sly control SGA and operations cost. Even for a best-in-class carrier, SGA and operations costs tend to each represent 20 percent of the total budget. One approach is to look at the revenue you expect each employee to gener- ate (in Table 10-5, an industry average of $290,000 per employee a year after a few years from inception). Revenue erosion also needs to be taken into account when calculating the number of emloyees: 1st year 2nd year 3rd year 4th year 5th year Revenue erosion, which drives added new revenue needs Chapter 10 Table 10-4 Operations Facility and SGA and Facility 1st-year 2nd-year 3rd-year 4th-year 5th-year Employee Administration payroll payroll payroll payroll payroll Expenses Engineering Manager $90,000 Engineer Associate Inflation rate 3.00% City Operations Manager $100,000 Supervisor Technician Inflation rate 3.00% Network Operation and Customer Care Manager $75,000 Supervisor Analyst Inflation rate 3.00% Network Planning Manager $80,000 Supervisor Associate Inflation rate 3.00% Technology Manager Engineer Associate Inflation rate 3.00% Manager Programmers Associates Inflation rate 3.00% Practical Design and Economic Parameters Table 10-4 cont. Operations Facility and SGA and Facility 1st-year 2nd-year 3rd-year 4th-year 5th-year Employee Administration payroll payroll payroll payroll payroll Expenses Administrative Executive Administrator Department manager Administrative assistant, bookkeeper, and clerk Inflation rate 3.00% Mktg./Prod. Mgmt./Pre and Post Sales Support Manager Supervisor Team member Inflation rate 3.00% Sales Regional manager Branch manager Account executive Chapter 10 Table 10-4 cont. 1st-year 2nd-year 3rd-year 4th-year 5th-year Facility and SGA payroll payroll payroll payroll payroll Employee Expenses Legal Attorney Inflation rate 3.00% Tax rate 9.00% Benefits 10.00% Insurance 0.27% Employee distribution Average Cost per Employee Manager Supervisor Associate Clerical Total Engineering 0.0137 0.1096 0.8767 0.0000 1.0000 Span: 8 to 1 for all levels In-city operations 0.0137 