Friday, November 16, 2012 8:35:14 AM
I've said it before - this is just yet another sad example of the degredation of the values and morals of industry of the US.
Used to be, the "ideal, successful" business model was a balance between profits, expense and employee morale" - that balance has now shifted and put profits ahead of all. Employees are now treated as a debit on a balance-sheet, instead of the valuable asset they actually are.
Obamacare is simply trying to reset that balance by putting employees back towards the front of the bus.. but business are treating it like anathema. It`s a shame, really but that is the state of the world today.
Friday, November 16, 2012 8:28:48 AM
The general public will respond by either completely walking away from the high prices (other than an "elitist" few that don't consider price an issue), or they`ll pay it. A good example is looking at Apple Computer products - way overpriced for the market considering their capabilities and limitations, but they will always have their fanboyz and worshippers, while the majority of people ignore them.
I think that the upsetting part is the fact that his solution is *BOTH* - raising prices and cutting hours. It doesn`t make a lot of sense... if he is going to cut hours to below 30 for all front-line types of employees, then I don`t understand the raise of the price; after all, following a typical restaurant business model, the management/employee ratio is approximately 6%/93% with a +/- 1% (2011 standards); I can`t imagine he has so much management that it would cost all of those millions of dollars just for management.
Friday, November 16, 2012 8:23:25 AM
So... where to wade in and begin in this mess? I have a feeling it'll be a multi-parter...
First of all - this (and all analyses) at this point are bull$hit - impact of Obamacare at this point cannot be properly assessed because there are too many variables that require assumptions; those assumptions are always slated toward way high (and thus skews resulting projections) because Finance groups like to be on the "safe side" and not pi$$ off the boss if they are wrong on the low side. Further, we don`t know if the figures are PTP, EBIT, EBITDA or what - there are too many mitigating solutions used in Cash Flow Statements in Finance to state where these figures came from definitively without more information.
Beyond that, diving into the second issue here, I don`t think anyone is truly upset about him raising his prices to cover this amount. hell, it`s his company and he can raise his prices to anything he wants, for no reason whatsoever. [okay, see next part]