Staff wages are 70% of total income

Good afternoon all,

I have been speaking with a friend of mine that runs a consultancy firm and his business has been struggling this year, never making a profit and his creditors are starting to pile up. He was explaining that his biggest expenses were the wages, they total 70% of his monthly income and after they are paid he hardly has enough to cover the other expenses.

Is it just me or is 70% of total income on wages just unacceptable? What percentage of income should normally be budgeted for wages?

Personally I know that the guy likes to believe he is profitable and likes other people to believe he is profitable, so I wouldn’t be surprised if half the staff were there just for the sake of his ego. He employs about 30 staff members and about 10 do admin and 3 are his P.A’s.