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Small Business Development Center

Does your business employ minimum wage employees? If so, are you aware that effective January 1st, 2020, the minimum wage in Washington State is increasing 12.5% (from $12.00 to $13.50 an hour)? Holy schmoly, that’s a HUGE increase in costs (i.e. a GIANT dip in your company’s profits). Your business advisor at the SBDC is here to help you plan for your particular situation, but below are some general strategies to make this cost increase a little less painful.

Increase Prices

When deciding whether or not to increase prices, you need to ask yourself, “Will our customers pay a higher price? Is our product worth this much more? Will our sales volume drop with a price increase?”

Sell More!

Are you sitting on a lot of inventory? Are there frequently a lot of empty seats at your restaurant? Are your landscaping tools or machinery often idle? If so, these are sure signs that you could use some marketing and sales assistance to increase the attractiveness of your current product or service. The SBDC can help you identify your target audience and tailor your marketing message to better reach potential customers.

Reduce Fixed Costs

Fixed costs are your monthly expenses, regardless of sales volume (examples include things such as rent, insurance, and debt repayment). Whereas increasing your prices can be done rather quickly, reducing your fixed costs can take some time. You may need to find another location, negotiate with your landlord for reduced rent, or find a symbiotic business to share your space. You may need to shop around for a more cost effective insurance policy. You may need to refinance or restructure your debt. Essentially, now is the time to go through every line on your Profit & Loss financial statement and ask yourself the hard question, “How can I reduce (or even eliminate) this ‘fixed’ expense?”

Reduce Variable Costs

Your variable costs are the expenses directly related to your sales and/or production volume and ideally appear on your Profit & Loss financial statement as COGS or Cost of Goods Sold. Variable costs include items purchased with the intent to resell (in the case of retail) or ingredients that go into your dishes (for a restaurant example). Finding suppliers with lower costs and reducing waste are just two ways to reduce variable costs.  

Examine Hours of Operation

Hourly labor can be tricky. On one hand, if business is slow, you can send an employee (or several) home to reduce costs (suggesting that labor is a variable cost). On the other hand, if you have set hours of operation, a component of your labor is fixed. Thus, it’s worth a serious examination of your daily and hourly sales to identify if you can and should reduce hours (or even full days) of operation to save on hourly labor expenses.

I worked through this analysis with one of my clients, who realized that he was consistently spending more in labor than he was generating in revenue the first and last hour his shop was open. By shaving 14 hours off his weekly hours of operation, he increased his annual profitably by over $17,000 (since a minimum of two employees are required in his shop at all times).

Reduce Labor Hours

If you don’t have daily and hourly sales data available to make the strategic decision about reducing hours of operation, but you want/need your total minimum wage labor costs to remain at the current dollar level (despite the $1.50 increase in the hourly minimum wage), here’s the formula to help determine how many hours to reduce, come January 1, 2020: Current minimum wage labor hours x $1.50 / $13.50. For example, if you currently have one minimum wage employee working 40 hours per week, you’ll need to reduce the hours worked per week to 35.5 hours.

Consider Cutting your Losses

If your business is struggling now and you rely on minimum wage employees and the suggestions above seem unfathomable to help weather a 12.5% cost increase, you might consider closing your doors. Regrettably, it’s not uncommon for business owners to pour their heart and soul into an enterprise and exhaust their personal savings trying to keep a business going. If you are currently paying employees minimum wage and forfeiting paying yourself and exhausted trying to turn your business around, I encourage you to be honest and brave in knowing it’s only going to get more challenging in 2020. Treat yourself with kindness and consider cutting your losses.


Remember, your SBDC business advisor is here to help you grow (or at least maintain!) your level of profitability. Contact us today so we strategize a combination of tactics to weather the imminent spike in the minimum wage. 

Post date: 201906

Many entrepreneurs are obsessed with productivity and optimizing their business lives — from having the perfect productivity system, the latest time management app, and more 'hacks' than you'll find at a tech conference. Zero inbox anyone?

Perhaps here in the City of Subdued Excitement a few more souls are hip to realizing that's an ideal that not only doesn’t exist, it’s harmful to our health and happiness. And what’s more, it’s completely misguided — what many of us really want to do with our days is do meaningful work and have an impact on the world.

Sadly, the reality is we’re burning through a lot of busywork, spending our days doing a lot of 'stuff' but not really getting anything accomplished. This leads to burn out and feeling like you're stuck in a rut.

So how can you get more meaningful work done? 


Focus on the important, meaningful tasks instead of mindlessly spinning your wheels or allowing constant interruptions to disrupt your flow. 

Easier said than done - right?

My favorite time management system came from legendary Fortune 500 consultant and sales trainer Chet Holmes (who wrote a killer book on sales and marketing called 'The Ultimate Sales Machine').

Chet's system was, in a word, SIMPLE.

Each day you identity your Top 6 things from your 'to-do' list and block out chunks of time on your caledar to devote to moving each of those things forward to some degree.

You break those 6 things into manageable chunks of time and schedule that time, uninterrupted, on your calendar.

If you have a huge project you're working on that will spans days or weeks, maybe you only devote an hour or two at any one stretch before moving on to the next task.

The key to getting more meaningful work done is minimizing distractions and interruptions.

So put your staff on notice that there will be no more 'gotta minute' meetings. If your employees want to bend your ear about something make them schedule those 'gotta minute' meetings on your'll be amazed at how much time that frees up for you!

If you have a ton of email messages to go through, or calls to return, do those in short bursts.

While you're working on your Top 6, turn off your email client and put your phone on 'Do Not Disturb.'

Start being hawkish with your time and the meaningful tasks will get done. An upside bonus is that you will feel like your work is more meaningful and that you're in control of your days. 

All because you simplified and focused.

To summarize:

1. Pick your Top 6 most important, meaningful tasks, and focus on those.
2. Create space by clearing away all possible distractions.
3. Push busywork like email, phone calls, and social media check-ins until later in the day.
4. Eliminate 'gotta minute' meetings from your work day.

Post date: 201906

I was in an interview a few weeks ago, and was asked by the interviewer how I would increase their company’s social media engagement. It was followed by, “Currently, we only have social media because everyone else has it. It doesn’t really do anything for our business.” This got me thinking about if other businesses felt this way about their brand’s social media presence. Is social media really necessary for building your brand?

The answer in reality is probably closer to it depends on the business, but for the purposes of this blog, I’m going to pretend everyone reading this yelled, “Yes! Social media is necessary for building your brand!”

So for those who are struggling to engage your customers on social media, here are a few tips on how to increase your business’s social media engagement.

finding the right content for social media

Find the right content

Every business is different, and has a different following. Use what you already know about your customers to find the right content for your audience.

Probably the easiest way to start posting unique content is to involve your current customers. Start featuring your customers on your social media platforms. Take a picture of a customer with your product or service in the post. If you do this, one of two things is going to happen: The customer will share the picture to their own followers providing your company with more brand exposure, or, it will act as a positive customer review from an outside perspective and create more trust with people who are new to interacting with your brand.

Your social media content should also be engaging to your customers. Everyone hears the word “engagement”, but what does that exactly mean? Post content that encourages your followers to answer questions. For example:

  • “Check out our new product! (insert picture of product) What do we think?”
  • “We are thinking of adding another color to our highly loved Product X. What color would you want to see added?”

This could also be done by posting Facebook polls on your page, posting an Instagram poll on your story, etc. Use pictures! Images and memes are an easy way to keep your followers interested in your social media posts. Use a different tone and voice for each platform. It can be tempting to post the same content on each platform, but each platform is unique with different followers, and should be treated as such.

Feel like this type of content isn’t working for your followers? Try online offers. Instead of boosting a social media ad, try adding a unique discount code to your post. For example, “If you show us this post in person, get 10% off your purchase!”, or “Enter ‘Facebook20’ during checkout for 20% off your order.” You can also use this method to track which social media platforms your customers are coming from and help decide which platforms are worth focusing on.

Find the right timing

Find out when your followers are most active on social media. Use business analytics to discover when your followers are online, and schedule posts for then. Instagram Business Accounts have super simple analytics to use. Under Insights, you can see how many profile visits you get a week, how many accounts each post reached, which posts were seen the most, and who your audience is. Are most of your followers online at lunch time? Post then!

best time to post on social media


Try to notice how long it takes your followers to typically engage with your post, so you aren’t over-posting content that isn’t being seen. I have noticed a trend with my own social media. Instagram and Twitter are pretty instantaneous with response time, whereas Facebook and LinkedIn can take a few days to reach everyone. Give your followers the appropriate time to see your post and interact with it before moving on to the next posting.

Find the right people

Network with other businesses online, and engage in social media groups on Facebook and Linkedin. Be an active participant with people who are outside of your current following to gain more traction online.

#hashtags are your friend, when used tactically. People aren’t really adding #hashtags in their #posts these days. Instead, add them to the end of your post. It still has the same effect, but readers aren’t interrupted by them. Also take notice of which hashtags are more popular. Do your research! I find using a mix of hashtags works best. Popular hashtags are searched by a lot of people, but that also means a ton of people are using the same hashtag, making your post harder to find. A less popular hashtag won’t necessarily be seen by a ton of people, but your post is more likely to stick out.

Why are hashtags so important? Think of your Instagram Explore page as the Google search bar. Let’s say you want to find a new recipe for dinner. You type in, “dinner ideas” to the search bar. The first thing to pop up is #dinnerideas. Now imagine you are a customer searching for your product, but don’t know the name of your brand. They might search something in relation to your brand in hopes that like products pop up. Make sure your brand is included!

Find the right platforms

Not every platform is going to be right for your customer. Be mindful of where your followers are coming from, and leverage the right platforms for the most engagement. Your business does not need to be on every single social media platform available. Just go where your customers are. Once you get a sense for where they might be, then tailor your brand’s voice for each prospective platform.

options for social media posts

In a world where social media is everywhere, it can seem daunting to get started. The easiest way to get online traction is to test every way out, and learn as you go! The worst mentality you can have for your social media platforms is that they don’t work for your business. You don’t have to be all things to all people, but by trial and error you will find what works best for your customers and your business.


Post date: 201906