As a business owner there are only three options to deal with increased expenses, whether they are forced on you or not.
1. Increase prices: A dubious strategy vis-a-vis the competition
2. Lower other expenses: the biggest expense for most small businesses is labor
3: Take it out of the owner's pocket: difficult to do if said owner is not making any money.
Cuts in service, substituting automation for human labor, reducing hours, reducing benefits...these are the things you will see most in reponse to increased labor costs.