To survive as a business owner in this difficult economic climate, you are likely to be faced with some hard choices.
1. Cutting your workforce
It’s never an easy thing to do, but there are times when laying off employees is unavoidable. With most businesses, an economic slowdown leads to a reduced workload, and fewer resources to support the current workforce.
If you decide to go this route, visit the Department of Labor website in your state, to ensure that you comply with all state employment laws and regulations.
2. Reducing employer provided insurance
Assuming that you provide employer-paid benefits, a more palatable solution to reducing employee-related expenses is to reduce the benefits provided to your full-time workers. Some options:
a. Eliminate less critical insurance (such as dental and vision coverage);
b. Slash health insurance costs by 30% or more by adopting higher deductibles and/or co-pays
Seek advice from your insurance agent to discuss the alternatives.
3. Decreasing advertising costs
Although advertisers will warn you that this is the worst possible time to cut back on your advertising budget, you have to consider the source of that advice.
While in your particular business sector, keeping your advertising dollars at work makes the most sense, you alone are in the best position to make that determination.
4. Increasing or decreasing business hours
If you run a service business out of your home, lengthening your business day may be an easy way to catch those few extra clients that call after normal hours.
On the other hand, if yours is a store-front retail business, the required expense of having at least one employee on the premises, may make longer hours an illogical choice (unless there is sufficient demand by shoppers during those hours). Instead, closing early and opening late (assuming these hours are slower than average) will improve your bottom line.
The point here is to maximize your return on investment. You will have to do the math to see which option makes the most sense for your business.
This too shall pass
Hard economic times force us all to make unpleasant choices. Be sure to carefully consider all options before making any decisions. The most important objective should be the survival of your business until the current economic storm passes.