{"id":42905,"date":"2020-10-21T08:00:15","date_gmt":"2020-10-20T23:00:15","guid":{"rendered":"https:\/\/norimen.net\/wordpress\/?p=42905"},"modified":"2026-05-17T12:08:12","modified_gmt":"2026-05-17T03:08:12","slug":"whether-the-company-makes-a-profit-or-not","status":"publish","type":"post","link":"https:\/\/norimen.net\/en\/company-profit-or-not\/","title":{"rendered":"Is Your Company Profitable? | Management Analysis"},"content":{"rendered":"

Hello, everyone.<\/p>\n

This is Enta.<\/p>\n

Do the CEOs and representatives of your companies say they're making a profit?<\/p>\n

\"Yay!\"<\/p>\n

Or are you saying, \u201cOn the contrary, I\u2019m not making any money at all! I\u2019m in the red!!!\u201d?<\/p>\n

\"Deficit\"<\/p>\n

So, what do you all think?<\/p>\n

 <\/p>\n

An employee at my friend's company says this all the time, so I decided to write an article about it lol<\/p>\n

I hear the company's president is always going on about how they're in the red, which isn't exactly fun for my friend, who's the one bringing in the work.<\/p>\n

I hear they're saying that even if they get a fairly good price, they still won't make a profit.<\/p>\n

 <\/p>\n

Why do people say it that way?<\/p>\n

Let's think about whether we're actually making a profit or not (just for fun, lol).<\/p>\n

So, we\u2019ll look at each type of business structure one by one and evaluate them based on whether they\u2019re profitable or not.<\/p>\n

 <\/p>\n

1. A company with only human employees (slope stabilization work only)<\/span><\/strong><\/span><\/p>\n

2. Personnel and a complete set of spray equipment<\/span><\/strong><\/span><\/p>\n

3. Personnel, Spray Equipment, and Construction Management<\/span><\/strong><\/span><\/p>\n

4. Construction management only<\/span><\/strong><\/span><\/p>\n

I'll write it something like this.<\/p>\n

 <\/p>\n

1. A company with only human employees (slope stabilization work only)<\/span><\/strong><\/span><\/p>\n

This is a common type of slope.<\/p>\n

Generally speaking, this is a situation where a sole proprietor has started a business and established a sole proprietorship.<\/p>\n

It was like forming one team with a few employees.<\/p>\n

Generally, we take on jobs with teams of three to five people.<\/p>\n

Construction business licenses are almost always registered at the representative\u2019s home or similar location, and there is generally no office to speak of.<\/p>\n

We primarily work as second-tier subcontractors.<\/p>\n

If you submit a safety report, you can work at any job site. (We already have many regular general contractors.)<\/p>\n

\"Artisan\"<\/p>\n

The advantage of this type of company, which operates solely on a contract basis, is that its operating expenses are very low.<\/p>\n

Fixed costs include employee salaries and office expenses (which are incurred even if you live there).<\/p>\n

Plus, there are operating costs. Operating costs refer to the expenses incurred in running an organization, such as transportation costs.<\/p>\n

There are no other charges.<\/p>\n

Well, if I had to pick, I'd say a small generator and a hammer drill.<\/p>\n

It\u2019s long been said that if you\u2019re going to work as a slope contractor, all you need is a small generator, a hammer drill, and a safety harness.<\/p>\n

Other than that, all you need is your own two hands to do the job.<\/p>\n

\"Cost\"<\/p>\n

Let's consider the costs associated with this approach. (This is just one example.)<\/p>\n

In Aichi Prefecture, the standard labor cost rate used for cost estimates (based on government rates) is 27,600 yen. (Calculated on a per-day basis.)
\nLabor costs: 27,600 yen \u00d7 5 people = 138,000 yen (daily labor costs)<\/p>\n

\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2013
\nActual labor costs: 15,000 yen \u00d7 4 workers + 20,000 yen \u00d7 1 foreman = 80,000 yen<\/p>\n

Expressway Toll: 2,500 yen \u00d7 2 round trips = 5,000 yen<\/p>\n

Fuel cost: 35.00 yen (7,000 yen every other day)<\/p>\n

Vehicle Expenses: 3,400 yen (HiAce 5 million \u00f7 5-year loan \u00f7 12 months \u00f7 25 days)<\/p>\n

Equipment costs: 700 yen (4 hammer drills + 1 generator; total cost of 600,000 yen, amortized over 3 years)<\/p>\n

Total: 92,600 yen<\/span><\/strong><\/span><\/p>\n

\n

 <\/p>\n

The difference compared to receiving payment based on the labor cost rate (excluding social insurance) is per day<\/p>\n

138,000 yen \u2013 92,600 yen = 45,400 yen (33%)<\/p>\n

That said, there are other hidden expenses involved, so I think the actual figure is around 20 percent.<\/p>\n

 <\/p>\n

Assuming there are 260 working days in a year,<\/p>\n

260 days \u00d7 27,600 yen (138,000 \u00d7 20%) = 7,176,000 yen<\/p>\n

Looks like there's still this much left, lol (though I don't know if that's right, lol).<\/p>\n

*Since the actual amount includes social insurance premiums, I think the unit price is actually a little higher.<\/p>\n

 <\/p>\n

If it were a company that operated solely on a contract basis in this manner, one would have to say it is profitable.<\/p>\n

However, this applies only when the work is performed by regular employees.<\/p>\n

If this were to become a contract job, the 20% gross profit margin is expected to fluctuate between approximately 10% and 25%.<\/p>\n

Even so, I don't think we'll end up in the red\u2014almost never, anyway. (Based on experience.)<\/p>\n

If we end up in the red, it\u2019s usually because of unexpected issues that arise during contract work; however, since we typically work with only one or two general contractors, we\u2019re usually able to work things out through discussion.<\/p>\n

 <\/p>\n

However, I don't want you to get the wrong idea: a company needs to make a profit.<\/p>\n

Engaging in economic activity means generating profits and reinvesting them.<\/p>\n

We have to make a profit, so we can\u2019t run a deficit. Inefficiency is strictly forbidden!<\/p>\n

For those who rely solely on their own labor, a loss directly impacts their bottom line.<\/p>\n

This means that any team that\u2019s doing its job properly and seriously absolutely must not be allowed to run a deficit.<\/p>\n

Other than that... lol<\/p>\n

Now that I've written this far, I realized I forgot to include office expenses in the amount above (well, if I calculate it as a percentage, it should work out roughly, lol).<\/p>\n

Next time...2.,<\/span><\/strong><\/span>That's right.<\/p>\n

 <\/p>\n

See you later.<\/p>","protected":false},"excerpt":{"rendered":"

Hello, everyone. This is Enta. Do the CEOs or representatives of your companies say they\u2019re making a profit? Or, on the contrary, do they say, \u201cWe\u2019re not making any money at all! We\u2019re in the red!!!\u201d? And what do you all think? An employee at a friend\u2019s company often says this, so\u2026<\/p>","protected":false},"author":2,"featured_media":42909,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_total_topic_count_hidden":0,"_bbp_total_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[58,203,207,290,410,752,2819,3960,3961,3962,3963,3964],"class_list":["post-42905","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","tag-58","tag-203","tag-207","tag-290","tag-410","tag-752","tag-2819","tag-3960","tag-3961","tag-3962","tag-3963","tag-3964"],"acf":[],"yoast_head":"\n\u3042\u306a\u305f\u306e\u4f1a\u793e\u306f\u5132\u304b\u3063\u3066\u3044\u308b\u306e\u304b\uff5c\u7d4c\u55b6\u5206\u6790 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