As if small business owners didn’t have enough to contend with in the coming months, like the looming threat of tax increases and healthcare reform, small business in 10 states saw an increase in their minimum wage requirements on January 1 of this year.
Though the federally mandated minimum wage will remain $7.25 per hour, the increases – ranging from as little as 10 cents per hour in Missouri to as much as an extra $1.00 per hour in the city of Albuquerque – will likely have a dramatic effect on small businesses.
Obviously, an increase in wages could add significant costs for small businesses with a good amount of hourly workers that fall below the minimum, but it could also mean necessary increases for those workers that fall just above the new minimum too.
Even for small businesses in Arizona, Oregon, Montana, or Ohio, where the rate jumps just 15 cents – the added cost could mean nearly $10,000 additional dollars per year for businesses with 30 full time employees. With the added costs of healthcare reform, that extra $10,000 could very well be too much to bear for some businesses – leading many owners to cut employee hours or to cut some positions altogether.
The plus side? There will not be a shortage of lenders, like Direct Capital, willing to lend to small businesses in 2013. A loan like a working capital loan could be just the thing a small business owner needs to make up for some lacking cash flow or to help offset some of those big hits to their bottom lines.
Are you operating in one of these 10 states? How do plan to deal with the increase?