Determine Labor Requirements
Plan and describe how many employees and contractors you will need for your first year in business.
In completing this process, you will want to consider the following:
- Your skills and the skills required for your business.
- Your experience and credibility for the products or services you plan to provide.
- Whether to employ or subcontract–consider the Industry standard.
- How many employees or contractors you will engage and what rates you will pay them.
View the Example: Employees and Contractors
Action
We strongly suggest you will complete the Action items for this step directly in the Biz4Caster. From the Business Planner Download menu choose “Start a New Financial Forecast.” If you need guidance in using the Biz4Caster, or installing the Business Planner Download or are unsure what the Business Planner Download is please visit Business Plan Resources for tutorials and help getting started.
To complete this Element you will need to determine how much of the required work you will perform yourself, then:
- Determine the amount of product or service you can create and deliver by yourself.
- Identify areas of knowledge or skill you require and will hire others to do (e.g., bookkeeping).
- Determine whether you will employ or subcontract the additional help needed to fill the gaps.
- Research and clarify hourly or day rates for each position and ensure the availability of each worker.
- Use the Labor Projections worksheet in the Biz4Caster. (If you choose not to use the Biz4Caster, download Worksheet #39 and use it to develop a one-year projection of work days for each employee or subcontractor. Each row is split horizontally to allow for entry of the number of hours in the top half and the total dollar amounts in the bottom half.)
- Here is the process for projecting the amount of wages for each worker:
- Determine what you will use as a unit of pay for employees (monthly, daily, hourly, etc.).
- Calculate how much you will pay each employee per unit, not including the payroll burden (Pension Plan, Employment Insurance, Holiday Pay and Workers’ Compensation).
- Estimate the number of units each person will work for each of the first twelve months of business operation.
- Multiply the number of units each month times the unit rate to arrive at the total labor projection for each worker for each month.
- Enter then information into the appropriate cells of the Labor Projections worksheet. (In the Biz4Caster if you are using or the table you have built if not)
NOTE: We recommend that you complete the Business Plan RoadMap financial forecasting (Steps 54-65) before copying any tables over from the Biz4Caster into your business plan. In Step 65 we will guide you on how to copy your financial information from the Biz4Caster into your business plan.