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Locked: Costs are going up as 2018 approaches?

  • Last Updated:
  • Dec 30th, 2017 7:16 pm
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Deal Guru
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Mar 14, 2005
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The natural gas bill will be going down, according to the news.
De gustibus non est disputandum
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Sep 22, 2009
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Toronto
Becks wrote:
Dec 29th, 2017 7:43 pm
The natural gas bill will be going down, according to the news.
Hahahaha. Keep dreaming
Member
Jan 3, 2017
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229 upvotes
I have 7 employees. 5 are paid min wage, 2 are not. The 2 that are not are paid min wage are paid $18/hour and $17/hour. My prices will be increasing Jan 1st to compensate the hit to my bottom line. I estimate that if I implement zero changes the min wage increase will cost me about $50k. $35k in labor costs and another $15k or thereabouts in other areas. What most people forget is that it's just not min wage going up. The reaction to the min wage increase means that the cost of doing business in almost every aspect of my operation is increasing as well due to the min wage increase. I could take the hit and do nothing and survive but I choose not to. I don't want to take a $50k reduction in pay, who would?

Every single one of my suppliers announced a price increase months ago due to the increase in min wage which means the cost of my goods has also gone up. It's a butterfly effect. My costs have gone up because my suppliers costs have gone up and their costs have gone up due to the fact that their suppliers costs have gone up. So I have to deal with wage increases and cost of goods increases.

HOWEVER

Having said that in the end I predict the end result will be a wash in the profitability of my business. I will raise my prices, pay more for staff and inventory and end up in the same spot I was in last year, with a healthy thriving business. The price increase will be across the board and it won't be a massive jump. It will be about a 4-5% increase across the board on everything.

Consumers are price sensitive, but I believe Jan 1st this year will be the exception. People are expecting to see price increases everywhere and I suspect will not have the same reaction as they normally would to price increases.

Stories like this are something I can't grasp. Unless I'm misunderstanding something, a min wage increase is not the reason for this closure. I don't understand why they don't raise prices to compensate? Especially in an industry with huge wait lists such as daycare. Are fees regulated now? I know when our kids were in daycare, fees varied at each daycare location

https://barrie.ctvnews.ca/owner-of-coll ... -1.3722204
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Oct 26, 2003
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Winnipeg
^they can just raise their prices like every other business out there, unless something else is going on.
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Sep 23, 2009
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fryguy1987 wrote:
Dec 30th, 2017 1:41 am
Stories like this are something I can't grasp. Unless I'm misunderstanding something, a min wage increase is not the reason for this closure. I don't understand why they don't raise prices to compensate? Especially in an industry with huge wait lists such as daycare. Are fees regulated now? I know when our kids were in daycare, fees varied at each daycare location

https://barrie.ctvnews.ca/owner-of-coll ... -1.3722204
This is just a case of a game of chicken.

The operator is hoping the county/province will give them more grants to continue operations.

They don't make money charging individual families, their business model is dependent on grants.
Banned
Sep 22, 2009
691 posts
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Toronto
fryguy1987 wrote:
Dec 30th, 2017 1:41 am
I have 7 employees. 5 are paid min wage, 2 are not. The 2 that are not are paid min wage are paid $18/hour and $17/hour. My prices will be increasing Jan 1st to compensate the hit to my bottom line. I estimate that if I implement zero changes the min wage increase will cost me about $50k. $35k in labor costs and another $15k or thereabouts in other areas. What most people forget is that it's just not min wage going up. The reaction to the min wage increase means that the cost of doing business in almost every aspect of my operation is increasing as well due to the min wage increase. I could take the hit and do nothing and survive but I choose not to. I don't want to take a $50k reduction in pay, who would?

Every single one of my suppliers announced a price increase months ago due to the increase in min wage which means the cost of my goods has also gone up. It's a butterfly effect. My costs have gone up because my suppliers costs have gone up and their costs have gone up due to the fact that their suppliers costs have gone up. So I have to deal with wage increases and cost of goods increases.

HOWEVER

Having said that in the end I predict the end result will be a wash in the profitability of my business. I will raise my prices, pay more for staff and inventory and end up in the same spot I was in last year, with a healthy thriving business. The price increase will be across the board and it won't be a massive jump. It will be about a 4-5% increase across the board on everything.

Consumers are price sensitive, but I believe Jan 1st this year will be the exception. People are expecting to see price increases everywhere and I suspect will not have the same reaction as they normally would to price increases.

Stories like this are something I can't grasp. Unless I'm misunderstanding something, a min wage increase is not the reason for this closure. I don't understand why they don't raise prices to compensate? Especially in an industry with huge wait lists such as daycare. Are fees regulated now? I know when our kids were in daycare, fees varied at each daycare location

https://barrie.ctvnews.ca/owner-of-coll ... -1.3722204
This is Canada, home of the sheep consumer. Of course they will pay..what choice do they have?

On Jan 1, assume the position. We’re experts at it. Ask Kathie and Justine.
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Oct 22, 2007
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London
fryguy1987 wrote:
Dec 30th, 2017 1:41 am

Stories like this are something I can't grasp. Unless I'm misunderstanding something, a min wage increase is not the reason for this closure. I don't understand why they don't raise prices to compensate? Especially in an industry with huge wait lists such as daycare. Are fees regulated now? I know when our kids were in daycare, fees varied at each daycare location

https://barrie.ctvnews.ca/owner-of-coll ... -1.3722204
Just because they own a business doesn't mean they know how to run a business.
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Sep 22, 2009
691 posts
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Toronto
Ottomaddox wrote:
Dec 30th, 2017 11:29 am
Just because they own a business doesn't mean they know how to run a business.
You mean like politicians who have never ever run a business in the real world (Kathie) who think they know more than the man on the street? Exactly.

Everyone has their breaking point and it is both ignorant and naive to think that the endless assault on the taxpayer wallet WON'T claim victims. Why do you hold onto the fallacy so relished by socialists that the taxpayer wallet is limitless?

Many businesses work in highly competitive markets where any price increases result in customers changing suppliers. Some may choose to.absorb the wage increase but will soon realize that this isn't sustainable. Most will pass it along via higher prices and guess what??? EVERYONE PAYS MORE SO KATHIE CAN [...] FOR VOTES.
Last edited by Mars2012 on Dec 30th, 2017 11:37 am, edited 1 time in total.
Reason: reported/derogatory term removed
Member
Jan 3, 2017
316 posts
229 upvotes
theguru wrote:
Dec 30th, 2017 11:37 am
You mean like politicians who have never ever run a business in the real world (Kathie) who think they know more than the man on the street? Exactly.

Everyone has their breaking point and it is both ignorant and naive to think that the endless assault on the taxpayer wallet WON'T claim victims. Why do you hold onto the fallacy so relished by socialists that the taxpayer wallet is limitless?

Many businesses work in highly competitive markets where any price increases result in customers changing suppliers. Some may choose to.absorb the wage increase but will soon realize that this isn't sustainable. Most will pass it along via higher prices and guess what??? EVERYONE PAYS MORE SO KATHIE CAN [...] FOR VOTES.
Everyone has their breaking point yes, but it's fallacy to blame the reason for closing doors on the minimum wage increase. I mean they are giving up without even considering raising their rates? it may be the straw that broke the camels back but that's not how it's presented in the article. Also, I can fully appreciate I don't completely the nuances of running a daycare but it's a for profit daycare as explained in the article. When I was putting my kids into daycare, which wasn't that long ago, wait lists were long, fees were very expensive and there was a huge shortage of places available who actually had space.

Sure some people may not pay the increased rates but I'm sure there are others who eagerly would. I admit it's possible I may be completely out of touch here with the reality of running a daycare but it seems to me there are/were other issues present that contributed far more to the business closing it's doors
Last edited by Mars2012 on Dec 30th, 2017 12:27 pm, edited 1 time in total.
Reason: edit in quote
Banned
Sep 22, 2009
691 posts
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Toronto
fryguy1987 wrote:
Dec 30th, 2017 12:27 pm
Everyone has their breaking point yes, but it's fallacy to blame the reason for closing doors on the minimum wage increase. I mean they are giving up without even considering raising their rates? it may be the straw that broke the camels back but that's not how it's presented in the article. Also, I can fully appreciate I don't completely the nuances of running a daycare but it's a for profit daycare as explained in the article. When I was putting my kids into daycare, which wasn't that long ago, wait lists were long, fees were very expensive and there was a huge shortage of places available who actually had space.

Sure some people may not pay the increased rates but I'm sure there are others who eagerly would. I admit it's possible I may be completely out of touch here with the reality of running a daycare but it seems to me there are/were other issues present that contributed far more to the business closing it's doors
Anyone who has run a business in this province can attest to the unrelenting unslaught of costs, bureaucracy and frustration that confront them. This governments goal is to make everyone a serf of the state - either thru being a civil servant or on social assistance. A financially dependant voter is putty in the hands of a socialist.
Banned
Sep 22, 2009
691 posts
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Toronto
PointsHubby wrote:
Dec 29th, 2017 6:31 pm
Huh ?

The Feds are going to cut Small Business Corp Taxes (up to $ 500 K in earnings)

How in earth is this a bad thing ?

Good for start ups, good for growth.

Sorry don’t follow your logic.
Perhaps you should read a little more on the recent tax changes to small.businesses versus the liberal propaganda papers. Might enlighten you.
Banned
Sep 22, 2009
691 posts
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Toronto
theguru wrote:
Dec 30th, 2017 3:25 pm
Perhaps you should read a little more on the recent tax changes to small.businesses versus the liberal propaganda papers. Might enlighten you.
Hate quoting the commie broadcast corp but here you go. Dig just below the surface of any government proposal and the stench will.ovedwhelm you. How's that french villa treating you, Billy? Oops. I forgot to tell you about it.

http://www.cbc.ca/beta/news/politics/an ... -1.4282027
Banned
Sep 22, 2009
691 posts
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Toronto
Warning! Fact alert. Guess socialism defies all economic rationale and logic?

Higher prices
Less jobs
Fewer employees working harder
Lower customer service due to fewer staff
Inflation

Wow. Reads like a love story from the lib handbook.

http://windsorstar.com/news/local-news/ ... -wage-hike

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