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How to survive tough economic times without laying off employees.

As a business owner or manager, while the last 18 months you have been faced with shrinking behalf margins and fewer customers lining up to buy your once opinion to be "hot products or services." The query of how to survive these seemingly tough times usually results in answers such as..."we have to lay off more workers" or, "...let's close the office located in Suburbia".

The problem with this coming is that...when the cheaper rebounds, you will be finding to re-hire those very habitancy you laid off in the first place. Unfortunately, you may eye that they have moved on to other jobs, gone back to school, or start their own businesses. You have then put yourself in a situation where you have to now hire and train a new worker or hire a more experienced worker who can "hit the ground running".

Laying off employees while economic downturns should be a "last resort". Well, at least not until you have explored all other avenues, namely trying the strategies I have outlined below. I will even go one step further. If you have already implemented some (if not all) of these strategies, or have made them an integral part of your company's operating culture, chances are you have not cancelled your long-planned vacation to the Bahamas.

Additionally, although these key strategies can be adopted by businesses regardless of size, they are primarily geared towards Small Businesses. The definition of a small business will obviously vary by industry and, more importantly, it may depend on the business owner's personal assessment. Regardless, you can find out the classification of your business as defined by the Small business association (Sba) by going to http://www.sba.gov

Survival Strategies

1. Schedule Weekly allocation Meetings. The assumption is that you have a budget. You may be surprised at how many small businesses whether (a) don't spend the time to make a permissible allocation or, (b) don't have a quarterly allocation report process. Use the meeting to challenge managers and supervisors to find ways to sell out expenses in their respective departments (and bonus them). Have the managers call in via discussion calls if you have satellite offices in various parts of the country or globally. Make sure they are ready with arguments to expound the budgets of their various departments and plans on how to cut costs.

2. Set up a behalf Committee/Task Force. This should be employee-driven. Challenge them to contribute ideas but, more importantly, bonus them for good ideas that unquestionably get implemented.

3. Revamp your performance reviews. Are the employees (especially Senior Managers) objectives aligned with business goals (i.e. Increase sales, sell out expenses, heighten customer service)? Are the goals more than naturally rhetoric or "feel good" words? naturally put, are the objectives exact enough and...can you unquestionably "Measure" the progress?

4. Review your "Turnover" ratios. Profits are quickly eaten up by idle catalogue a late-paying customers. Incorporate these items as a part of your allocation report process. Work intimately with your vendors to sell out case packs, or get naturally get rid of items that don't sell! Offer to decree with your late-paying customers or dispose for installment payments on excellent receivables. Getting something is best than nothing in tough economic times.

5. Rely on the leverage you have with your vendors. Partnerships should be more than just "talk". Negotiate best terms, i.e. Try to Increase "days to pay" for your invoices. Even taking an extra 5 days per month on a base of business valued at million annually can earn your business extra interest of over ,000, after taxes. That's real money!

6. Change your Payroll Cycle. If you are on a weekly payroll cycle, reconsider captivating to bi-weekly. If you are paying bi-weekly, reconsider captivating to semi-monthly (15th and 30th). Perform a cost-benefit pathology to make sure this makes sense for your business. You can sell out payroll processing costs which can be vital especially if you have a fairly large worker base.

7. Get on the "green" bandwagon early. Come to be more vigor efficient. Who knows...you may even qualify for tax breaks. Get employees in the habit of turning off lights when they leave discussion rooms. Installing sensors for rooms or areas used infrequently may be something to think about. Turn off computers and unplug office equipment at the end of each day. Agreeing to the government's vigor Star program, 40% of the electricity that home electronics use is consumed while the products are turned off. I would fantasize this applies to office equipment as well.

8. Meet with your banker. Set up a meeting right away. Not only will you be construction a vital association (one that too many managers neglect), but ask them for ideas. They have the advantage of finding what works (or doesn't) for other businesses so feel free to pick their brain. Best of all...it's free advice! Discuss things like...putting extra cash in Money store accounts, Cd's etc. See if you can move your operating catalogue to an interest bearing checking account. While the interest earned may not be "earth shattering", it is still money earned without doing anyone different. If there is a limit on the whole of checks that can be written in such an account, analyze the fees that the bank may payment vs. The interest that can be earned. Pay bills electronically and offer direct deposit for your employees to sell out any check writing fees. Also, are you carrying too high balance of a balance in your checking account? Work with your accountant and take a look at your cash flow to see if some of that idle money can be earning interest elsewhere.

9. Trim your travel allocation (if you still have one). Telephone and/or Video discussion will save you tons of cash. Also, are the seminars and conferences you attend every year unquestionably paying off? Maybe attending 2 instead of 4 will reap the same benefits.

10. Renegotiate contracts. Bring in assistance providers (telephone, software, etc,) and consultants to discuss current contracts and sell out fees. Take a look at your leases (office equipment, rent, etc.). Also, are you taking full advantage of any "hidden deals" and/or discounts? Have you been paying attentiveness to the invoices in an attempt to avoid "overcharges"? Take advantage of the economic downturn. No one wants to lose a customer at this point. Where appropriate, bring other providers in to bid for your business. Caution: don't hire them naturally because they are cheap!

11. Tax strategies. If you invest a lot in equipment and are incurring high business equipment taxes eye states with business-friendly tax codes. There are benefits to setting up an "equipment holding" business in a low tax state. business losses and write-offs may also succeed in your business qualifying for various tax breaks and deductions. Talk to a good tax attorney about how to maximize these and other tax deductions for your business.

12. Budget for "reserves". In other words, have a "contingency" or "miscellaneous" catalogue as a line item in your budget. A good beginning point would be to set aside 5% - 10% of all your total expenses for unforeseen circumstances. Keep in mind, if we could predict the future, we would all be millionaires. Incorporating the "reserve" catalogue as an "expense" item is naturally good business policy.

13. Look at your condition insurance benefits. If you haven't spoken to your insurance Rep in a while, now would be a good time. You should be reviewing your policy every six months anyway. A itsybitsy convert in your workforce level can have a vital impact on the employer (and employee) is your covenant advent up for renewal? Can you break the covenant without incurring any fees? You may be able to find a good deal out there without sacrificing coverage.

14. Conduct each year invoice audits. Look intimately at the invoices received from your vendors. If you don't have a good principles for monitoring the invoices before they are paid, you may be surprised at the whole of double or erroneous payments that can occur. An extra "0" added to a ,000 invoice results in a ,000 payment and a ,000 mistake. Incentivize your employees when they eye these errors. For example, if they recover monies, split it with them. It's a "win-win" deal!

15. Go after abandoned customers. If a competitor done its doors, that should spell "O P P O R T U N I T Y". The customer may be cutting back, but when things get best or they find a new job, they will be back. You will want to make sure you are well positioned to fill the gap left by your competitor.

16. Explore new sales markets. As strange as it may seem, an economic downturn is the exquisite time to look for opportunities in new markets. Territories once shunned (especially overseas) now deserve a second or third look. Again, get ideas from your employees.

17. Stay complex in your community. Don't cut back on your sponsorship of society events and charitable donations. The money spent on the uniforms for the itsybitsy League Baseball team is "big deal". habitancy remember this stuff. Those habitancy are possible customers or good referral sources. Actually, its worth much more than the tons of money you spent for the sign at your local Major League Baseball stadium. You know...the one that nobody notices!

18. Do you twitter? Do you have a presence on the group networking sites? Yes, I do mean Facebook, Twitter, MySpace, etc. Are your employees set up on LinkedIn? Even if you are a "Mom and Pop" type businesses, reconsider paying one of your tech savvy employees 15 or 20 cents extra a week to post updates and monitor these sites for you if you do not have the "know how."

19. Part-time and Independent Contractors. Before you reconsider laying off, eye the possibility of reducing hours or changing the status of an worker to "Independent Contractor". The employees will still appreciate having an income and, at the same time, you will save money on payroll taxes and/or condition insurance contributions you were obligated to.

20. Finally...be honest with employees. Don't tell them today things are great, and then tomorrow start laying off. On the other hand, if things are unquestionably tough, let them know. If you build an honest association and take the time to let you know how much you appreciate their effort, they will "go to bat" for you while the tough times. If you do have to resort to laying them off, they will understand even if it hurts. Chances are, if you have implemented the other 19 strategies mentioned her and made them an integral part of your company's culture, your employees will be the ones recovery your business from going under in an economic downturn.