During the November election, voters overwhelmingly approved a constitutional amendment to raise Florida’s minimum wage. The amendment will increase the wage to $10 an hour starting Sept. 30 and lead to annual incremental increases until it reaches $15 an hour in September of 2026.
State and federal policymakers continue to debate the details of the issue, and small changes might be made for some certain groups of workers. In the meantime, business owners throughout the state are contemplating how a wage increase will affect their business plans. Dr. Jerry Parrish, chief economist and director of research for the Florida Chamber Foundation, said analyzing the situation is exactly the right move.
“The good news is that business owners are not alone in this,” Parrish said. “It depends on the individual business model as to what specific effects there will be, but now is the time to plan, do some research and seek professional help in reviewing your company’s financials to determine how to manage this increase.”
The Florida Small Business Development Center (SBDC) Network, which is the principal provider of assistance to small businesses in the state of Florida, employs certified professionals who provide no-cost consulting, training and research to help businesses grow and succeed. Adapting to the pending change in the minimum wage is exactly the kind of issue with which the Florida SBDC can help. A consultant who specializes in capital access for the Florida SBDC at the University of North Florida and works out of its St. Johns County office, Marge Cirillo, offered a glimpse into the kind of support clients can find.
“You know, it might be an owner’s first response to say, ‘I am going to have to raise prices,’ but that is not necessarily the case,” Cirillo said. She offered these solutions instead.
- Start with business basics. “Review every single line item in your financial statements to see where you might be able to save,” Cirillo said. “It is not just going to be one thing. It is going to be several things here and there that might have to change. If you don’t completely understand all aspects of your financials, it’s time to sit down with an expert like your accountant, or your Florida SBDC business consultant.”
- Re-examine vendor relations. “Perhaps you can get a discount on prices if you pay within 30 days. You never know until you ask. Don’t just assume that payment terms are the same as they have always been,” Cirillo said.
- Review cost of goods. If you have been using the same vendors for years, perhaps it is time to take a look around and see what else is out there. Can you negotiate better pricing with other entities? Now is the time to explore the landscape of offerings with a fresh set of eyes.
- Think about how you package your products or services. Is there a way to adjust it to save money without sacrificing quality. “Good examples of this are in the restaurant industry. For instance, can you cut back on your portions just a little bit, a half-ounce or so. Or, can you do a special one night a week that is popular but cost effective like pasta?”
- Take a hard look at operations costs. Are you using a bookkeeper when you could automate some of that work by learning to use Quickbooks? Are you having employees work overlapping shifts? Re-train workers so that shift change time is less hectic and more efficient. “You as the owner might have to work more and step in, but that is a solution.
- Ask the hard questions about the bottom line. “If you are drawing a salary and making money from the business, can you afford to take home a little less in salary or net income,” Cirillo said.
- Attract more customers by beefing up social media presence and paying attention to your website. Marketing is a constant responsibility of a business owner. Can you think of more innovative content to grab potential clients’ attention and instill loyalty in existing clients?
- Offer an ancillary service to add value and increase revenue. Can you add a curb-side pickup or delivery option? Clients love these flexible options, and though the demand for these increased during COVID-19, customers expect these amenities to stay around for the long haul.
Whatever owners do to adjust to having to pay a higher minimum wage, Cirillo encourages them to think of these accommodations as long-term options. “These are not stop-gap measures but rather solutions for the foreseeable future. It’s just smart business sense,” she said.
Business owners who need help reviewing their financials and brainstorming solutions can find assistance at their local Florida SBDC office, which are in more than 40 locations around the state from Pensacola to Key West. Appointments are being conducted virtually for safety and convenience.
To learn more, and to schedule an appointment, please visit www.FloridaSBDC.org.