will be so accommodating, and you sus-
pect your best employees will walk. They
probably will, so you’ll probably lose the
business anyway, regardless of a pay cut.
Here are some other ideas.
This seems worse than cutting salaries,
but strategic layoffs can actually be bet-
ter. You’re afraid the whole business will
close, which means 10 unemployed peo-
ple. So, do nothing and 10 people may
eventually lose their jobs, but take action
to reduce your company’s headcount,
and just one or two people do instead.
This employee (or employees) would
be eligible for unemployment, and you
should offer severance in exchange for
a general release, which makes it sound
like it’s not much of a cost savings. And
if it’s the person in the stockroom mak-
ing $15 an hour, it’s not. But if it’s a se-
nior person, the cost savings can be sig-
nificant — even with the severance. Of
course, the exact person or persons you
let go will depend on business needs.
Look at your numbers.
MAKE YOUR EMPLOYEES
Most small businesses don’t make the
owners fabulously wealthy, but some
do. This takes a tremendous amount
of work. So, consider giving everyone a
piece of the pie.
This isn’t an absurd notion — lots of
businesses offer stock options or grants in
order to make each employee invested in
the business’s success. In this case, you’ll
have to offer a bit more than 1/100,000th
of the business, but your employees might
be willing to work a bit harder for a bit less
money if they have the promise of a good
payout eventually. Of course, depending
on how your business is structured, this
might be easier said than done. Consult
with your attorney.
One of the problems with small busi-
nesses is that the owner (or in this case,
the partners) are sacrificing their whole
lives for the business’s success. You are
willing to do anything because it’s your
baby — if you succeed, you’ll reap the
profits. But to your employees, it’s sim-
ply a job. And they can go out and get a
GO WITHOUT PAY YOURSELVES
Last time you gave everyone a pay cut.
What if this time around you simply cut
the pay for the partners? A lot.
Remember, if this business succeeds,
you’ll profit. Are you willing to take no
salary or 50 percent of your salary until
things stabilize? If you’re not willing to
take this risk, you can see why your best
employees would jump ship after a 20
percent pay cut. If you don’t think that
you can realistically get income back
up within a year, it may be time to walk
away before you go into debt (or fur-
ther into debt). Sit down with an expert
who can look at your business plan and
your financials and help you make an
Even if you do these things, your
best employees may still leave, as they
know that the chance of continued suc-
cess isn’t great. Please wish them well.
They’ve helped you so far, and they
aren’t obligated to place their fortunes
with yours. n
Suzanne Lucas spent 10 years in corporate
human resources, where she hired, fired,
managed the numbers and double-
checked with the lawyers. On Twitter
@RealEvilHRLady. Send questions to
Has your business faced
April 2019 | comstocksmag.com