On February 1st the National Restaurant Association issued a report that included forecasts for 2022 and the “new normal” eateries face as the nation attempts to move away from COVID.  The report provided the following industry insights:

• Industry sales are anticipated to reach $898 billion in 2022
• Foodservice jobs will likely grow by 400,000, for total industry employment of 14.9 million
• 2022 will not be normal for multiple reasons, including food, labor, and occupancy costs, which will be elevated, all of which will impact industry profits
• 96% of operators experienced supply delays or shortages of key food or beverage items, starting in 2021 and likely to continue
• 51% of adult consumers stated that they aren’t eating as often as they would like, an increase of 6% from pre-pandemic levels
• 70% of eateries state that they are not adequately staffed to serve customers
• 50% of operators believe that hiring and retaining staff will be their greatest challenge in 2022
• The industry anticipates adding 200,000 jobs per year for the next decade
• 75% of operators plan to devote more resources to recruiting and retaining employees
• Operators plan to reduce their menu offerings and work to improve the quality of take-out and delivery food products
• 88% of consumers stated that they would be likely try take-out or delivery options if restaurants would use packaging that helps the food maintain the same temperature, taste, and quality as when it’s served in the restaurant
• Technology advances will continue to help the industry, with fully 80% of members stating that their use of technology helps to give them a competitive advantage
• Many operators will expand online ordering, reservations, mobile payment, or delivery management, along with back-of-the-house technology
• Consumers also prefer technology where it doesn’t diminish hospitality
• Outdoor dining is also favored by many consumers, and 40% indicate that they would select eateries with such options over those that do not have it
• To-go alcohol sales are also popular with consumers
• 54% of adult consumers say that takeout or delivery food is essential to their lifestyles, including 72% of millennials and 66% of Gen Z 
• 50% of operators think the availability of sidewalk, parking lot, or street seating will become more common during 2022
• 70% of Gen Zs and 62% of millennials stated that to-go alcohol along with take-out or delivery orders would make them more likely to choose one eatery over another without these options

As with many other surveys and data dumps, the results for this critical industry are mixed at best.  For those operators that have successfully pivoted during the pandemic and those that continue to do so, 2022 should be OK, but for those that remained viable only due to federal support programs, the coming year will not be a return to “happy days”.  

Article thanks to Mike Austin of the VASBDC network.

Hello there, I’m Cort Maddox.

I’m an adviser with the Laurel Ridge SBDC and today I get to come to you and talk about changes coming to the Virginia minimum wage.

Not sure if you’ve heard about this but as of May 1, 2021, in the state of Virginia, the minimum wage will go from $7.25 to $9.50.  

After that, we will see an increase on January 1, 2022 to $11.00 per hour then every January 1st thereafter until January 1, 2026 if will increase $1.00 per year until it eventually gets to $15.00 per hour.

All of this barring any adjustments from a Federal level, but right now, that’s the plan for Virginia.

Now I want to dive into how this is going impact your business then talk about things you can do to prepare.  

First, this is a 31% increase.  This is a dramatic increase and one we have not seen in the past.  This is going to impact your small business.

I want to go over a potential example to show we as consumers can expect to see and then show how businesses can try to manage this as well.

On January 1, 2022 the minimum wage will increase an addition 16% when it goes from $9.50 to $11.00 per hour.  This is a 52% increase which is a big increase given that the average business has an average overhead of about 20-30%.

When you increase your overhead expenses by roughly 52% you can see the impact.

In addition, this will mean an estimated increase of 13% in employer/employee taxes that you will pay on behalf of your employee.  This is about a $.50 increase per hour that will need to be taken into account.

Now, let’s consider a $15.00 product.  

In order to account for the estimated 59% increase, 52% wage increase plus $.50 per hour in taxes, you will now need to charge $23.85 for that same item to accomplish about the same margin.

That is a heavy hit for customers.

This is why we want to help you to come up with resources to lessen the impact.  We want to help you be prepared to make this adjustment without negatively impacting your current customers.

Our team wants to help you keep the number of disgruntled customers as low as possible.  We’re all dealing with a lot of things in life right now.  Adding another possible stressor to our lives right now is not something we want.

But, this change is coming and you need to be aware of what this change means.  

Please make sure you do not violate any labor laws during this process because the consequences will greatly impact your business as well.  

We will be hosting an online workshop to provide you more resources.  We want to help you navigate these changes because they are going to impact your business.

In the meantime, if you have questions or need help with any business challenge, reach out to our team, we’re here for you at no charge. 

Remember, we are funded by the state and local Economic Development Centers, not by small business owners.  We are here to serve as your resource.  Let us know how we can help!

 

 

Has life taken it’s toll on you and your business the last few months?  Do you feel overwhelmed, stuck and exhausted trying to keep your business going?

You’re not alone.  Your struggle is real.   Yet our struggles can bring us together.

And yet there’s great news. 

As humans, we are made to work with each other.  We are wired to look out for each other and to help each other.  And when we do, we are more likely to get things done.

By ourselves we cannot lift heavy loads and by ourselves, we cannot solve complex problems.  But when we work together, we are remarkable.

If you’re struggling, you do not have to struggle alone.  If you have business problems that need to be solved, you do not have to solve them alone.

Our team of experts is ready and available to work with you at no cost.  We can work together to solve complex problems and be remarkable with you!One local business owner reached out to our team and had this to say:

“Thank you so much to such a great organization and an amazing community! This feels more like home than anything ever has, for I know my voice and needs are not just heard, but also fulfilled.”

If you haven’t felt pressure in your business, you may.

Some small businesses are going to feel the impact of the Virginia Minimum Wage increase that goes into effect May 1, 2021.

Minimum Wage will increase from $7.25 per hour to $9.50 per hour on May 1, 2021 then on Jan 1, 2022 it will increase to $11.00 per hour.  Wages will continue to increase until it reaches $15.00 per hour on Jan 1, 2026. 

Let’s make sure you’re prepared with a strategy in place.  Our team can help you prepare, at no cost to you.  We are funded by state and local Economic Development Centers, not by you the small business owner.

Together, we want to solve complex problems and be remarkable.  This is why we exist.  We’re here for you!

The Small Business Resiliency Training (SBRT) has been working in partnership with the Virginia Initiative for Growth and Opportunity (GO Virginia). 

The SBRT Team is made up of members of the Shenandoah Valley and Laurel Ridge Small Business Development Centers.   

Thanks to GO Virginia, small business grants were made available and those grants are having a lasting impact on small businesses throughout the Shenandoah Valley of Virginia. 

When the Shenandoah Valley Small Business Development Center partnered with Jon Henry General Store in New Market, VA change was quite noticeable.  The impact is still being felt.

When Jon Henry came into the SBRT program, he was feeling a bit overwhelmed.  Without systems and tools and place to keep his inventory as organized as he’d like, the SBRT program was his solution.

Thanks to the GO Virginia grant, Jon’s small business got a much needed boost. 

Listen in as Jon tells about the impact this program had on his small business.

 

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The Small Business Resiliency Training (SBRT) was made possible by a grant from the Virginia Initiative for Growth and Opportunity (GO Virginia).  This is a business-led initiative formed to foster private sector business growth along with the Small Business Administration and the Virginia Small Business Development Centers.  Participating localities include:  Augusta County, City of Harrisonburg, City of Waynesboro, City of Winchester, Clarke County, Frederick County, Rockbridge County, Rockingham County and Shenandoah County, VA. 

Have you ever said it?  Have you heard others say it?

Many people say it all the time.   “If it’s FREE, there’s got to be a catch.”

Look, I know a ton of small business owners that say the very same thing. 

But does every small business owner who gets free, personalized business coaching fail to grow their business?  Of course not. 

Just ask Jon Henry, owner of Jon Henry General Store in New Market, VA.

Jon thought that because our services were free there had to be a catch. 

After a year of working with our Small Business Development Counselors free of charge, he has implemented new tools and processes into his business that have given him back his time, lowered his stress, and helped him stay more organized which is making him more money.

Jon says that after a year of working with our counselors for free he feels like he should be paying us money, but he isn’t because we are funded by local Economic Development Administrations, not small business owners.

Now you have a choice to make.

You can keep working hard to figure out what to do to grow your small business, or you can do what Jon Henry did.

Reach out to one of our experienced small business counselors who can partner with you to take away the stress of running your business alone. 

Give us a call:  540-868-7093