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Nineteen States saw their minimum wages increase with the start of the new year. California has also approved local increases in the minimum wage. New rates will be implemented in Oregon, Michigan, Washington, and D.C. later this year.

As a small business owner, you’re likely to be concerned whenever labor costs increase. It’s essential to stay away from the political hype surrounding the minimum wage and focus on the bottom line. Both red and blue states approved increases in minimum wages through ballot measures. So, whether your state has increased its rate or not, it is wise to crunch the numbers and plan for future wage increases.

How are other small-business owners dealing with the minimum wage hikes?

Outsourcing and automation

Marco Giannini is the CEO of Protein for Pets in Los Angeles. We have an advantage because we have been in business for less than two years, and our systems are designed with efficiency and scalability in mind…Companies need to look at outsourcing more technology and service.”

Cut other costs

Anita Agrawal is the CEO and designer of Best Bargains in Toronto. She says she has reduced her advertising budget to increase employee salaries. She believes higher wages will lead to a lower turnover rate and motivated employees. “They are much more committed to their work.”

Digging into data

Rahul Nair is the manager of Sunnyvale’s gastropub, The Oxford. He says, “We try to use the information to use our man-hours most efficiently.”

Looking at compensation holistically

If the increase in the minimum wage has a ripple effect that ends up pushing our hourly workers to ask for more cash, I hope they will look at our entire compensation package. This includes flexibility in scheduling and frequent free lunches. We also offer 401(k) access, a casual work environment, and more.

Transparency with customers

Jack Stewart owns Aunt Mary’s Cafe in Oakland, CA. He says they’ve implemented a new service fee and posted signs encouraging customers only to tip 3-5% for exceptional service. “We want everyone to be paid as much as possible.” “If you raise the wages, you’ll have more career-oriented employees who want to remain on the job,” says he.

Welcome to our new customers

Joe Chevalier is the owner of Yellow Dog Bookshop in Columbia, MO. He says that people earning minimum wage will not put [an increase in wages] into an overseas account. They’ll spend it. This increase will bring more money back into the community as people consume it.

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