Category: business strategies

We have been discussing the positives and considerations of organic growth vs acquisition, this is a very topical subject especially with a buoyant M&A appetite, buy and build company structures are ever increasing and within fragmented sectors.

So how do you turn a small business into a big one? Or, grow an already significant company into market dominance? For business owners and executives, these are the critical questions that demand sound planning, consistently astute decisions and successful execution.

The approaches to growing businesses are as numerous and diverse as the range of businesses themselves. While small companies tend to favour an internally focused organic approach and large companies usually favour growth by acquisition, both avenues are open to companies of any size. The key is formulating an appropriate strategy, and assembling a strong business case based on the strategy.

Build or Buy?

Either “build or buy” can be effective, but each present risks and trade-offs that must be carefully considered and skill fully addressed if success is to be achieved. Whether the growth strategy is introspectively organic or includes such inorganic approaches as mergers, acquisitions, joint ventures, or organic-inorganic hybrids, care must be taken in planning and execution to ensure the end result creates real value and positions the business for future opportunities.

Growth From Within

Businesses that pursue organic growth – growth from within – learn that such growth requires time and nurturing, as expanding must be done prudently, at each point biting off only what the business can chew, and allowing each move to digest before expanding further. The risks of organic growth lie in expansion that outpaces the ability to effectively manage, stretches resources too thin, strains capital, or diverts focus from the business’ core mission. Businesses that grow organically can control their rate of growth and normally face less cultural and integration challenges than those that choose an inorganic strategy.

Inorganic Growth-Accelerated Approach

With inorganic growth, via mergers, acquisitions, and joint ventures, market share and assets are immediately larger, new skills and knowledge become available, and access to capital and new markets may be easier.

If you have decided to purchase an existing business instead of starting from scratch and you’ve done some initial research to find out more about the business you’re thinking of buying. What now? If the business still looks promising after your preliminary analysis, your next step is to have your acquisition team (your accountant, solicitor and banker) should start examining the business’s potential returns and its asking price. Whatever method you use to determine the fair market price of the business, your assessment of the business’s value should take into account such issues as the business’s financial health, earnings history, growth potential, and intangible assets (for example, brand name and market position).

To get an idea of the company’s anticipated returns and future financial needs, ask the business owner and/or accountant to show you projected financial statements for the business. Balance sheets, income statements, cash flow statements, footnotes and tax returns for the past three years are all key indicators of a business’s health. These documents will help you do some financial analyses that will spotlight any underlying problems and also provide a closer look at a wide range of less tangible information.

Among other issues, you should focus on the following:

Excessive or insufficient inventory.

If the business is based on a product rather than a service, take careful stock of its inventory. First-time business buyers are often seduced by inventory, but it can be a trap. Excessive inventory may be obsolete or may soon become so; it also costs money to store and insure. Excess inventory can also mean there are a lot of dissatisfied customers who are experiencing lags between their orders and final delivery or are returning items they aren’t happy with.

The lowest level of inventory the business can carry.

Determine this, then have the seller agree to reduce stock to that level by the date you take over the company. Also add a clause to the purchase agreement specifying that you’re buying only the inventory that’s current and saleable.

Accounts receivable.

Uncollected receivables stunt a business’s growth and could require unanticipated bank loans. Look carefully at indicators such as accounts receivable turnover, credit policies, cash collection schedules and the aging of receivables.

Net income.

Use a series of net income ratios to gain a better look at a business’s bottom line. For instance, the ratio of gross profit to net sales can be used to determine whether the company’s profit margin is in line with that of similar businesses. Likewise, the ratio of net income to net worth, when considered together with projected increases in interest costs, total purchase price and similar factors, can show whether you would earn a reasonable return. Finally, the ratio of net income to total assets is a strong indicator of whether the company is getting a favorable rate of return on assets. Your accountant can help you assess all these ratios. As they do so, be sure to determine whether the profit figures have been disclosed before or after taxes and the amount of returns the current owner is getting from the business. Also assess how much of the expenses would stay the same, increase, or decrease under your management.

Working capital.

Working capital is defined as current assets less current liabilities. Without sufficient working capital, a business can’t stay afloat—so one key computation is the ratio of net sales to net working capital. This measures how efficiently the working capital is being used to achieve business objectives.

Sales activity.

Sales figures may appear rosier than they really are. When studying the rate of growth in sales and earnings, read between the lines to tell if the growth rate is due to increased sales volume or higher prices. Also examine the overall marketplace. If the market seems to be mature, sales may be static—and that might be why the seller’s trying to unload the company.

Fixed assets.

If your analysis suggests the business has invested too much money in fixed assets, such as the plant property and equipment, make sure you know why. Unused equipment could indicate that demand is declining or that the business owner miscalculated manufacturing requirements.

Operating environment.

Take time to understand the business’s operating environment and corporate culture. If the business depends on overseas clients or suppliers, for example, examine the short- and long-term political environment of the countries involved. Look at the business in light of consumer or economic trends; for example, if you’re considering a store that sells products based on a fad like Crocs, will that client base still be intact five or 10 years later? Or if the company relies on just a few major clients, can you be sure they’ll stay with you after the deal is closed?

Final word; you may be tempted to acquire a competitor to take it off the market or gain access to its products and revenue. In most cases it will be risky. If you are not familiar with the process, bring in an adviser to help. Due diligence is tricky. Valuations are even harder. Discount the current revenue stream in your valuation. It will likely go down.

On the other hand, you may be able to increase the size of your business by 50 percent or more overnight. It could be a good long-term strategy, as the business consolidates.

While some business people avoid e-mail and mobiles during their time off, others find it tough to remain out of contact.

Anyone who has sat on a Caribbean beach this summer will be familiar with the trill of mobiles producing an instant response among supposedly off-duty executives.

Mobile phones, BlackBerries, WiFi and sub-miniature laptops make it all too possible to pack the office along with your luggage. But how in touch or out of touch should businesspeople be?

So what happens if you run your own firm?

You might have the big salary that comes with the top job, but little time to enjoy it.

Can CEOs ever release their grip and truly take a break?

It is true to say that people get stuck in particular patterns that need breaking, making the point that if a company cannot operate for a few weeks without one particular employee, then the other people on the team haven’t been hired well or trained properly.

Remember also that anyone can fall ill, or have a family crisis, at any time. They can be taken away from work by such things at no notice, for long periods of time.

High quality global journalism requires investment.

A Penna research study among 600 chief executives, managing directors and directors of FTSE 250 companies has shown that an overwhelming 10 per cent of these people are bordering on “derailment”. This is part of a study that was undertaken on EQ (emotional intelligence quotient), which is intended to help people better understand their emotional and social functioning – to be more successful with less effort and consequences. For leaders this is a useful tool, as it helps them to assess their ability to empathise and connect with staff, which in turn directly affects the productivity and morale of their employees, especially in a recession and in adversity.

When executives take their Blackberry to the beach they are fundamentally putting their health at risk. It also shows a lack of trust in their colleagues to handle situations while they are away. They are not allowing themselves to de-stress, which can result in the derailment of themselves and, potentially, their businesses.

The biggest obstacle to disconnecting isn’t technology: it is your own level of commitment or compulsion when it comes to work. If you work 80 hours a week, 50 weeks a year, you may find it pretty hard to get your head out of the office – and even harder to break the association between hearing the ping of an incoming email and immediately shifting into work brain.

That association is exactly why it is so useful to develop strategies that put your devices in vacation mode. You probably don’t leave Oreos in the cupboard when you are dieting; for the same reason, it’s best to put work out of arm’s reach when you’re on vacation. Instead of relying on sheer willpower to keep you from checking in on work, you can use your vacation tech setup – and a little up-front planning – to support your efforts to minimise work time.

With that setup in place, you will be able to enjoy the benefits of online connectivity and digital tools, it is even more important to get away on a very rare occasion even if it just to breathe and keep all of your personal relationships in order as well as the benefit  of disconnecting from work. And instead of apologising for bringing a phone on vacation, you will be able to relax even with your devices in tow.

Leadership undoubtedly has an impact on the value of the business, especially from an investment perspective. Companies have always been indexed with a market value based on a measure of their finances. And, while the finances of a business are important, potential investors may seek to base their investments on intangible metrics like brand, strategy and leadership.

A recent debacle after decades arming American soldiers, first with the Vietnam era M16 and later the modern M4 rifles carried in Iraq and Afghanistan, famed gun manufacturer Colt lost its contract with the military in 2013. It never recovered. Colt Defense LLC filed for bankruptcy after 179 years in business.

The downturn for Colt seems to have started after the company, which had relied on sales to the government, lost a multimillion-dollar bid to arm the military, Colt’s chapter 11 filing came after earlier, failed attempts to restructure its $350 million debt were rejected by the company’s bondholders. Last November, The Wall Street Journal reports, Colt borrowed $70 million from Morgan Stanley in a bailout loan to allow the company to pay down interest on its debt, but was this a leadership issue?

Here’s an interesting contradiction: According to a survey from executive team consultancy Gap International, executives overwhelmingly agree that talent can make or break a company; yet only a minority actually say they invest in leadership development programs.

How important is maximizing a company’s talent? Very, said 85 percent of execs surveyed. In addition, 83 percent said the same of empowering employees to succeed. The problem: the “maximisation” bar is set too low.

Only 37 percent of leaders surveyed said they believe their employees can become top performers. What’s more, less than half said they would “invest innovation efforts” in leadership development or employee performance training this year

That data points to a disconnect between how employers think and how they act regarding talent development. If it’s really that important, why aren’t more companies investing in leadership training programs?

Leadership brand is a reputation for developing exceptional managers with a distinct set of talents that are uniquely geared to fulfil customers’ and investors’ expectations. A company with a leadership brand inspires faith that employees and managers will consistently make good on the firm’s promises. A Nordstrom customer knows that the retailer’s employees and managers will give her white glove service. Parents who take their kids to a Disney theme park assume that ride operators and restaurant personnel will be upbeat, friendly, and gracious. McKinsey clients understand that smart, well-educated consultants will bring the latest management knowledge to bear on their problems. A leadership brand is also embedded in the organization’s culture, through its policies and its requirements for employees. For example, the tagline of Lexus is “the pursuit of perfection.” Internally, the Lexus division translates that promise into the expectation that managers will excel at managing quality processes, including lean manufacturing and Six Sigma.

Previously, there had been no index of how companies’ leadership affects their value. Harvard Business Review, however, has developed a leadership rating index, created from a number of studies based on the effects of leadership.

Their index is broken down between individual — personal qualities of top leadership — and organisational — systems created to manage leadership throughout the organisation. Below is Harvard Business Review’s index on leadership.

Individual:

Personal proficiency: To what extent do leaders demonstrate the personal qualities to be an effective leader (e.g. intellectual, emotional, social, physical, and ethical behaviors)?

Strategist: To what extent do leaders articulate a point of view about the future and accordingly adjust the firm’s strategic positioning?

Executor: To what extent do leaders make things happen and deliver as promised?

People manager: To what extent do leaders build competence, commitment, and contribution of their people today and tomorrow?

Leadership differentiator: To what extent do leaders behave consistent with customer expectations?

Organisational:

• Culture capability: To what extent do leaders create a customer-focused culture throughout the organisation?
• Talent management: To what extent do leaders manage the flow of talent into, through, and out of the organization?
• Performance accountability: to what extent do leaders create performance management practices that reinforce the right behaviors?
• Information: To what extent do leaders manage information flow throughout the organization (e.g., from top to bottom, bottom to top, and side to side)?
• Work practices: To what extent do leaders establish organization and governance that deal with the increasing pace of change in today’s business setting?

In the end, successful leaders are able to sustain their success because these individual and organisational traits ultimately allow them to increase the value of their organisation’s brand – while at the same time minimize the operating risk profile.   They serve as the enablers of talent, culture and results driven people.

Every year, I travel to Oregon to visit my business partner to discuss cross border challenges US to Europe and the effects on business and personnel who hold office. This year’s trip coincided with Independence Day. I did not have the most of desirable starts when Springfield-OR experienced its first earthquake in 15 years, but it certainly set the day with a bump and even before we had a fireworks fest for the evenings celebrations.

Mark and I had an aperitif of fine Pinot Noir from the region. One of the amazing things I always learn from Mark is the fullness and wonders of Pinot Noir from Oregon. We started to discuss a recent project that Mark had undergone with one of his clients on employee engagement, the employee survey was particularly significant to the subject matter of employer trust, values and vision and covered many issues connected to employee satisfaction.

I questioned with Mark; is it not a company or manager’s dilemma that the organisation is not being made accountable or responsible, surely this is the route to the problem… all roads lead to Rome right?

Mark explained executive commitment aside, we frequently get asked this by managers: “How can I keep my team it engaged in the face of policies that put the company’s interests ahead of those of the employees?”

This is a very common exasperation among managers who are told to hold tight and ‘engage the troops’ in the face of blatant adversity imposed by senior management. Executives expect the managers to somehow bring team members along and even protect the integrity of the employer’s reputation while asking more from every employee on their team.

A manager cannot alter reality. If the company’s leadership team decides to push through a policy that will significantly impact the satisfaction of a large number of employees, managers cannot prevent the damage. This is especially true when the managers themselves are part of the affected group. But like all factors that are out of a manager’s immediate control, there are ways to soften the blow.

Often an organisation will work hard to attract a specific workforce only to impose policies and procedures that indicate they do not understand – or value – what really motivates that particular population. Examples might include hiring technical professionals who value autonomy and imposing onerous project-tracking processes. It would benefit the company to go back and ask, “If we are going to mandate part-time flexible shifts, what employee population would be a good fit?”

Ensuring the right job fit and aligned interests from the beginning is half the battle won.

On-boarding is a necessary first step in introducing new employees to the organisation and familiarising them with the company’s culture, practices, and values. However, for many, on-boarding remains a very paper-based procedure. Indeed the general consensus from our recent HR Transformation Forum was that organisations are striving to achieve innovative, exciting, and engaging on-boarding practices. However, with this comes the challenge of ensuring that on-boarding remains effective and valuable for all involved, from employees and managers, to the organisation itself.

Even if employees have no say in the unpopular policy decision that gets rolled out, managers can – and should – have them involved in identifying possible solutions at a local level that might alleviate the impact. If a manager has developed a strong working relationship with direct reports they will have the option of working together, to discuss the impact of the changes and how the team might adapt to these new parameters.

So what is the answer…

There is no doubt that organisations that repeatedly impose unpopular changes on their workforce will be driving down engagement over time, and there is only so much a manager can do to help individual team members remain engaged in the face of adversity. At the end of the day organisations need to carefully weigh the long-term effect a new policy will have on engagement against the short-term impact it will have on the bottom line. The trend of over-reliance on part-time staff in retail, for example, may backfire if companies don’t rethink their hiring practices and attract employees for whom part-time is not just the norm but the expectation.

According to Brian Groom, Business and Employment Editor at the Financial Times, companies need to take an approach that is “less paternalistic than it has been in the past. […] It is going to take give-and-take and both sides need this. The employees need this as well. […] On the optimistic side I think there are moves on both sides to try and make this work.” [See video here]

This may be true with regards to higher-educated staff working in ‘knowledge worker’ and expert roles. The leadership challenge of bringing along hourly workers – who often bear the brunt of organizational policies and have fewer options than highly skilled employees – remains great, especially if senior leadership is not prioritizing engagement.

I was recently a participant and attendee at the TechUK Annual Dinner in London when we heard a very interesting keynote from Jacquelline de Rojas on the future trends in technology, which all that was said, I was inspired by the last section of her presentation on the need for pragmatism in technology businesses.

How many times have you been in a meeting and someone says to you, “That’s a great idea, you should take the initiative and make it a reality.” What typically happens? Most of the time – not too much.  Most great ideas remain dormant because people don’t have the confidence, resources, time and/or investment to take action. And for those who take action, most are unprepared and thus find themselves spending their valuable time and money on a dream that simply goes astray.

Converting an idea into a reality (regardless of the required investment of time and money) is never an easy task. In fact, it is extremely difficult. Whether you are an entrepreneur or corporate executive, “giving ideas life” is much like giving birth to a child. You must own the responsibility regardless of the circumstances. No one will ever understand your idea or the dynamics associated with it better than you. In this regard, you are on your own and the journey will require you to learn about yourself – more than anything else will in your career.

In some regard there are too many ideas in the technology work and not enough leaders, executing real innovation, that can truly make a difference to society, community and our everyday lives.

One of most frustrating challenges facing business leaders today is closing what is commonly known as the execution gap (or sometimes the strategy gap). The execution gap is a perceived gap between a company’s strategies and expectations and its ability to meet those goals and put ideas into action.

Due to the complexity of people, businesses, and the societal constructs in which we operate, it is more difficult than it might seem at first glance to close this gap. A survey in 2014 found that 49% of business leaders perceived a gap between strategy and execution; 64% lacked confidence in their company’s ability to narrow it.

Business leaders can be split into two distinct groups in terms of their strategic thinking patterns: pragmatics or idealists.

While it’s safe to assume that most people carry some pragmatic and some idealistic traits in terms of their leadership styles and strategic thinking, it’s equally safe to assume that business leaders typically lean in one direction or the other.

Pragmatic leaders focus on the practical, “how do we get this done,” side of any task, initiative or goal.  They can erroneously be viewed as negative in their approach when in fact they simply view the entire picture (roadblocks included) to get to the end result.  It’s a linear, practical way of thinking and “doing.”

Idealist leaders focus on the visionary, big ideas.  It could be argued that they focus more on the end result than the path to get there, and they can erroneously be viewed as looking through rose-colored glasses when, in fact, they simply “see” the end goal and truly believe there is a way to get there.

Which are you — a pragmatic leader or an idealist?  Or do you think you’re one of the rare few who can maintain an internal balance between the two ways of thinking and executing?

It has been a busy two decades for the UK’s fashion industry. Over the past 20 years, it has become one of the world’s most internationalised and fiercely competitive retail sectors, while structural changes have changed the way fashion retailers do business.

The number of luxury consumers worldwide has more than tripled over the past 20 years, from roughly 90 million consumers in 1995 to 330 million at the end of 2013, according to an extensive study of 10,000 luxury consumers, conducted by Bain & Company in collaboration with Redburn Partners, Europe’s largest independent equities broker, and Millward Brown, a leading consumer research agency. Their report, “Lens on the Worldwide Luxury Consumer,” was released at a press conference in Milan.

According to the report, a net total of 10 million additional consumers yearly enter the luxury market to reach an estimated 400 million luxury consumers worldwide by 2020, and an estimated 500 million luxury consumers by 2030. In its analysis of approximately 10,000 luxury consumers, the report finds significant differences within the global luxury market and its consumer base, which is shifting from its historically homogenous base of affluent consumers worldwide to a broader and highly heterogeneous class of luxury shoppers. “The race is on to capture an explosion in worldwide luxury consumer growth,” said Claudia D’Arpizio, Bain partner in Milan and lead author of the report. “But the luxury consumer of the future will become increasingly heterogeneous and luxury brands and operators need an immediate upgrade to their consumer strategies to recognize and react to this growing diversity, else risk falling behind.”

Within luxury’s current 330 million consumer base, 55% (180 million) shift between luxury and merely “premium” purchases, including products such as designer second lines, beauty products and small accessories. This group comprises approximately 10% of global spending, purchasing an average of €150 per capita annually. The remaining 45% (150 million) represent “true luxury consumers” who consistently dedicate part of their discretionary spending to personal luxury products of various natures, usage occasions and price points, and make up roughly 90% of global spending, purchasing an average of €1,250 per capita annually. Additionally, the top 10% of spenders (15 million) within this group capture over half of its spending.

The luxury market is currently in slowdown and big brands such as Prada, Chanel, Louis Vuitton, Hermes, Mulberry and Burberry are feeling the pinch. Slow economic growth and political instability in China, Russia and the Middle East has led to a clampdown in spending which in turn has had a catastrophic effect on luxury goods firms. Consultants Bain and Company were recently quoted as saying that this slowdown will put the brakes on the global luxury goods sector for some time, with many brands reigning in any rapid expansion plans.

Retail is getting complicated. It is no longer a case of simply stocking shelves with desirable goods and waiting for shoppers to flock through the doors. Rapid developments in technology are changing the game.

Modern-day retailers have to make their goods available via websites and mobile apps, run efficient e-commerce operations alongside – or instead of – bricks and mortar stores, deliver goods to the consumer’s front door and be prepared to manage a backlash on social media if things go wrong.

Consumers are becoming more demanding and less willing to tolerate failure. They want a seamless shopping experience however they interact with a retailer. They may check out a store’s products on their mobile on the bus back from work, then wish to continue on the same page on their tablet or PC at home. That requires considerable technical prowess in managing the customer journey on different devices

Personalisation just got a whole lot smarter thanks to a new initiative from Burberry, which launching an innovation within technology as part of its London Fashion Week 2012. The British heritage brand has embedding digital chips that will unlock bespoke content in its new season’s coats and bags in a bid to entice consumers to pre-order them immediately after they hit the catwalk. RFID tags in clothing activate changing room mirrors when customers try a garment. The mirrors show a video about the making of the piece and its time on the catwalk.

As you can see from the video above, it’s designed to work with store tech only. To get the same experience on a customer’s phone requires NFC and a card that comes with the product when purchased.

I interviewed the CEO of Acumentive Limited a RFID specialist company, on the subject matter, Martin Kruse, gave his opinion; ‘RFID technologies have been around and capable for gathering ID/location much longer than people realise. For logistics/supply chain and store inventory, as it’s a technology to automate tasks and improve accuracy and productivity, its been quite readily understood and adopted as it’s a data feed into existing systems. For retailing, the limited use is more around creative new applications and ideas to use RFID – with mobile device capabilities really necessary to deliver a shopping enhancement.  It’s been possible to automatically identify a specific garment in a booth using an RFID tag for a decade, but identifying a specific mobile phone/customer and their preferences and linking in real-time store stock to recommend alternatives and additions that are actually available there and then is a more recent systems capability. And as for through-life benefits to the customer, such as building in an serialised identify for life and providing value add through the life of the product is something still to come. RFID actually is part of a suite of Auto-ID technologies – including Bluetooth tags, NFC and Locationing which together can enable a massive improvement to the shopping experience and the retailers ability to influence customer choice and satisfaction. I think the big trend is going to be doing what Acumentive has been doing for a decade now – focusing on how you get an improved, creative solution using multiple technologies working seemless together, using Bluetooth, NFC and RFID and mobile technologies together, and as this volume of data increases making sure we can see the wood for the trees and pick out the points that add value’

So with all this smart personalisation in luxury retail, technology again demonstrates how luxury consumers connect with the brand, the full range of products, with the broader fan base using social media and increase revenues by multiple sales to each consumer. The brand narrative is that consumers want to be part of and believe it’s worth paying a premium for goods. Forward thinking, luxury brands still need to establish themselves as a premium and valued brand within the luxury industry.

In my recent trip to the US to visit my business partner, we discussed many topics around employment in the US and in particular one very interesting subject was across President Obama’s call to raise the minimum wage to $15 an hour. Was this a good idea, what are the repercussions for small businesses, and importantly was there a better way to help low-income workers?

I imagined what would happen in the UK if the UK government decided to raise the hourly rate for unskilled labour, potentially this would be a time-bomb waiting to explode for SME’s.

Certainly an increase in the minimum wage raises the income of those who are employed, but it also raises the cost of hiring unskilled labour and can potentially reduce the number of people hired by businesses today. So there are winners and losers from this policy. Those who remain employed and receive higher incomes are better off, and those who would be employed if not for the increase in the minimum wage are worse off.

Here are five facts about the minimum wage and the people who earn it:

1: “Adjusted for inflation, the US federal minimum wage peaked in 1968 at $8.54 (in 2014 dollars). Since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 8.1% of its purchasing power to inflation. The Economist recently estimated that, given how rich the U.S. is and the pattern among other advanced economies in the Organization for Economic Cooperation and Development, “one would expect America…to pay a minimum wage around $12 an hour.”

2: “Nearly half (48.2%) of the 3 million hourly workers who were at or below the federal minimum in 2014 were ages 16 to 24. An additional 22.4% are ages 25 to 34, according to the Bureau of Labour Statistics; both shares have stayed more or less constant over the past decade. That 3 million represents about 2.3% of all wage and salary workers. (See more about the demographics of minimum-wage workers.) States with minimum wage higher than federal minimum wage.”

3: “Twenty-nine states, plus the District of Columbia and nearly two dozen cities and counties, have set their own, higher minimums. State hourly minimums range from $7.50 in Arkansas, Maine and New Mexico to $9.47 in Washington state, according to the National Conference of State Legislatures. Together, these states include 61% of the nation’s working-age (16 and over) population, according to our analysis of U.S. Census Bureau data. Among the cities that have enacted even higher local minimums are San Francisco ($15 by 2018), Seattle ($15 by 2021), Chicago ($13 by 2019) and Washington, D.C. ($11.50 by 2016), according to the National Employment Law Project.”

4: “About 20.6 million people (or 30% of all hourly, non-self-employed workers 18 and older) are “near-minimum-wage” workers. We analyzed public-use microdata from the Current Population Survey (the same monthly survey that underpins the BLS’s wage and employment reports), and came up with that estimate of the total number of “near-minimum” U.S. workers – those who make more than the minimum wage in their state but less than $10.10 an hour, and therefore also would benefit if the federal minimum is raised to that amount. The near-minimum-wage workers are young (just under half are 30 or younger), mostly white (76%), and more likely to be female (54%) than male (46%). A majority (56%) have no more than a high-school education.”

5: “The restaurant/food service industry is the single biggest employer of near-minimum-wage workers. Our analysis also found that 3.75 million people making near-minimum wages (about 18% of the total) worked in that industry. Among near-minimum workers aged 30 and younger, about 2.5 million (or nearly a quarter of all near-minimum workers in that age bracket) work in restaurants or other food-service industries. But because many of those workers presumably are tipped, their actual gross pay may be above $10.10 an hour. (Federal law, as well as wage laws in many states, allow tipped employees to be paid less as long as “tip credits” bring their pay up to at least the applicable minimum.)”

Alternative history can make for great suspense fiction. Imagine, for instance, what would have happened had the Nazis successfully invaded England in 1940? But if contemplating “what might have been” in fiction is fascinating, analysing “what might come to pass” in real life can be paralyzing – and dangerous. Just ask any of the cities that have passed their own version of minimum wage hikes.

As other cities and companies consider similar moves the big question is whether these new rules hurt or help the local economy – and the very people the legislators set out to assist. So far the answer depends on who you ask.

Some businesses argue that it will necessarily cost jobs: that small businesses, in particular, will be unable to afford to pay employees more and either will be forced to lay off staff or will have to close their doors entirely, and that consumers will suffer, as prices rise. There is plenty of anecdotal evidence that this occurs, as small business owners tell their stories.

Not all businesses will find this transition easy or painless. But if a small business’s profit margin is so razor-thin that it can’t pay its employees enough to allow them to live above the poverty line if they are trying to support even a single child, then perhaps that company might want to reconsider its business model?