros per hour.
5. Lawyer, 33 years old, Cluj-Napoca, with whom I consult from time to time, 95 Euro/hour, before tax.
6. A chef only works with a minimum monthly income of 1500-2000 euros after tax.
7. The profit is excellent at the architecture office (we usually find such figures in professional services). At the manufacturing company, 19.5% is more than decent, reported, for example, to the European Union. But something else is interesting to see, namely the hourly revenue per employee, that is, how much the company charges per hour, regardless of whether it sells services or products. Or, as much as an IT professional sells his work, being employed, that is, he has no costs with the office, as well, these being supported by the employing company. Or, in the case of the lawyer, a simple calculation shows us that if he works only 20 hours a month, he registers an income of 2000 Euros gross, minus some small change.
I say to myself, fantastic; I am happy for all of them; it means that their work is valued correctly and that both entrepreneurs and employees live decently. My final conclusion is that in Romania, or the city where I live and work, Cluj-Napoca, you can’t live decently with small fees and, most importantly, you can’t keep valuable employees to work with.
Notice to amateurs of “cheap” suppliers and employees.