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THINKING BUSINESS
a blog by Chris Barrow
Writer's pictureChris Barrow

How do I turn a pay rise into a price rise?



"Tesco hands store staff 7% pay rise.


Supermarket’s third pay increase in a year puts it slightly ahead of Aldi and Sainsbury’s."


So says The Guardian this morning (staff working in London Boroughs will receive 8.40%).


We spent 25 years doing financial forecasting on the reliable basis that your PAYE payroll should be 17.50% of your sales (increase to 20% if your hygienists/therapists are salaried).


That KPI is now rising again and across my own client base I'm seeing between 22.50% - 25.00%.


That's coming straight off your bottom line unless you take action.


Time for a reminder - who is going to pay for those pay rises?

  • Team A - you and your family - take less home;

  • Team B - the staff - employ fewer people;

  • Team C - the self-employed clinicians - pay lower hourly rates/percentages;

  • Team D - your suppliers - try and get cheaper lab and materials;

  • Team E - the patients - put your prices up.


IT'S ALWAYS TEAM E - the patients.


Attached is a handy little calculator to transfer pay rises into price rises. It's one of the many spreadsheets, templates and PDFs that we use here in The Extreme Business 100.










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