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This is part of a series of stories called “How to survive in California as a business owner,” offering tips on how to be successful in the face of the Golden State’s challenging business climate.

California can be a challenging market for retailers. With regulations and cost-of-living, operating in the Golden State can be expensive for buyers and sellers. But those who succeed have access to the largest marketplace in the nation, and one of its most diverse.

Labor

California’s labor market has been shrinking since 2013. With more people working, that increased expendable income has put even more pressure on retailers to hire to meet the growing demand. Coupled with the minimum wage increasing every year until it hits $15 an hour, hiring has become increasingly competitive.

The higher minimum wage has made it more difficult for employers to reward employees, said Ali Nekumanesh, vice president of Deli Delicious franchising and owner of Colorado Grill.

“If he wants to pay a higher wage to an individual that has been with him for a while that is really productive, it inhibits him because he has to pay higher wages to those who come in and work two hours a day a couple days a week to put gas in the car,” he said.

Service makes a business stand out, especially in the restaurant industry, Nekumanesh said. But for that sought-after, people-oriented applicant, they may have two or three job offers. In order to stand out,

business owners have to think beyond the salary figure.

Treating a worker right means respecting them. It can be as simple as not being rude, or understanding why a mistake was made.

“You make the right decisions with people and they’re going to be happy regardless, because they know they’re not going to be walking on eggshells,” Nekumanesh said.

Nekumanesh added that business owners should not only share proceeds, but also provide growth opportunities.

Recently, at Colorado Grill, two long-time employees were made joint-business owners. Justin Hansen started on grill 10 years ago at the Barstow and Willow avenues location before becoming night manager and eventually taking an ownership stake.

Marcello Orosco worked for 12 years before making the taking the same leap at the Shaw and West avenues location.

Culture is also a big deciding factor for potential employees.

In the car industry, finding and retaining qualified technicians means keeping customers coming back for excellent service. Tim Finegan, owner/president of Fresno Chrysler Dodge Jeep Ram, starts at places like Fresno City College, as well as trade schools, to find workers. Even if they have a certificate, getting an employee a specialty with a particular car manufacturer can cost $100,000 a year to a business owner. And there’s no guarantee they’ll stick around, he said.

“[Labor is] very tight. There’s a lot of poaching for specialized jobs,” Finegan said.

To make working at Fresno Chrysler more attractive, Finegan guarantees his employees eight hours a day. He also makes himself visible to his employees.

He’s hired technicians who have never seen the boss, he said. “You want to make them feel like they belong there.”

Regulation

Despite all the benefits of operating in the state, California can be a “very tough place to do business, despite its beauty,” Nekumanesh said.

“Most of the business regulations are not small business owner friendly,” he added.

Businesses have shut down because of litigation costs. Business owners need to familiarize themselves with each of the laws. Education can be costly.

“You know the rules and have to play by the rules, and that’s what you do,” Finegan said.

In the auto sales industry, California has its own laws regarding truth in advertising. In other states, car dealers may not have to outline — in no uncertain terms — exceptions to financing rates or rebates. California dealerships have to be up front.

Finegan subscribes to consultants who make sure that advertising is accurate and meets codes. “Everything’s checked and rechecked,” he said.

There are other services, such as outside human resources firms, to outline what employers have to do and what they can’t do in regards to managing employees.

“There’s so many people in our business that make a living off our business. It’s unbelievable,” Finegan said.

The Americans with Disabilities Act can be particularly complex for new business owners, even though sometimes they’re necessary, Nekumanesh said.

One example is in a restroom. A mirror has to meet certain guidelines about size and placement. Class-action lawsuits have been filed for misplaced mirrors. But what business owners don’t know is that it’s not required to even have mirrors in restrooms, Nekumanesh said.

“The reality in our society is many people who unfortunately don’t have the ability to finish up graduate school end opening a small business for themselves to try to make a living, and they get hit,” he said.

Hiring lawyers and consultants can be overly expensive. Free resources do exist, however, to help small business owners.

Nekumanesh is a member of SCORE, a mentoring resource for entrepreneurs. Operating out of the Small Business Administration offices, SCORE is comprised of long-standing members of the business community who can advise and provide guidance for other business owners. They offer classes and workshops on business management, law, accounting, business plans and more.

“What’s offered at SCORE is going to help the small business person to be a little more aware of the business environment,” Nekumanesh said.