What new wage laws mean for small businesses

The only thing that is constant is change


There will always be change, change in business dynamics, industry demands, technology, regulations and much more. All of which would most likely affect the way businesses, large or small, operate.

Some changes may be seemingly small albeit with over all gigantic impact on business operations. An example of such is change in labour regulations, particularly minimum wage.

The recent changes in Canadian provinces, Ontario and Alberta have sparked multiple reactions from affected stakeholders, majorly, businesses, community and employees.

In the midst of all these actions and reactions, one thing is certain, if your business strategy has been focused on paying the bare minimum wage, then your business is certainly going to be affected by the minimum wage laws.

An increased minimum wage means your human resources expenses are going to spike  and this will certainly affect your bottom line.

The bottom line which refers to business profitability is of utmost importance, not just for business owners’ compensation but also for business survival.

When such changes as labour costs affect the business bottom line, something has to give way. Emergency strategy sessions would be scheduled with everyone running around the place, figuring out how to address the issue in the least dramatic way.

In the simplest sense, your business profitability is the net of your revenue and expenses, so to make up for the dwindling effect of inevitable additional expenses, you try to cut costs in other areas, related or unrelated or you strategize on ways to boost revenue, for example, through increase in prices.

For which ever option chosen, either to cut costs, increase revenue or both, those affected directly or indirectly are not necessarily happy about it. In the real sense, the effects of these actions eventually trickle down to the final consumers.

Various media outlets reported recent outrage following reactions of small businesses to these regulatory changes. Some business communicated plans to cut back on paid staff benefits while others chose to transfer the expected increase in payroll expenses to the consumers.

Not only that, some businesses took the highway approach to change staff status from employee to contractor to deal with the new labour changes.

While the increase in minimum wages is expected to yield positive economic results, business have been hit, worker are disgruntled and the community has yielded to demonstrations, airing and expressing their disappointments.

The seemingly untouched businesses are those who have previously paid all workers above the new minimum wage and interestingly, some businesses have taken this change as a walk in the park situation.

Easier adaptation to changes in regulations like minimum wage can be attributed to the benefits of proactive and effective business planning.

Business planning is essential for every business as it creates a foundation of building active and adaptive strategies. This is one of the reasons why your small and medium scale business needs a business plan.

External factors like government regulations affect business operations as seen on the recent minimum wage changes. A business plan analyses different scenarios, assumptions and speculations that make it relatively easier to adapt to external changes, take advantage of opportunities and effectively manage risks and unforeseen negative factors.


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In the reality of a constant changing environment, ranging from social to technological, regulatory and economic factors, the best action for every small business is to actively engage in a flexible business planning.

Businesses should build effective and realistic business plans, taking into consideration as many variables as possible while being open to adaptation and new innovations.

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