Profit, that’s the main reason why people start businesses. The thing is, for you to make a profit you must keep costs down. A majority of small businesses keep costs down by focusing their efforts on lowering utility bills, bartering, through internships, and most importantly by lowering payroll expenses. That simply means that they either lower salaries or fire people, it is understandable to go down that path but you will have to stay within the law.
This means that before you fire someone, you must understand the “employment at will policy” if you are in Canada you should know that “at-will” employment policies don’t exist. Thus, if you want to terminate someone without cause, you are required to give the employee reasonable notice.
Understand that when authorities raise the minimum wage, as an entrepreneur or as a business owner you will have to make tough choices. What happens when a minimum wage is raised? Businesses cut costs by hiring fewer people and sometimes by firing current employees.
The simple truth is businesses are not charities; they are in it for profit, and if they can’t make profits the businesses will fail.
One thing that is very important to understand is if you have hardworking employees who get paid well you will make profits, on the other hand, if you pay your employee’s very low wages and create working conditions that are not okay job satisfaction and morale will be low in your business or company. Meaning that, in the end, you may have to deal with strikes and little to no profits,
The point is, improve your employee’s wellbeing and they will stick with you through the hard times.
If you increase your employees’ wages, they will be able to buy better food, live in better homes, and most importantly they will want to continue working for you i.e. they will have a reason to want to come to work. The only issue here is raising the minimum wage doesn’t work meaning that it makes people poorer, how? When the minimum wage has increased the price of things such as food or services, go up. This is because the cost of production also goes up if businesses don’t raise their prices they won’t make profits.
As an employer, there are methods that you can use to deal with minimum wage hikes, the first thing you should do is look at your expenses.
If you don’t understand your expenses you lose money; this means that you must develop an in-depth knowledge of your company’s/businesses’ cash flow. This will lower wastage; the trick is to come up with a financial strategy that suits your business. One option here is to talk to a financial expert or someone who is in your industry/industry experts.
Hire people who know what they are doing i.e. only hire the best, you see the thing is employees are investments. This means that at the end of each day you expect something from each one of them. During busy seasons you can bring in contractors or freelancers to fill in the gaps. It is also worth mentioning that if you focus on improving your employees well being they will be motivated to put in more work into your business.
Adjust your pricing and think about robots
This can get kind of tricky because you will have to look at things such as your competition, and the law. If you raise the prices too high, you might give the competition an edge over you, therefore don’t make up prices base it on current market rates. You can also lower costs by replacing people with machines e.g. accounting software, and assembly robots. It may seem harsh, but it will help you lower costs.