Office Hours with Lee and Nic (Paying GMs)

Implement an 'on target earnings' (OTE) model for general managers to clearly link their performance to potential pay, fostering motivation and transparency.

Utilize a compensation spreadsheet that outlines base pay, revenue targets, distributable cash, and bonus percentages, allowing managers to see their earning potential based on business performance.

Define clear distribution thresholds based on average monthly revenue (e.g., three-month rolling average) to ensure healthy cash flow before distributing profits, avoiding business instability.

Collaborate with general managers on setting revenue targets and bonus structures; allow them input into the numbers to encourage ownership and commitment to financial goals.

Consider the business's growth stage: the discussed OTE model is ideal for established, profit-mode locations (e.g., 800k+ annual revenue), as growth-mode businesses may require different incentive structures.

Be transparent about potential fluctuations in bonuses due to seasonal downturns or reinvestment (e.g., Q1 for spring prep), emphasizing long-term performance for consistent payouts.

Align manager compensation with your business model; for Augusta's standard (one GM, under $1M), focus on distributable cash. For more complex 'GM Plus' models, adjust distribution percentages across multiple managers (e.g., sales, ops) to reflect their specific contributions.