Dealing with Minimum Wage Increase

Video Transcription

There’s been a lot of talk about the potential to have a federal minimum wage of $15 an hour. One of the things we hear is, “I don’t know how my business will survive if the minimum wage is $15.” I’m here to tell you that it is time to put your thinking cap on because outside circumstances will always have an effect on your business. And minimum wage is one of those. I personally don’t believe there should be a minimum wage. I think people should be paid based on the value that they provide, not based on some federal standard of what someone else values their work at. If someone is a poor worker, they should receive less in hourly wage than somebody who does a fantastic job. I’m sure you’ve all got workers who have earned their raises that we’ll probably get another raise on top just because of federal standard changes.

The reality of it is when minimum wages increase, there are two things that happen to our economy: the price of everything else goes up and unemployment goes up because you’ll have to lay off some. If you can’t afford them, a business owner will need to take a few actions. You’re going to need to make sure that your labor usage is efficient. If you’ve got struggling employees who are not doing their job, not earning their keep, they’re going to be gone.

I want you to evaluate a couple of other things, what can you outsource? What can you get somebody else to do for you? Are you handling some of your internal work that somebody else could do more efficiently and more effectively and take that off of your plate?  I’m a perfect example. Accounting is one of those tasks for most business owners. You probably shouldn’t be doing your own accounting. If you have things that you need to get done on your to-do list that are not getting checked off.

Another opportunity is automation. What is it that you’re doing manually that could be automated?  For some that might be their point of sale system. It might be tracking their sales tax. It might be barcodes on inventory. It could be as simple as you’re doing some mailings that you could automate use bill pay through your bank to automate, rather than writing checks. There are a lot of things, big and small that can be automated. And the third opportunity I want you to consider what you’re doing, that you just don’t need to do money more. You could just stop doing it. So would somebody care or notice, if you stop doing something, look at those tests, run those three criteria through it on a day to day basis.

As you perform tasks, ask your staff to do this, to do we really have to do this? What does it do for us? I mean, obviously, if it’s cleaning the bathroom, yes, you have to do that. You could look at outsourcing to have a janitorial service or a cleaning person who does that for you on a routine basis. You could also look at automation. Now, automation of cleaning, the toilet is coming. I’ve seen it. But for automation, look at those tests that you do on a routine basis that might be able to be automated. So for example, if you are calling people to tell them to pick up their purchase, is there a way you could automate a texting service to do that for you? So think about those things. And sometimes we just have to deal with what is given to us. As business owners, you probably should not appreciate or like a mandatory minimum wage increase. However, things happen to us all the time. We have to figure out how to deal with them. I would love to help you deal with this issue and many others.

Donna Bordeaux, CPA with PYOPAccounting.com.

Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna Bordeaux and PYOP Accounting.com. Donna and her husband, Chad, who is also a CPA, have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help PYOP studios earn 4 times more profit than the average PYOP and are passionate about helping industries that help families build great memories.