I'm curious what you guys are thinking/planning for when your labor costs start to take a much larger bite out of your bottom line.
Here in CA, we have a min wage hike coming this July to $9/hour and another coming 12 months later to $10/hour. After factoring in the "full burden", that's going to be a huge increase.
When I opened my first wash 12 years ago, min wage was $6/hour and my base wash price was $7. Now min wage is soon to be $10/hour and my base price is $5. And volume has dropped over the years due to changes in consumer habits and increased competition.
I've head the "Do it better than your competitor and you will be fine" or "Make it up in volume" lines, but it would take a large increase in volume to make up for a 30% - 40% increase in labor costs.
Of course, I already try to run the best wash in town, and continually increase volume; that's a given.
But with these large labor cost increases looming, I think that cutting labor and/or raising the base price is going to be a necessity.
Not to mention how all our other costs have been creeping up over the years... chemicals, taxes, parts, water, electricity, insurance plus this ridiculous $150K bond us CA operators have to post, etc...
I think it's time for the base wash prices to go up.
What are you other full-serve/flex/express operators going to do?
Here in CA, we have a min wage hike coming this July to $9/hour and another coming 12 months later to $10/hour. After factoring in the "full burden", that's going to be a huge increase.
When I opened my first wash 12 years ago, min wage was $6/hour and my base wash price was $7. Now min wage is soon to be $10/hour and my base price is $5. And volume has dropped over the years due to changes in consumer habits and increased competition.
I've head the "Do it better than your competitor and you will be fine" or "Make it up in volume" lines, but it would take a large increase in volume to make up for a 30% - 40% increase in labor costs.
Of course, I already try to run the best wash in town, and continually increase volume; that's a given.
But with these large labor cost increases looming, I think that cutting labor and/or raising the base price is going to be a necessity.
Not to mention how all our other costs have been creeping up over the years... chemicals, taxes, parts, water, electricity, insurance plus this ridiculous $150K bond us CA operators have to post, etc...
I think it's time for the base wash prices to go up.
What are you other full-serve/flex/express operators going to do?