Small business owners expect to feel the most significant impact from this increase as they now face a myriad of tough decisions on whether to place this burden on themselves, their customers, or their staff. They will have to take action to reduce operating expenses, employment expenses, or raise prices to combat this new reality. While many factors such as wage increase and food costs are out of a franchisees hands, here are four ways that owners can leverage technology reduce expenses and preserve experiences for customers and staff alike.
Reporting and Benchmarking Tools to Reduce Inefficiencies
Small business owners and franchisees will need robust reporting and benchmarking now more than ever as the profit margin will be lower than it was last year. Having a system in place that can detect inefficiencies at every level of a stores operations can help pinpoint cost-saving opportunities that weren’t previously known. At Solink, we provide franchise owners the ability to not only compare store performance against their other locations but also benchmark their performance against ALL of the other stores using our system within an individual brand. While some businesses may need to reduce staff, owners should strive to leverage tools that drill down to the individual employee level to ensure that the team they are keeping are genuinely their best workers. We’ve recently had some of our customers move from a general Point-of-Sale login to individual employee logins which has improved employee performance and theft detection visibility.
Better Theft Detection Systems are More Important than Ever
When it comes to employee theft, there is a principle called the fraud triangle, i.e., the factors that lead up people stealing. With this triangle, there are three causes lead to theft: social pressure, opportunity, and rationalization.
With this recent minimum wage hike, two of these factors come into play, rationalization, and social pressure. Employees might be making more per hour, but it’s likely that business owners won’t be able to maintain the same staffing levels of previous years. The decrease in staff hours will lead to part-time employees potentially making less overall. It follows that these employees will feel an increased pressure to steal to make up the income difference and they will have an easier time rationalizing this theft because their employer is cutting their hours.
Therefore, it will be increasingly important to have a theft detection system in place that can quickly detect potential theft and act as a deterrent to future issues. Traditional theft detection policies will take too long to recognize theft as they rely on tip lines or missing revenue. Solink relies on an automated, exception-based reporting system to quickly identifies patterns that indicate theft. These insights are pushed to owners inboxes on a daily basis to ensure that they can take action quickly to nip these issues in the bud.
Prioritize Mobile Ordering and Automation
Mobile ordering, kiosks, and automation are reducing operating and staffing costs for businesses and improving customer experiences. With the recent wage increase, it’s likely that stores will need to cut down on staff hours which can have a negative impact on the customer experience. We recommend prioritizing and promoting alternative ordering options to reduce the workload on the front of house staff. In the same way, the staff is encouraged to upsell compatible items; they should be mandated to educate their customers on these alternative ordering methods.
Reducing Time Sinks on an Owner’s Time
Many small business owners are hands-on and wear a lot of hats with running the business, one thing they don’t account for is the value of their time. They consider their time as a sunk cost, anything they can take care of means $0 extra cost to the business. Antiquated processes and time sinks can reduce the amount of time an owner has to spend running other parts of their business, and if they are short staffed, an owners time becomes even more valuable since they can always help out the front and back of house staff.
Remember the adage: “There’s no such thing as a free lunch”?
An owner can lose time in many different ways, from manually matching up records from different transaction systems to having to drive to individual locations to review video or transaction records. At Solink, we strive to help franchisees run their business in the most efficient way possible. By providing our customers with an accurate 360 view of their business operations from anywhere at any time, owners can remotely access to in-store video can be leveraged to resolve customer experience issues, ensure store cleanliness and review suspect transactions with having to leave their home or office.
No one is sure how impactful this minimum wage increase will be on small business owners and franchisee, but one thing’s sure, whoever moves fastest to reduce the costs they can control will have the best chance to succeed in 2018.
If you think that any of the above points speak to your current issues or if you think you could be doing better you should contact our team today to see how we could help. Our goal is to provide a service that helps owners and managers run their business a more informed and efficient manner. Feel free to contact us if you have any recommendations on how we can help combat the wage increase as our software is continuously evolving to meet our consumer needs.
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