Part Time staff percentage.. help

[jeffnyehsan]

Hi guys,

I doing small bakery business, sometimes when my orders are full for that week I will call my friend to come and help me do 1 or 2 cakes. I need some advise of how many percent do I have to give him if he help me finish 1 cake by himself using all of my things at my bakery? If I give him 40% and I take 60%, is it okay or its too much?

Thanking you in advance

[Freelancier]

Have you taken the time to figure out how much of your cost per cake is ingredients vs. labor vs. sales costs vs. whatever? It's worth estimating it, so that you can see how much of the total cost his labor is really providing. I think if he's using your materials, your facilities, the results are sold to your clients, 40% seems high. But if you break down the costs per unit sold you'll have a better idea what his labor is really worth in the process.

[MakingItNow]

40% sounds high. How long does it take him to finish a cake and what profit are you getting (roughly) per cake he finishes?

Why do you have to offer him a percent? You can say $XX.XX per this cake, or $XX.XX per hour. That would be easier and keep your profits concealed from him.

[jeffnyehsan]

Hi, thanks for your feedback. The problem is that he is my brother, he dont want price per cake. He want percentage, so is it okay if I give 20%, if 40% is too much? because now he just take the ready cake and do the decorations until complete. he dont bake at all, im doing all the baking. one more question, what does the explanation for sub? he said he want me to sub the cake to him.

[Freelancier]

"sub" likely means subcontract, as in he's not an employee, he's a contractor.

As for 20%... go back to what I wrote. You need to figure out what the right price is for the labor, we're not the closest ones to your numbers, so asking us is just going to get you the wrong answer. Could be 20%. Could be 10%. Could be $2/cake regardless of what you sell it for.

And it doesn't matter if he's your brother. What matters is if the numbers work, because if they don't you're losing money on those cakes he's creating and that's bad for your business.

[jeffnyehsan]

OKay, let say 1 cake is $120, my Cost is $13.60. so how much i can give him?

[Freelancier]

When you say "my cost", what components did you include in that cost? Just the materials or did you also include per-unit costs for labor, overhead, taxes, depreciation, etc.? Basically, you take a year's worth of costs that aren't directly attributed to a single cake and you distribute it amongst all the cakes to determine a per-unit estimate of those costs.

[jeffnyehsan]

My cost that I include is all of the ingredients only. By the moment I work alone and im new to business. Thats why I dont know much about it

[Freelancier]

Ok, but you can still estimate. How much does someone who does what you do get paid in salary when working for someone else? How much in taxes would that business have to pay for that employee? How much does your place of business cost you each month? and so on. Just because you work alone doesn't mean you can't estimate the direct and indirect costs you have.

[jeffnyehsan]

Okay, got it. I will calculate all, thank you so much for your advise. Really appreciate it.