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Business workshop

Business owners listen as Rebecca Plevel of Plevel Law, Derrick Doba of Doba CPA and Pete Sittnick, a managing partner of two San Francisco restaurants, speak at a workshop at the Museum of Northern Arizona March 18. 

About 20 business owners from all around Flagstaff attended a workshop this past week on running a business while seeing the costs of doing business increase.

At the workshop, business owners heard from someone who experiences a higher cost of doing business every day.

Pete Sittnick, who is a managing partner of two high-end restaurants on the San Francisco waterfront, fielded questions and spoke about how they have operated in a city that not only has a $15 minimum wage but also other requirements on business owners.

For example, San Francisco requires businesses provide all employees, including those who work on a part-time basis, with health care. This is not something that is required or has even been floated in Flagstaff.

To help deal with the added expenses, their two restaurants, as well as many others, have a surcharge that customers pay on top of their regular bill and tip, Sittnick said.

Sittnick said when they first opened their doors in 2008, the charge was 3 percent, but it has since risen to 5 percent. Some businesses in Flagstaff have implemented similar measures.

Sittnick said most of their customers don’t have much of a problem with the charge, especially as they explain it in a positive way on the bill. He said they found the positivity important. In the explanation, they say the charge is to benefit their staff and provide them more opportunities as opposed to blaming the city’s laws.

Sittnick added it is important to find smaller, behind-the-scenes ways to save money. For example, at their restaurants they had a daily staff meeting that they shortened to 15 minutes and changed so that only the employees who needed to be there attended. Everyone else would be briefed when they came into their shift later in the day. That alone saved them about $8,000 in pay.

Sittnic did admit that San Francisco is in a very different situation than Flagstaff. That city is surrounded by a much more populous metro area and is seeing an explosion in high-paying jobs because of the tech industry.  

Since the last election, business owners have been watching the impact of the city’s higher minimum wage. It is for that reason that Steve Finch, president of the Flagstaff Lodging, Restaurant & Tourism Association, said he organized the workshop and hoped the advice Sittnick provided could help local businesses.

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Finch said although he wishes the minimum wage wasn’t so high, business owners may need to look to the future instead of at the last two elections.

“We have to now move forward and make this work with what cards we’ve been handed,” Finch said.

Businesses may not be the only ones looking to learn more about the effects of a higher minimum wage. During the city’s budget process, councilmembers have expressed to staff interest in gathering information from other cities that have higher minimum wages on how the change affected the economy.

Councilmembers also suggested the city begin gathering information on the Flagstaff economy as the minimum wage law continues to take effect.

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Adrian Skabelund can be reached at the office at askabelund@azdailysun.com, by phone at (928) 556-2261 or on Twitter @AdrianSkabelund.

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