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welcome to landscape management networks video on employee bonuses and teaching employees how to think and act like entrepreneurs as dan grew his business he needed to hire employees to help him get the work done first his employees were hired to help Dan in the field but as dan grew the business he needed to work less with his employees and more on his actual business the problem was as dan began to work more on his business and turn his attention further to growing this business his numbers started to fall off without Dan in the field productivity decreased mistakes increased and Dan made less money running three crews than he earned when he ran one Dan's first reaction was to turn his attention back to his field production he tried to get back in the field his hands back on managing the work directly but every time he put himself back in the field his paperwork his planning and his sales everything important in his business started to suffer why couldn't dance crews just produce as much work as Dan did when he ran a crew it wasn't long before Dan realized he worked hard because his rewards were based on success he got paid more when the company did well and he got paid less when the company did poorly Dan's employees on the other hand were paid hourly they felt like the faster they worked the less money they'd take home this system was getting Dan and his employees nowhere fast until Dan built a budget with his budget Dan created a plan for profit and not told him what he needed to sell how much he had to spend and how much profit he could expect to earn if he managed according to his plan from his budget he quickly built a pricing system that helped Dan ensure that as long as he hit his sales goals and managed his spending he'd recovered all his company's overhead and desired profit dance sales goal then became his company's baseline for success if he hit his sales goal and he kept his spending within budget his pricing system ensured that he'd recovered enough money for overhead and a fair profit when Dan beat his sales goals then his work became very profitable since his overhead recovery system was based on his sales goal his overhead was technically paid whenever he reached his sales goal any sales over and above the goal didn't need to pay any overhead he could price his jobs the same but what was overhead recovery now gets added to net profit and so Dan got the idea what if he shared some of that extra profit with his people on every dollar over and above his sales goal Dan's company kept its usual profit but what used to be overhead could now be a reward or an employee bonus if Dan's overhead expenses were 25% of his sales then Dan could afford to give back 25% of every dollar over and above his sales goal as a bonus for exceptional employee performance now Dan's Cruz shared in the success of the business if they got through more work in less time they could see big end-of-the-year bonuses but they couldn't sacrifice quality any time spent fixing issues or warranty work meant time spent working but not getting any closer to their sales goals they weren't getting any closer to bonus time the end result was that Dan built a company of employees who started to think and act like Dan did when he ran their crews their productivity improved and with improved productivity came improved customer satisfaction they got more value for their money projects went off with less mistakes and on schedule Dan began to be able to price his work with competitive pricing with productive crews he didn't need to be the cheapest guy on the block because he was the fastest and most efficient consequently Dan's companies had higher profits than any of his competition even though he priced his work roughly the same Dan's employees were happier and in turn dan also began to attract and retain better employees with his great compensation system great employees were attracted to dance business and stuck around they could make more money working for Dan than they could on their own and ultimately all of this led to a happier Dan jobs came in faster more efficiently and more profitably everything dan had been looking for since the day he stepped off his crew if you want to run your company from a plan for profit or if you want to get a system like Dan's working for your employees then watch for landscape management networks plan for profit workshops all across North America in the winter spring of 2011 for more information visit our events page at WWF management Network calm