Make your employee cuts as deep as necessary, before all your employees are out of work.
Small business owners are all humans, we all care about our families, friends and yes our employees.
In many small businesses, the employees become family to the owners after years of working together side by side in the trenches of small business warfare.
When revenues decline, employers are hesitant to lay off or permanently reduce their workforce, preferring to hold on to excess labor or staff, pay them to work inefficiently or with minimal productivity, but the owner is concerned about their well being and care about their families, so they hold to them, waiting for the downturn to turnaround when everyone will be needed again.
The small business owner frequently kids himself into believing that he cannot do without this base core of people and that each one is necessary for the business to succeed.
There is much to be said about how to overcome these issues but the point here is that if you act irresponsibly to the business, carrying employees who are not needed but kept on because the owner cares, can result in a steady erosion of capital leading to the demise of the business…putting everyone out on the street without a job, including those who should have been released earlier.
A business must be predominantly run by its numbers. A too large employee base can quickly kill a small business. Holding onto employees because the owner cares about them and their families can result in the entire business being forced out of business causing far more damage to far more employees.
While I appreciate and acknowledge the sensitivity and caring demonstrated by an owner willing to carry employees because he cares and not because they are needed, it is a foolish decision that only wastes capital and destroys businesses.
Be the bastard your laid off employees will call you. Save the remainder of your employees from destruction, save the few that are critical to your survival. It is the only responsible act you can indulge in, if you truly care about your remaining employees.
Watch your numbers and fire as many as are necessary to balance your books, as soon as you are clear it is not a momentary dip, and survive.
We are in a deep long term downturn, downsize as soon as possible, and make your employee cuts accurately, as deeply as required, including and especially excess and thus unnecessary employees.
