The world is becoming consolidated, we all know that. As megacorporations become larger, they push traditional mom-and-pop businesses aside … or run them out of town entirely. And with the world increasingly taking place online and in a global sphere, “out of town” often means “right on out of business.”
Naturally, you’re hoping to avoid that fate, but those same megacorps are raising wages to $15, $16 or $17 an hour. When big businesses can afford to outwage you, what are you supposed to do? That’s not to say you can’t approve of wage increases … it just means you might not survive them if you aren’t careful.
To stay competitive with the labor market, then, you need to make adjustments somewhere else. Otherwise, you’ll become yet another Main Street company that can’t afford to compete for talent.
Here are a few ideas to help you survive being outwaged.
1. Increase Prices
The first and most obvious way to put more money in the bank is to increase your prices. This is something many small businesses are loathe to do, thinking it will drive their customers further into the arms of giant competitors.
The truth is, though, those customers are used to paying higher prices for local businesses. Plus, you likely offer a better product than huge companies, which is also worth paying for. The worst that can happen is you see a slowdown for a while, in which case, you can reverse course.
You’ll never know until you try, though. And trying might be the difference between life and death.
2. Reduce Costs
If you really can’t raise prices for whatever reason, reduce costs. (Actually, reduce costs no matter what.) There are usually several good places to start when it comes to trimming the fat.
Check out your dues and subscriptions. You can find these in any profit and loss statement from the last month or the last year.
Also ask yourself, are you paying for outdated services? For an email marketing campaign that hasn’t shown ROI in over a year? For IT systems that you can now do in-house with a cell phone and an app?
If so, cut them out.
3. Change How You Do Business
It’s possible you need to reimagine how you do business. For instance, are there any items you use regularly that you could buy in larger quantities? Prices often decrease dramatically when you double your order.
Could you rearrange some assets to make you more money in different accounts? Are there any niceties (e.g. free wine at a hair salon) that you can do without for a while? Can you prune your business offerings to the most popular?
4. Turn Out the Lights
You might also keep shorter hours. By literally turning off the lights more often, you can decrease your payroll, utilities and supplies. If you’re only getting a good customer rush for five hours a day, no need to stay open for nine.
These changes might feel painful at first, but once you can afford to pay your staff competitive rates, you’ll likely see downstream effects in the success of your business. Then, you’ll know it was all worth it.