This is not the pain you feel associated with childbirth. Instead the focus is on the
rising cost of minimum wage and how it impacts the finances of a business,
particularly those that employ less skilled workers. On July 1, 2019 22 states
increased their minimum wage. NJ ‘s wages soared from $8.85 to $10 per hour,
Chicago from $12 to $13 and San Francisco is up to $15.59. Illinois will be the first
state in the Midwest to phase in to $15, with increases upward of $1 each January
until hitting $15 on New Year’s Day 2025. Clearly the nation appreciates a
movement to increase minimum wage to increase the income inequality.
Now stop thinking like a college student, excited to get a raise. You are in a Finance
class, so are putting your skills to the test. You are a small business owner, (fill in
your name) Pizzeria. The increased minimum wage will be a growing concern for
your restaurant operation. This will increase your expenses. This, in addition to
escalating expenses for healthcare, real estate costs, taxes, insurance, utilities costs,
can really put a dent on company profits. Here are 8 different steps to tackle the
increased cost of minimum wage. Pick any one solution and explain why your
solution is the best solution. Give details of how you would apply your strategy and
the risks associated. Remember some tactics could be detrimental to the business
explain those risks.

1 Change the Menu – This option could include raising the costs of items, raising

the delivery costs, deny credit card transactions (there is a fee to use a credit card as
a business owner), remove items that are costly, remove expensive ingredients.
Explain specifically and in detail which or all of these methods you would adopt.

2 Cross Train Employees – The more versatile the employees are the more a shop

can optimize the labor. When a dishwasher can bus tables or a bartender serve food
operators can reassign employees and optimize the workforce. Specify who you
would cross train and how many employees you would then have working at a time.

3 Cut Labor Cost Dollars – You could try to get by with fewer workers. Maybe

close on a slow day or reduce the hours open after the dinner rush. This can be
tricky because some workers may quit if not given enough hours. Some tasks might
be forced upon overpaid employees; managers should not be cleaning toilets.
Ideally “get the right people performing the right tasks at the right time” but how?

4 Leverage Technology – the definition of technology is cheaper, faster, better.

How would you use technology to improve your operation? Be specific

5 Focus on Reducing Turnover- Many minimum wage employees quit and leave,

turnover. How can you reduce this? Remember you cannot afford to pay them
more because this will negatively impact your bottom line.

6 Investigate Expenses – How can this help? Investigate the costs, which are

necessary and which would you reduce first? Think advertising, utilities, inventory
etc.

7 Drive Revenue – How can the shop increase their revenue? Can they increase

their operation to include catering, school lunch programs, cocktails, and dessert
menu?
Be specific and remember you are branded as a pizzeria.

8 Dig Into the Data - Analyze the statistics and the financial statements. Think

about the value in this one. What specifically would you be looking at?

Read the Assignment involves the issue of minimum wage impacting small business owners. Read the different options to remain profitable while facing increased costs. Write a 2 pages, spell checked, proof read paper explaining which option you would favor for your business. Explain what concerns you would have in adopting the other options. Make sure you can clearly support why your option is the best option and why the other options are less desirable. This will be 10% of your final grade