Profits margins are getting tighter for small businesses owners. Rents, wages, and material costs continue to rise higher and higher. By 2019, minimum wage will hike up to $15 an hour in New York State. Less than three years ago, the minimum wage was only $10.50. That’s an almost 50% increase within 3 or 4 years.
Bigger companies and corporations may be able to stomach some cost increases without sacrificing profits by negotiating lower costs with suppliers. But are small business owners such as restaurants, small retail stores, bars, and mom and pop stores able to adjust to sudden increases in costs and keep serving their most loyal customers without increasing products prices too much?
Here are two ways to help counter the constantly increasing minimum wage costs:
1. Automation and systemization:
McDonalds Franchisees have started installing many self-ordering kiosks to help offset some labor costs since 2015. But as small businesses owners, you may think installing new technology may not be cost-effective. Well it depends on what kind of business you have.
There are self-ordering POS systems that can be integrated with your current POS systems. Consult with your current POS vendors. There are many POS vendors offer tablet or iPad based self-ordering apps that do not cost more than $500 including the stands. When your customers come in to the restaurants during the lunch hour rush and see a long line, they can easily open their smartphone or go to the nearby iPad self-ordering kiosk and promptly make their orders.
For a 10 employee quick service restaurant, just two to three self-ordering kiosks will be sufficient to help you reduce your labor costs and make your customers happier because now they don’t have to wait 10 minutes just to have someone to take their orders.
If you do not already use a POS system at your restaurant, then you need to invest in them as soon as possible. POS systems will help you keep track of all the numbers including employee hours, sales, cash, and accounting. Many POS software can be integrated with the accounting software your accountant uses. Therefore, it will reduce your accounting bills and make sure no money is lost. Best of all, it will save you a lot of time once you have the system set up to run automatically.
2. Cut payment processing costs by implementing a cash discount program
With the banks pushing rewards and travel credit cards in the last decade, it’s forcing small business owners to pay up to 3.5% to 4% to credit card processors to accept credit cards payments from their customers. Especially, with virtually everyone paying their food bill with credit cards, restaurants profits are shrinking. And the processing fees are not something that really add any substantial value to your businesses. As a matter of fact is if you run a restaurant, you have to accept credit cards unless you are Peter Luger steak house in NYC.
Fortunately, you now have an option to eliminate your processing costs if you take advantage of the latest changes in payment regulations. Durbin Amendment 2 states that businesses are permitted to offer a discount as an incentive and to encourage customers to pay by alternative methods other than credit cards. Such alternative includes cash. Business are not prohibited from imposing a convenience fee as long as it applies to all transactions.
In fact, gas stations have been using cash discount for many years. And many government agencies charge you extra processing fees if you pay by credit cards.
But if you want to eliminate 100% of your credit card processing fees, you want to hire a company that knows what they are doing to protect your business from all legal risk and customer complaints.
During our research for a legitimate cash discount program, we found WOW Payments, a NYC merchant service company with very positive online reviews and an “A” rated company on Better Business Bureau (BBB) with zero complaints so far. They have several years in experiences to help small businesses implement Cash Discount Program to help businesses cut down credit card processing fees and effectively increasing their profits margins by up to 4%. They offer EMV and PCI compliant credit card processing equipment and without any long-term contract.
News Source: https://wowpayments.com