An Ounce of Prevention – Why business planning is so important!

By Tanya Priske, Executive Director

There has been a lot of discussion on social media and in the news about the minimum wage hike in Ontario.  In the headlines Tim Horton’s franchisee owners have come under fire for reducing employee benefits in order to replace the new wage expense.  So I ask, what would you do as a small business owner in Nova Scotia if faced with a significant increase to your payroll?   What contingency plan have you prepared for significant increases in the way you do business?

If you visit a Tim’s in BC or NS, you won’t notice any difference.  You know when you walk into the store, a double double or Timbit is the same in taste, look and price.  The Ontario franchisees, unlike independent coffee shop owners, are unable to raise their prices in order to absorb a least a portion of the new expense and had to look at all options to determine where they could decrease their costs.   It is a difficult decision for any business owner, especially when they value their employees.

As small business owners in the hospitality industry, my husband and I have looked at what the impact of an immediate $2.40 minimum wage increase would have.   Without changing anything in our business, we would have to earn an extra $15,000 per year to maintain our current margins.   We recognized an increase in the price of goods bought and sold was a given for us and all of our competitors.  At least an equal footing.   The other option was to reduce part-time staff’s hours by taking on more of the work ourselves.

I don’t disagree with a living wage.  But as a small business owner it is difficult enough to make a profit while power, taxes, water, insurance and other costs continue to rise annually.   Would the cost of increased prices at our establishment deter sales, even in the interim, until people adjust to the new norm?

What are your thoughts?

 

By | 2018-02-13T09:53:43+00:00 February 13th, 2017|Establish, Featured News, Featured Profile, Launch, Member Posts, Thrive|Comments Off on An Ounce of Prevention – Why business planning is so important!