Minimum wage may soon be changing. Federal law dictates a minimum of $7.25/hr, although many states are higher. Currently federal legislation is now proposing $10.10/hr as the new minimum.
Some states and counties are already ahead of the game. The state of Washington has the highest state minimum wage at $9.32/hr, and the county of San Francisco has the highest overall minimum at $10.74/hr. However, unless your business is located in a high-paying state/county, you may need to prepare for increased payroll costs.
Is your small business ready? A minimum wage increase may constitute a significant strain to small businesses. If your business depends on minimum wage workers, consider these tips to help you get your business in shape before federal, state, or county law increases the minimum wage.
Staying informed about your own business is the key to preparing for changes. Here are suggestions to help you do just that.
1. Analyze your business by reviewing profit margins, projections and business requirements to ensure profitability.
2. Analyze your staffing needs: do you really need to hire a permanent worker, or can you use a freelance worker? When you do hire:
- Make good employment decisions—hiring and training the wrong person can be costly, and the wage increases may give you a smaller margin of error to offset hiring mistakes.
- Invest in your employees to increase productivity and decrease hiring/training costs.
- Analyze and update your prices. Do your research, get to know your competition, and refer back to your business analysis to find the ideal/workable price increase for you.
Keeping your bookkeeping up to date is imperative for you to do your analysis. If you don’t have time to do the work, hire a bookkeeper to assist you. They can provide reports to help you review your business in order to make sound hiring decisions.