Laurabeautician
Active Member
will the new national living wage affect your business in any way? Will you increase your prices to compensate for the rise?
How will the living wage affect your business?
- Thread starter Laurabeautician
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daydreams01
Well-Known Member
Yes it's great for staff but businesses will have to find the extra money from somewhere so prices will have to increase to be able to afford it. I think it's a gradual phased increase over a few years so hopefully won't be too bad. It will make it harder for me to afford to pay anyone else tho, will have to go down the rent a chair route in the future I think!
surf girl
Well-Known Member
I'm interested to follow this thread, I feel unsure about it from an employers perspective, there's no way I could afford to pay someone the incresed nmw, I can barley afford the now nmw, I think employers will need to increase prices, which will in turn loose customers, which will then lead to unemployment of staff because they can't afford to keep them... Am I on my own thinking this?
squidgernetball
Ubergeek
I wish they would raise the vat threshold. That would make a massive difference to small business's. Struggling to pay current nmw so not quite sure how we'll cope with a pay rise as well as a pension plan for any staff members!
Vic x
Vic x
daydreams01
Well-Known Member
Am i right in thinking that the NMW can include commission earnt? For example lets say that a weekly wage on NMW would amount to £250 for the hours worked then that £250 could be made up of a basic rate of say £200 plus a commission of £50 but if they hadn't had a good week and not hit the commission target you would still have to pay them the £250. I'm thinking of incorporating like that, a basic plus commission or Flat NMW whichever works out best for the employee.
daydreams01
Well-Known Member
I'm not vat registered yet but can see in the next 2 years having to do it. What is the current threshold, is it £72000? Every time I feel like I'm getting closer to making a decent living doing this then something else crops up and I need to work even harder to cover my costs! I have had a girl come today to enquire about work, I really need someone more as an assistant on a casual basis but she has just qualified at level 3 and desperate to get some salon experience, seems lovely so would be good in that I can give her blowdrys or cuts when we are too busy to do them ourselves. The only drawback is she is 26 which means I need to pay her more and I'm only just paying myself! It's catch 22, was really looking for someone younger as it's more affordable but would like to give her a chance!
surf girl
Well-Known Member
How can basic rate be £200? If nmw is £250 for the hours worked?
squidgernetball
Ubergeek
We've just employed the first member of staff that I didn't give birth to. She's employed 2 days per week. I opened her 2 days up on Tuesday and she's been really busy today and is pretty much fully booked tomorrow. I don't know how long it'll last but so far so good x
surf girl
Well-Known Member
@Tori1992 referring to your other post, @squidgernetball has started off with 2 days and it seems to be going good 
give it a whirl
give it a whirl Glad you found someone! You seem so helpful on here they will gain a lot from working for you! X
daydreams01
Well-Known Member
Was just using that as an example but I'm sure that the wage can be made up of a flat rate plus a commission and the employee gets whatever is the greater amount, so if she has a good week or month then it would amount to more than NMW but if it's been quiet, the NMW gets paid.
squidgernetball
Ubergeek
Thank you that's a lovely thing to say x
squidgernetball
Ubergeek
Just for information as well. I have to give my accountant wages broken down into hourly rate and amount of hours plus commission as a separate amount. You may be able to use commission a part of the salary to make it up to nmw but I personally don't think that's ethical. Having said that, nearly every salon I know classes the staff as self employed but they have to stay all day and only take a percentage on what they do. One lady said she had to be in from 9 to 5 for the percentage on an eyebrow tidy as that was her only client all day. Totally illegal!
It's only the truth
x
daydreams01
Well-Known Member
Thanks, Just trying to figure out the best way to do things. My stylist currently gets NMW and commission which probably makes it fairly close to the new rates being put in place. I might consider just scrapping the commission altogether but do think it acts as an incentive to work harder. Lots to consider!
Yes, but you've also got to factor in the increase in NI Employer allowance (up 50%) and the tax free allowance for dividends (£5k), so not quite as cut and dried as '2% Vs 40%'.
Laurabeautician
Active Member
There is so much to consider. I work from home and try to keep reasonable without been cheap. I dont manage to give myself a proper wage as it is, so unless i start increasing my prices, it wont be worth my time continuing. But then am worried that if i increase my prices that i will lose clients.
I have recently done a couple of days in a local salon on self employed basis to try increase my income but I was working at the salon 9-7 and coming home with £12.50.
Trying to consider all my opinions. Dont want to lose the business i have worked so hard for. What increase would people put their prices up by?
I have recently done a couple of days in a local salon on self employed basis to try increase my income but I was working at the salon 9-7 and coming home with £12.50.
Trying to consider all my opinions. Dont want to lose the business i have worked so hard for. What increase would people put their prices up by?
BannerPenguin
Well-Known Member
Essentially if everyone has to put prices up to fuel overheads all it will be is increase the base price across everyone in your area. For example an average set of £25 nails may not cost £28/30 after everyones adjusted... Clients would have to pay more but if everyone starts charging round about the same prices it won't be an issue as there will be no cheap alternative.
