How to Calculate Revenue Vs. Labor

They say that time is money. Nowhere is this more true than in a small business; your time and the time of your employees must be used efficiently to maintain profits. To see if you are being efficient, keep track of your revenues versus labor. You can do this by calculating your revenues per labor hour. Measure this figure regularly and aim to increase it over time.

  1. 1.

    Write down your business' total revenues for the period in question. These can be found on your company's income statement.

  2. 2.

    Add up the number of hours that your employees worked during the same period to get your total labor hours.

  3. 3.

    Divide your revenues by the total labor hours. This will give you the revenue per labor hour.