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Calculation of personnel costs in the business plan: this is how it works

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In the start-up phase of a business, many building blocks are set that are essential for a stable business foundation. Anyone who makes mistakes here quickly risks the future of their startup. And: As the successful entrepreneur knows, a company cannot develop further without capable employees.

Anyone who hires employees as a founder must of course also think about their payment. Anyone who becomes an employer is faced with a completely new calculation obstacle: personnel costs.

Personnel costs are not only a significant cost factor, they are also often underestimated. Think carefully about the human resources you need. Also plan for the growth of your company and the consequent increase in staffing needs.

It is best to create it in financial part (Here tells how to do it) of your business plan a detailed staffing plan for the first five years and lists in detail

  • all employees
  • in their function e
  • with their wages or salary
  • social security contributions paid by the employer.
Personnel costs for all employees should already be calculated in the business plan. © Pixabay

What are the costs?

Personnel costs are reflected in total costs. These ensure a smooth economic action of the company. Even before you think about personnel financing, you should draw up a business plan – you can find out what you need to consider in ours technical article.

The following holds true: costs are not just costs. Because not every investment for your company damages liquidity immediately, but only changes your capital structure.

Realistically, four categories can be distinguished:

  1. training costs: They are the catalyst of a business, because nothing works without them. After a one-time business, they prepare an operation for the free market economy. For example, notary fees, business registration or patents belong to this spectrum.
  2. investments: Expenses necessary as a basis for efficient work are called investments. As a rule, they must be purchased only after the actual start-up and vary considerably according to the type of company. Cars, real estate, furniture or computers are classic examples of investments. At the same time, these costs increase the equity ratio.
  3. Variable costs: These amounts always depend on sales. Sales data mainly indicates what costs are incurred, for example for material, packaging, logistics, etc., and how high they are. Here it depends on the circumstances and the stage of growth in which a company is.
  4. fixed prices: Last but not least, your fixed costs arise from the ongoing expenses for your business: electricity, rent, insurance and personnel costs are prominent examples.
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In business administration the following applies: only when all these costs are deducted from the turnover of a company does a profit come about.

Temporary employees can be hired on freelancer portals at a relatively low cost. © Pixabay

Portals for freelancers: the economic alternative to fixed personnel costs

If you are a startup and cannot or do not want to engage with a permanent workforce, you should bring employees into the team on a project basis. Job portals that place freelancers and student jobs can help you here. On the order portals (here you can find the best project exchanges at a glance) you can publish projects and orders for freelancers – this allows you to remain flexible when it comes to personnel costs and to carry out low-cost activities.

Financial planning already created? The preparation of the financial plan, for example for the business plan, is easier with good templates. A good collection of templates and templates can be found here. To the free business plan templates »

How are personnel costs incurred?

Existence consultants and start-up coaches repeatedly experience that founders do not have sufficient knowledge of what and how much costs an employee actually causes. Personnel expenses should appear as essential components in the business plan from the very beginning which is why you should be involved from the outset should inform about his obligations as a future employer. If you plan your personnel costs incorrectly within your total costs, you will quickly reach your funding limits and seriously endanger the company.

  • Personnel costs are recovered Salary– AND non-wage costs Together. The former are wages and salaries that are paid directly to employees, i.e. wages and salaries. Ancillary wage costs are also paid, which can be found, for example, on the pay slip in the form of a Employer's contribution to social security Still.
  • Also, costs such as paid holidays, Workwear OR travel costs included. In some cases, the employer also includes indirect expenses such as office supplies, cleaning fees or similar. In summary, employees often incur costs that amount to 30-40% of a company's total costs.
  • Between Salary AND Salary there is a significant difference (the explanation is valid Here), which should definitely not be overlooked when calculating personnel costs. While the salary is paid monthly and always contains the same amount, the salary depends on the number of working days and the performance of the employee. For this reason, the salary may vary on a monthly basis.
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How are personnel costs calculated?

An employee's gross monthly salary is not enough. It is always advisable to plan a little more generously to avoid surprises. In any case, these factual and potential aspects must be taken into consideration:

  • Monthly gross salary
  • additional services
  • Compulsory social security contributions (about 21% of gross salary)
  • contributions from trade associations
  • Voluntary special services/tariffs
  • training costs

A statement about long-term personnel cost planning can only be made with the total. In addition, there are of course many other points that a future employer needs to think about. For example, on the legal regulations on the minimum wage (All about the minimum wage 2019: founders now have to take it into account), any subsidies or wage cost subsidies. In the end, you should always evaluate an employee's cost-effectiveness versus the company and whether the funding can be handled. Founders especially need to master this calculus.

Especially in the field of payroll accounting, there are many useful programs that make it easier to calculate personnel costs. We have an overview of the best payroll accounting tools for you: Best Payroll Software Review (2019) »

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