From federal legislation to state and county law, minimum wage is currently under fire; we have all heard the news. 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. According to Gallup polls and other surveys, small businesses’ outlook is widely divided.
Some states and counties are already ahead of the game. The state of Washington currently tops the charts for highest state minimum wage at $9.32/hr, and the county of San Francisco has the highest overall minimum at $10.74/hr. And these rates seem to keep on changing; here in California, our minimum wage will go from $8/hr to $9/hr starting July 1 of this year, and will increase again in 2016. However, unless your business is located in a high-paying state/county, small business owners across the nation are preparing for increased payroll expenses.
Is your small business ready? Although there are many benefits from this change, the soon-to-be 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.
- Analyze your business: understand profit margins, projections and business requirements to ensure profitability.
- Analyze your staffing needs: do you really need to hire a permanent worker, or should you contract out extra work? And vice versa. Outsourcing administrative work may be a time and money saver, but in other cases some tasks are best performed by your permanent staff. When you do hire:
- Be very careful to make sound decisions—hiring and training the wrong person can be very costly to your business, and the wage increases may give you a smaller margin of error to offset hiring mistakes.
- Take a closer look at your staff. Invest in your employees to increase productivity and decrease business/hiring/training costs.
- Analyze and refresh your pricing. Do your research, get to know your competition, and refer back to your business analysis to find the ideal/workable price increase for you.
If you’re looking to decrease costs for your payroll or bookkeeping needs, we are here to help you by providing customized services to save you time and money. (310)534-5577 or [email protected]
