Revenue per employee
It’s always fun to think about how much money others are making in the WordPress world. We want to know what business models are working, what business models aren’t working, and generally get an idea how successful various commercial properties are performing.
Okay, maybe I’m more interested in these things than most people. It’s part of what fascinates me. I love the entrepreneurial stories I hear. Sometimes, it’s easy to get stuck on how many people work somewhere, or how much someone makes. A metric that is probably more valuable than either is revenue per employee.
Copyblogger Media is pretty transparent with revenue. They recently shared that they surpassed $10 million in yearly revenue for the first time. I saw a press release and now a podcast where they cite themselves as an “8 figure company.” On Hack The Entreprenuer, Copyblogger Media CEO notes that they also have around 45 employees.
$10 million is a decent chunk of change no matter how you swing it, but knowing the number of employees really helps start to get a better idea of business health. With 45 employees, that means their revenue is a bit more than $220,000 per employee.
Revenue per employee is still a feisty metric, as costs vary by company. But in most digital companies, $220,000 is a decent amount of money per employee. Even if we say their non-salary costs are 40% of revenues (affiliates, taxes on profits, hardware and software, events and travel, etc), it’s still $130,000 per employee.
I use Copyblogger as an example purely because the numbers are easy to work with, and they shared them. There are a lot of factors that go into determining profits and losses, but if I had to guess, I’d say their profit margins are pretty healthy.
If you’re setting goals for growth, you can set goals for revenue, or employees — but I think it’s smarter to set goals for revenue per employee.
I know this is a bit of a sidebar. Welcome to my world. The rest of that podcast with Brian Clark is pretty good, by the way.