I hired someone in December to take up some of my work load and help
me expand my business. He's done a great job....but my partner's
worried about the flow of cash going out (i.e. the employee's
paycheck). We haven't yet started seeing the extra business income
we'd like to see from our employee. The employee's job is to research
information used in our products, to develop new products, and to help
with marketing.

It's difficult to estimate any impact he may have on sales of old
products. However, if I look at new products that he has been
responsible for, I can see that we've earned back about 20% of what
we've invested in this employee over the 3 1/2 months we've had him.

Obviously, at this point, we're spending more on him than he brings
into the company, and I expected that since the new products have only
been on the market for about 8 weeks. However, I'd like to know when
this might be expected to reverse. Are there statistics that will let
us decide how long this employee needs to "prove" his worth?

Thank you.

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Request for Question Clarification by cynthia-ga on 19 Mar 2006 14:17 PST

Have you shown the employee these figures, and asked him to project
sales further out for you?

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Clarification of Question by yellowcheshire-ga on 21 Mar 2006 11:54 PST

I have not shown our employee these figures since I don't want him to
worry. At this point I'm just trying to learn what's considered
"normal". Thanks.

You also need to take into account the value of /your/ time that he has freed up.

The answer to your question is: 'as long as a piece of string'

But if you keep a careful eye on the books, you should get a pretty
good feel for the situation.

It really depends on the product you are selling and the markets you
are selling to, but a sales cycle can be up to 1-2 years in many
markets. That is, work done today will not produce tangible results
until 1-2 years from now.  Your expectation of seeing any return in 8
weeks is extremely unrealistic.