Small Business Development Center
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9 small business solutions to the Oregon minimum wage increase

By Chemeketa SBDC

Planning for an increase in the Oregon minimum wage

Oregon’s minimum wage will begin increasing this summer, and gradually over the next six years. If you’re not sure how to respond to this news, our business advisers have created this checklist of practical actions to take.

1. Make sure each employee knows what is expected.

A job description is a minimum requirement to accomplish this. Better yet, create “Position Manuals” which are job descriptions on steroids. In addition to listing essential duties, they contain the tips and tricks that have been learned by experienced employees over time; they become a “How to Drive this Desk” booklet for each position. As a side benefit, this will save a ton of money when you experience (the inevitable) employee turnover, by getting the new employee up to speed quickly.

2. Clarify what each employee is NOT responsible for.

This avoids needless duplication of effort within the company, which will become increasingly costly under the new wage regulations. A good way to accomplish this is with a proper organization chart (where each position has its own “position manual”.) An “all-hands meeting” around such a chart will show each employee how they fit into the various systems that comprise the company operation as a whole.

3. Invest in training.

An employee who is not well trained would very likely contribute to higher costs per unit and lower quality. Training is always important, but it will be especially critical as the cost of employees goes up.

4. Delegate more effectively.

As a business owner, it can be tempting to meddle with employee tasks, adding to the amount of time he or she spends on a project. It takes self-discipline to hand off the work, but it’s more efficient and less costly.

5. Get your financial statements current.

You can’t plan if you don’t have solid numbers to work with. If your books aren’t up to date or you haven’t run a P&L statement lately, do it. These will show you the raw facts about where your business is losing and making money. With them, you can create an informed strategy.

6. Avoid creeping cost of goods.

If you have employees who are part of your variable cost structure, production will cost more per item. The wage increase must be passed on to the customer. If the customer balks, then you’ll have to decide whether that product or service is viable long-term.

7. Market better.

Though it might be hard to see, there’s a huge opportunity for your business with this news: your customers will have more cash in their pockets to spend on products and services. The more effective your marketing, the greater your profits.

8. Focus on options.

Don’t waste time dwelling on how awful it is. Focus your energy on how you want to respond, and get yourself out of the loop of negativity. You just need a plan.

9. Get support.

If you’re stumped or overwhelmed, sit down with one of our small business advisers at the SBDC. Together, we can look over your business numbers and help you decide how to respond to this gradual increase in costs. This change doesn’t have to break your business.