Leveraging Your Labor Force to Drive Profitability

As a business owner, one of your main goals is to drive profitability. Without profitability, you won’t have the cash flow to grow your business, and what’s the point of being an entrepreneur if you are going to run out of money and go out of business?

One of the most effective ways to drive profitability is to leverage your labor force. You can streamline operations and increase efficiency by utilizing your team’s strengths and assigning employees to tasks that align with their skills. Implementing training programs for new hires and existing staff can help ensure that everyone on the team has the knowledge and capabilities to perform at their best.

Utilize Your Team’s Strengths

One of the key steps in leveraging your labor force to drive profitability is to identify and utilize the strengths of each employee. A clear understanding of what each team member can contribute will help you determine which tasks they should be assigned to, ensuring that everyone performs at their peak potential. Having employees work on tasks that align with their skillset will create an efficient and productive workflow for your business.

This can be done in myriad ways, but one of the most important parts is documenting what each role in your business does. If you have a bar manager, ensure they know precisely what is expected, no matter who is in the position. You can’t have one bar manager making the schedule and then a new bar manager not doing that. By documenting precisely what each position’s role is then you can see how each of your team members can align with that role. Remember to create metrics to hold your team accountable for their role, and of course, getting their consent and buy-in to do this is most important.

Training Programs

To maximize efficiency, it is crucial to ensure that everyone on the team has the knowledge and capabilities to perform at their best. One way to do this is by implementing training programs for new hires and existing staff. This will help to bring everyone up to speed on the latest technologies and processes, making them better equipped to do their job. Additionally, training for existing staff can help ensure they stay updated with the most effective practices and procedures.

Designing training programs can be difficult. Be sure to leverage your industry associations like the brewery’s guild, restaurant association, or state cannabis industry association for resources about topics and even actual training sessions. Sending key employees to association conferences is another great way to get the ledge to your team members and provide a way for them to have a good time with their colleagues.

Measuring Labor Efficiency

Once you implement the above tactics, you will need a way to measure their effectiveness. The best way to do that in small businesses is to focus on labor efficiency. The metric we use for this is called the Labor Efficiency Ratio. What this metric measures is how much gross profit is being produced for every dollar of labor spent. We have another blog post that goes into this a little more in-depth but when you do signup with Lord CPAs, this metric will surely be implemented.

Benefits of Leveraging Labor Force

By leveraging your labor force, you can increase efficiency and streamline operations. This will reduce costs and improve profitability for your business. Additionally, having employees work on tasks that align with their skillset will help foster job satisfaction, reducing turnover and creating a more loyal workforce. Lastly, implementing training programs will equip everyone with the knowledge and capabilities they need to do their job, increasing overall productivity.


If you would like to learn more ways to impact your profitability by leveraging your labor force, then it’s time to sign up for a subscription with Lord CPAs. You can get started by clicking HERE