This question comes up every year. With the added costs of having to pay everyone 1.5 X their hourly rate plus a day in lieu, it's very questionable if it's worth opening or not. It's a double-edged sword. If you decide not to open, you have to pay the team anyway.
However, having clarity on your numbers enables you to make the right decisions for your business.
I always suggest to start with working out your wage cost, and lets's do a really quick example:
- Open on a public holiday -
- You have four staff who get paid an average of $23.50 per hour.
- X 1.5, their new hourly rate is = $35.25 (awesome for them, not so much for us).
- Then add on 11%, 3% KiwiSaver, and 8% holiday pay
- A new hourly rate of = $39.12.
- So we have four staff on = $39.12 per hour
- They work 8 hours each = $1252.08
- Plus day in lieu (average 8 hours x 4) = $752
Therefore an estimated wage cost for the day is $2004. If you want to run at a 30% wage cost, you would need to turn over $6550 approx to make that.
If you were to close and the holiday falls on a normal working day, you need to pay everyone for that day, e.g., $752.
There are many factors that you need to consider, especially in these times. Ask yourself these questions:
- What are my daily operating costs
- How has trading been on similar days
- What external factors are going to affect my trade
- Should I run a 15% surcharge to help cover this
- What is the feeling of the community I am serving
It's essential to answer these questions and work out if it's worthwhile to open or if you are better to take the time and have a break.
It's a question of rest over risk - what is your appetite for this?
Hospo owners work tough and long hours. Taking 10 minutes out to work this out, which may potentially result in you and your team taking a break, is a good result. On the flip side, if the numbers stack up and your predictions for turnover will be great, that is also a good result. The one result you don't want, is opening and working for nothing.
RICHIE WALSHE
THE GROWTH COACH - HELPING HOSPO OWNERS TO MAKE MORE MONEY AND WORK LESS.
www.thegrowthcoach.co.nz
