How Much Should You Really Spend On Your Team?

Episode Summary

In this episode of The Profit Pillar Show, Evolved Finance CEO Parker Stevenson dives deep into one of the most important (and costly) aspects of running an online business: your team expenses. Drawing from his experience working with hundreds of entrepreneurs and from insights in his book Profit Pillars, Parker explains how to evaluate whether your labor costs are too high and how to build a more profitable, financially sustainable business.

He begins by breaking down the four main expense buckets, known as the Profit Pillars, and explains why labor is almost always the biggest variable for online and service-based businesses. Whether you’re hiring contractors, employees, or building an in-house team, understanding how much of your revenue should go to payroll is essential. For most online businesses, Parker recommends keeping labor costs at 20% or less, while service-based firms can sustainably operate at 30–40% depending on their business model.

Throughout the episode, Parker walks through key questions business owners should ask themselves: Are you paying yourself through payroll? Are you hiring too many contractors for one-time projects? Are you overpaying for roles that don’t directly drive revenue? By examining these areas, you can uncover hidden inefficiencies that are inflating your labor costs.

He also highlights how pricing, offer structure, and focus affect your ability to grow. Underpricing your services or spreading your team across too many offers can quickly erode profits. Instead, Parker encourages entrepreneurs to simplify, focus on flagship offers, and build efficient systems that allow their teams to do more with less.

By the end of this episode, you’ll have a clearer understanding of how to evaluate your team costs, what healthy labor ratios look like for your type of business, and where to make adjustments if your expenses are getting too high. Parker breaks down the numbers in a practical way so you can see exactly what’s driving your payroll costs and what changes will make the biggest difference to your profitability.