Dear Matt: I work for a local franchise that’s had nothing but success in recent years. The owner always tells me, “I don’t know what I’d do without you” — but I haven’t received a raise in five years. What gives?

Matt says: This situation is more likely related to the realities facing today’s small business owners, whether a franchise or small, independent business. Just a few years ago many small businesses hit rock bottom, struggling to stay open. “Small business owners from almost every industry are still recouping from the recession and what may look to some employees like ‘nothing but success in recent years’ may not be as rosy a picture as it appears to be,” says Mike Welch, President of FranNet Minnesota (franchisingminnesota.com), a franchise consulting firm.

Some entrepreneurs leveraged their homes, retirement funds and other assets to keep their businesses afloat. Many owners didn’t take paychecks for months at a time, living on savings or taking out loans to cover payroll so that their employees could be paid on time.

“These would be things that the manager might never see,” says Welch. “It might be that gratitude and a great environment is all the owner can provide right now in terms of incentive.”

That’s why the manager needs to suggest a formal review with the business owner to determine the long-term financial potential of the job, says Bill Mills, President of The Executive Group (mnexecutivegroup.com), a Minnesota based CEO Peer Group. He recommends saying something like: “I have something I’d like to talk about. I feel awkward bringing it up and you may feel awkward discussing it, but I’m bringing it up because I love my job and I want us both to always have an open line of communication. In the last five years, despite my successes, I’ve never received a raise. The impact of that is that my finances are getting more difficult each year. Sometimes I feel like I’ll never get ahead. I need to know what I need to do to justify a raise.”

Be realistic — even though you love the job, it may never pay a wage that meets your future needs. So ask more questions: What is the owner’s long-term vision? Do they want to expand? Do they want the business to run without their daily efforts? Discuss a win-win vision of the future, says Mills. Justify an increase in pay in exchange for the opportunity to prove how you can help the owner/business succeed long term.

“Entrepreneurs want to keep good people and if this manager provides the value to the business that they believe they do, then a straightforward, honest conversation with the owner needs to take place,” says Welch. “If that doesn’t get them where they need to be, then it might be time to hit the job market.”

 

Contact Matt at jobslink@startribune.com.