Minimum Wage Increase Benefits

minimum-wage-benefits

Minimum Wage Increase Benefits?

How some of the successful establishments in restaurant industry are benefiting from the increase in the minimum wage?

Factually you are going to need to pass this increase along to the guest. Most operators are fearful that if they add more pricing/charges to the guest check you have the potentiality of losing guests.

I do not disagree with this sentiment at all.

  • If you do not do this (pass the minimum wage increase along to the guest) though then you are going to have to cut employee hours which is going to impact service.
  • If you do not do this you cannot raise the pay in the kitchen.
  • If you do not do anything then you will significantly lower your profits and jeopardize your business.

An associate of mine, Alisa Na, CPA, with offices in Edmonds and Seattle provided me with information on wages which is very relevant to this topic:

*Washington State – As a result of the passage of initiative 1433, the minimum wage will continue to rise from $11/hr for 2017 through $13.50 for 2021.
** City of Seattle have higher minimum wage rate. $13/hr for 2017
*Along with increasing the state minimum wage, the initiative requires employers to provide paid sick leave starting Jan 1, 2018.

Alisa is rated one of the top 19 CPA’s in Seattle and here is a link to her bio (https://www.expertise.com/wa/seattle/accountant-cpa).

Here are some Tips on making the Most of the Minimum Wage increase 2017 for your Business:

#1 Living Wage Service Charge

What is it?
It is an additional charge to the guest check of anywhere from 2.9%-5% of the guest check total.

What do you do with the money that you are going to get?
It is used to pay additional wages not only in the kitchen but to your service people as well.

How do I inform my guests?
You make a statement on the menu which might go something like this: “we support the recent initiative to amend the state minimum wage and benefits. A living wage surcharge of 2.9% (example only) will be added to all checks. Please ask your server if you have any questions. Thank you!”

How do I inform my staff on how to deal with this?
This is a longer discussion with the staff but my advice is to get a memo out to them discussing why this was done, visit with them in a team meeting to discuss and what the impact to the employees might be.

When asked by the guests how should I reply?

  • Humbly
  • We, the restaurant, have the need to mitigate the additional cost of a 16% increase in wages and benefits to the restaurant the restaurant can continue on.
  • Any other items you feel you would like your staff to better understand.

#2 Review all of your costs to find potential cost efficiencies

Food

  • Review portion size
  • Talk to your vendor about not only pricing but using alternative types of raw ingredients
  • Raise the prices slightly
  • Review the amount of labor it takes to produce prep work as well as the production on the line
  • This is a team effort

Labor

  • Cross training
  • Look for efficiencies
  • Careful scheduling
  • This is a team effort

Operating Expenses

  • Do you need all of the items you are buying? Think twice about buying something.
  • Do not defer maintenance!!
  • Enlist your vendor’s support to help on becoming more cost efficient. They are glad to do so because if you are successful they are the benefactor.

We have found that by doing many of the items above we are seeing an actual increase in profitability. We have worked with several groups on the better utilization on the products (cost of goods), labor and operating expenses and this has enhanced the operator’s profitability and sustainability as well.

As another fall out from this increase in wages I have seen the operators looking more diligently at their business model than they ever have before.

Combating Minimum Wages 2017

“Restaurant start-ups, Restaurant turn-arounds, and Profit-improvement”

minimum-wage-2017

WAYS TO SURVIVE & COMBAT THE MINIMUM WAGE HIKE

It is upon us as we speak. We can grumble about it and get angry, but at the end of the day it is going to happen.

What can we do as operators to “overcome and benefit” from this? Continue reading

Hiring & Employing for Today in Seattle and the Eastside

The theme of my dissertation is an everyday dialogue I am involved in, “there is not very many people out there…let alone good people.” Most of the owners/managers are frustrated because of their situation. “What Should I do? I am lost. Help.”

Here are the things to consider.

Let’s address what you have.
Valuable owners, managers and employees are what turns a restaurant from good to great. Your most important asset is your talented, high-performing employees. Retaining valued employees will definitely impact your success.

How to do this should come naturally. You are in the hospitality business because you care about people. Not only the customers, but more importantly your staff. Continue reading

woodblock_126

Woodblock Redmond – “All of these contributions have led us to early success.”


RGI assisted the owners of Woodblock (Tony & Carolyn Scott) with:

  1. finding the “right” real estate and helping negotiate a “better” deal
  2. assisting in the floor plan and overall design direction
  3. food & beverage menus in terms of direction and development
  4. locating a quality chef and bar manager,
  5. interviewing, hiring and training the staff
  6. developing the initial marketing & advertising programs
  7. installing proper financial systems & controls

Because of the thoroughness and attention to detail, Woodblock opened with a big impact on the community and was cash flow positive right from the beginning.
Continue reading

marketing

The New Marketing

Over the years, we have spent money on electronic and print media, public relations, direct mail, and more. Today, marketing can be highly effective and many times more cost efficient.

What I like about the new marketing paradigm is that it (1) is targeted to one’s existing guests, (2) can create spurts of sales and (3) helps create a stronger sense of the Brand. There are only six “must do” items for today’s operators. It doesn’t take a lot of time or effort, but one needs to be diligent and consistent to achieve maximum results. So here are our pointers: Continue reading

manager-meeting

Management Team Staying Focused

How do you keep your management team focused as a group and as individuals? It would be best for both you and your team members to meet as a group on a weekly basis. I advise all clients to do this so that the team can be more successful.

The objective of the meetings: To have the leadership of the restaurant be on the same page so that they might manage the staff more effectively.

What happens at these meetings?
Continue reading

business-plan

Why Do a Business Plan?

Starting a New Restaurant? Why Do a Business Plan?
By Arnold Shain

The process of opening a restaurant from start to finish can be an arduous one. It requires a tremendous amount of research and determination, and it can get overwhelming. Often clients ask, “What should I be doing?” It’s the right question to ask, but not easily answered. Why? There is a whole array of things that must be done simultaneously in opening any business, but especially one as complex as a restaurant.

So, where do you start? Continue reading