How Small Businesses Can Prepare for the 2019 Minimum Wage Increases
For decades now, politicians, business leaders, and academics have debated the benefits of minimum wage increases across the country. With the new Raise the Wage Act of 2019 this debate has become a reality. For small business owners this brings a lot of re-structuring and planning. But how do you plan for something like this?
Here are 3 questions you can ask yourself to get started:
1) How much cash do you have right now?
Reconcile your books and determine how much cash you have on hand right now. Then take a snapshot of the cost of your business operations. Lastly, forecast out 12 months. Here’s how:
2) What can you cut?
Think about all your expenses. Are there things you can cut back on? If you were planning to upgrade your software, kitchen, office, retail space, or planning to purchase new equipment, is it really necessary right now? Or can you do without it, while you get a handle on having to pay your workers more.
If this doesn’t sound like an option, getting business financing could help you. Working with an alternative lender like Select Funding can get you the cash you need quickly so you don’t have to cut back on anything.
3) Can you increase your prices?
Sometimes to cover the cost of one thing you need to increase the cost of something else. In this case to cover the cost of labor, you may need to increase your prices a bit. As a small business owner, you may cringe at the thought of raising your prices, because you may think, “well how can I stay competitive, if my prices go up?” But think about it, if you want your gross profit to remain the same after the wage increase, this is the best option for now. You may only need to increase the numbers ever so slightly where your customers won’t even realize it or even care. It’s always a good idea to consult with a financial advisor to make sure your numbers are correct.