A bookstore in San Fransisco is closing up and blaming the minimum wage.
I'm skeptical. I think that's bunk.
Most of the time, normal raises in rents and wages aren't enough to do a business in. They become part of the equation of how you do business. If rent becomes too high, you move. If business is slow, you have less employees.
I think most of the time it is business mistakes that do a business in. Not ordering enough, ordering too much, not pricing correctly, etc. etc.
It's interesting, the wages they are talking about are pretty much what I'm paying -- or will be paying long before the time the 15.00 kicks in in S.F. But done in at a steady pace, I think I can keep on making adjustments. Add a dollar to a employee's wages and we're talking about 40.00 a week? Add 2.5 dollars and hour, we're talking 100.00 a week?
Frankly, if that is enough to close you down, you had other problems.
Remember, all these expenses are proportional. If you have enough business to need two employees, you have two employees, if you have enough business that you need three employees, you should be making enough money to pay three employees, and so on.
But that means the higher minimum wages forced you to cut hours! I hear you thinking. That means you were forced to cut employees!
But I would rephrase that:
A properly managed store is a properly managed store, with or without the raises in hourly wages. It may mean, as the owner, that you need to work more hours. It may mean you need to make more money through other means.
Overhead is nothing to dismiss, but the job of the store owner is to carry enough of the right kind of product at the right prices to pay for the overhead. Or to lower the overhead to match what you're making.
6 days ago