Do you know how the rising minimum wage and national living wage will impact your business?
The rising Minimum wage and the new National Living wage are hot topics at the moment, but do you know how they will affect your cash flow? Have you put things in place to minimise the impact to your business? Can you afford to increase prices without it having a detrimental effect on your growth?
These are all questions that the small business owner should be asking themselves in the lead up to the increase so that the increase becomes a smooth transition rather than an obstacle that could have disastrous effects on the business, especially if it means reducing hours or worst case scenario having to make people redundant because no plans were put in place to cope with rising costs.
The new rates of pay come into effect on 1st October 2015 for Minimum wage and 1st April 2016 for National Living wage.
Based on employing someone aged 21 or over your costs will rise from £6.50 an hour to £6.70 an hour with the increases in Minimum wage. How will this affect a monthly wage bill?
Based on employing someone aged 25 or over your costs will rise from £6.70 to £7.40 which is the increase for the National Living wage.
Does your business have the cash flow to cope with those rises?
What can you do to protect your cash flow other than increase your prices and pass on the additional cost to your customer?
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Here are 3 simple steps you can take now to ensure cash flow safety
1. Review and evaluate all your current overheads
2. Communicate with all your suppliers to take advantage of any incentives they might offer their customers
3. Would invoice factoring improve your cash flow
If you need a little help thinking this through then give us a call and we'll be happy to chat it through with you on 01989 550633
Here's to your increasing profits!
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