We are nearly ¾ of the way through the year, and while the first half of the year was a good year with a healthy economy and high growth, the back half appears to be becoming one of increasing instability. It has been a long year of lots of changes to the political landscape, and your small business may be facing some issues that are really based on how 2019 has been going so far. What are the four key issues facing small businesses in 2019? Well, it’s a mix of managing growth, costs, your rainy-day fund, and staffing.
Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.
1. Unemployment Remains Low… For Now
The economy is still growing so people are needed. It now becomes a question of how you can use your team effectively and efficiently. If it weren’t for the clouds of uncertainty on the horizon, we recommend continuing to hire so not to hamper your growth. Our best focus now would be to figure out how to retain our current workforces. It is significantly less expensive and less disruptive to retain an employee than to hire a new one. Until these uncertainty clouds pass, it may be better to focus on increasing worker productivity than expansion.
2. Regulations Are on the Horizon
While we may depart from others on this point, that not all government regulation is bad, full stop. However, we must also recognize the fact that they do tend to affect us as small business owner disproportionately.
This isn’t the end of the world, but to keep your small business alive in 2019 you’re going to need to be smart about how you go about your financial saving, especially for remaining strong in the long term.
3. Minimum Wage Hikes Impact Everyone
Again, we may differ from others, but a living wage is important for retention. You cannot make the argument on retaining employees and still push for low wages. The two don’t work. Many of the ‘pundits’ pay lip service to retention but shout over minimum wage hikes. Look, labor cost are real expenses. We get it. But, there are no two ways around it. But, you can’t have happy and engaged employees, who are struggling to pay the rent. The minimum wage will likely increase. We argue that we should plan for it.
It may be true that, as the Congressional Budget Office projects, that a federal wage hike to $15/hr could put “nearly 1.3 million U.S. citizens out of a job, reduce business income, and raise prices as businesses would be forced to pass on higher labor costs”. In also equally true, that the current workforce making minimum wage, being trained by us and gaining experience, will leave us for hiring paying wages. Thus, leaving us to foot the bill for additional recruitment, for lost productivity, and for training costs. The small business world of 2019 is one that requires different ways of going about our understanding of wages and the economy.
4. Raising Productivity Requires New Ideas
We agree with the pundits that the government could do more for both workers and small business by providing training incentives and programs that by raising the minimum wage. This helps both parties. It has the net effect of raising wage because of increased skill sets. Also, it has the benefit of increasing productivity, which would offset the increased labor costs. Instead of trade wars, lower interest rates, and higher minimum wage, this would be a much better use of government stimulus and resources.
Conquering 2019’s Small Business Issues
We do face an uncertain the next twelve months. Hopefully, after the election in 2020, we may return to some sense of stability and predictability. However, until then, we need to be ready for almost anything. Making smart choices in people, productivity, and cash management, we should be able to ride out the storm.