Take a hike: How to cope with a higher minimum wage
A pizzeria owner in Washington state offers a four-pronged strategy for staying profitable in an era of rising labor costs.
We live in a constantly evolving world where the one consistency is change. But many fear change, and the recent change that has put more fear in pizzeria owners’ hearts than any other is the rise of the minimum wage.
Here in Washington state, payroll for a 20-employee business will soar by $80,000 per year after the state’s minimum wage hike is fully phased in over the next three years. Let that sink in: an extra $80,000 a year for 20 employees. Fortunately, we have time to plan.
Will Lawrence-Grant, shown here with employee Daniel Curtin Stubbs, says he got ahead of the minimum wage hike in Washington state and made changes that boosted his pizzeria’s sales by 20%, despite higher labor costs.
How can you prepare and strategize for such a huge increase in your costs? Here’s what I have done to not only get ahead of the hike but also boost our total sales by 20%. Think of this as your four-pronged strategy for success if and when the minimum wage rises in your city or state.
Adjust your pricing.
Don’t hesitate—raise your prices right away! People in your city or state have voted for this wage increase, so most will support you and stand behind the decision they have made. To determine how to price and position your menu items for maximum profitability, think seriously about hiring an expert (such as a menu engineer) to guide you through a menu overhaul and redesign. It’s time to work smarter, not harder, for your money. The earlier you raise your prices, the more chances you will have to do it again later without offending your customers.
Take a closer look at your branding.
Even if your pizzeria has been around for 30 years, you can always rebrand and remind people about who you are, what makes your place special, and the value you offer. Repaint your shop, choose some new staff uniforms or buy some new chairs. Do you find it hard to see your pizzeria from an objective viewpoint? Try a little trick I use: Every time I walk into my shop, I try to look at it like it’s the first time I’ve ever been there. Is it clean? Are people friendly and smiling? Does it smell good? When you spend 365 days a year in the same place, you tend to forget what kind of first impression it makes on a new customer. I’m not saying go crazy here, but freshen up the place!
Ditch the coupons.
Get them outta here! I struggled with this one more than any of the other changes I made. I got rid of our “2 for $22 deal,” which we had been running for about five years, and it was a disaster! I became the most hated man on our little island, and I immediately brought it back. It was so frustrating and scary all at once. How could I let my business be held hostage like that? When I finally discontinued the coupon for good, I changed it to a 25% noncoupon discount that applies strictly to online orders, and I’m happy to say I will never do coupons like that again!
Start taking online orders.
I can’t stress how important online ordering is to your shop. This isn’t just a trend; it’s the way of the future. People don’t have time to call for a pizza—ironically, because they are on their phones too much! As mentioned above, I moved all my discounts from print coupons to online ordering. It’s really a win-win. I spend less money now on staffing, so I can give better discounts with online ordering. One-third of my sales are now online, and the simple fact is, this technology is one of the biggest changes to our industry. Computers have completely changed how restaurants work in the past 20 years. This is just the next progression in our society’s evolution. The future is here. If you’re not offering online ordering, do it now!
These are just a few ideas to help you survive the storm to come. As the times change, your pizzeria will have to change, too, so please take these suggestions seriously. Meanwhile, if you have great ideas of your own or want to talk more about mine, you can reach me online at email@example.com!