The extra work is worth 0.4 of a person. The smallest hire available is 1.0.

Demand grows in fractions and capacity arrives in whole people. The gap between the two explains more margin volatility in small firms than pricing ever does.

By Steve 5 min read
Abstract bridge artwork for The extra work is worth 0.4 of a person. The smallest hire available is 1.0.

A nine-person team is running hot. Not dangerously, but consistently: quotes go out a little late, one person is always the bottleneck on a Friday, and the founder has started doing delivery work again. The honest estimate of the shortfall is about fifteen hours a week. The smallest unit of capacity anyone can actually buy is a full-time employee, who costs about eleven per cent more payroll and delivers, once settled, about eleven per cent more capacity against a shortfall of roughly four per cent. So the firm waits. It…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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