Boss makes a dime

The cost of doing business

I make a penny, the boss makes a dime. That’s why I shit on company time. - etched in a bathroom stall.

It’s more profitable for the business owner… or is it? Let’s take a look, shall we?

As an example, let’s look at a what a pizza delivery guy profits in a night, and what the pizza owner makes.

Profit is the financial gain a business makes when its total revenue exceeds its expenses.

The pizza owner charges $5.00 per delivery. The arrangement is simple. The driver pays for all the pizzas he delivers, and $2.50 per delivery (half the delivery fee charged to the customer) and pockets the rest as his earnings. The car, gas and hourly labour are at the cost of the delivery driver.

You might think, that’s bullshit. The owner doesn’t pay any expenses and collects all the money for the pizzas and half the delivery fees.

The owner on the other hand has overhead expenses to pay for;

• Rent & utilities

• Phone & internet

• Insurance

• Equipment rental or financing fees

• Advertising

• Franchise fees

• Food, supplies and freight costs

• Dishwasher, cook, cashier, waitress

The owner pays these costs no matter if pizzas are sold or not. The owner must recoup the costs with the profits from each pizza and providing delivery service allows for more pizzas to be sold.

Who has the larger risk? Should the reward be greater if the risk is higher? Would you like the responsibility of managing all the tasks of being an owner?