[madpaddler]

Thought I would toss out an interesting topic for those out there that recently have been either laid off, or owners of small business that have to lay off. Here is my set up to my situation:

I own a small business that until recently employed 5 full time salaried employees to whom I paid 100% of their family health insurance. My plan was to lay off 3 and put the last guy on 1/2 time. The employee that was given a 1/2 pay cut posed a strategy that I found to be helpful and wanted to share. He asked me to lay him off 100%. He said he would come in and give me 20 hours which equates to 1/2 pay when taking the unemployment benefit into account. I can pay him additionally about $100 without it affecting his unemployment benefit so he gives me about 24 hours for this deal. This is being repeated for the other employees that lost their jobs as well. Since the big issue was that the business only had enough to keep us busy part time, this may work until things pick up.

In this way, this business may be able to hold on until "hopefully" things recover enough to bring them back full time. It also gives them an opportunity to find odd jobs to fill in the salary cuts they have endured. I did not ask them to do this, it was what I had hoped would or could happen. These are truly special people not willing to take $ without doing something...pretty cool.

I was interested in the input from the forum on this as a strategy to help local business and economy try to survive at least short term...yes, I know this is taking advantage of the the unemployment security commission, but small business' are not being helped I can assure you.

[Ludi]

Have you looked into small business grants? There may be more money available now since the porkulus was passed, but I doubt they will mail flyers to every small business owner - you probably have to do your own research to see if anything is available from your state.

Money for small business loans should be getting more available since all the porkulus. Check with your bank's small business loan dept.

I operate my biz in the black so I'm not looking for loans, which dismays my bank, apparently.

[Gerben]

It looks like a good arrangement, but there are some risks as well. I'm not sure how things work in the US, so I might be wrong.
If you hire him 4 hrs a week, then you fire him only 90%. So not sure if he still gets full unemployment benefits.
I don't think you can do much if he decides to change the deal and shows up only 4 hours a week. He might find another job and just leave you.
Doesn't he have to try to get a different job? Does he have to accept it if he gets a job offer?

[madpaddler]

Have you looked into small business grants? There may be more money available now since the porkulus was passed, but I doubt they will mail flyers to every small business owner - you probably have to do your own research to see if anything is available from your state.

Money for small business loans should be getting more available since all the porkulus. Check with your bank's small business loan dept.

I operate my biz in the black so I'm not looking for loans, which dismays my bank, apparently.

I am looking into SBA now as well as using a "factor" to get $ up front on shipment of goods...I am trying to run the business in the black as last year since it has been so hard to get line of credits, loans etc...

[AAA]

Thought I would toss out an interesting topic for those out there that recently have been either laid off, or owners of small business that have to lay off. Here is my set up to my situation:

I own a small business that until recently employed 5 full time salaried employees to whom I paid 100% of their family health insurance. My plan was to lay off 3 and put the last guy on 1/2 time. The employee that was given a 1/2 pay cut posed a strategy that I found to be helpful and wanted to share. He asked me to lay him off 100%. He said he would come in and give me 20 hours which equates to 1/2 pay when taking the unemployment benefit into account. I can pay him additionally about $100 without it affecting his unemployment benefit so he gives me about 24 hours for this deal. This is being repeated for the other employees that lost their jobs as well. Since the big issue was that the business only had enough to keep us busy part time, this may work until things pick up.

In this way, this business may be able to hold on until "hopefully" things recover enough to bring them back full time. It also gives them an opportunity to find odd jobs to fill in the salary cuts they have endured. I did not ask them to do this, it was what I had hoped would or could happen. These are truly special people not willing to take $ without doing something...pretty cool.

I was interested in the input from the forum on this as a strategy to help local business and economy try to survive at least short term...yes, I know this is taking advantage of the the unemployment security commission, but small business' are not being helped I can assure you.

I definitely want your business to do well and I wish the best for the people who are being laid off.

However I don't like the idea of the guy milking the system while still working part-time instead of searching for full-time employment.

[madpaddler]

It looks like a good arrangement, but there are some risks as well. I'm not sure how things work in the US, so I might be wrong.
If you hire him 4 hrs a week, then you fire him only 90%. So not sure if he still gets full unemployment benefits.
I don't think you can do much if he decides to change the deal and shows up only 4 hours a week. He might find another job and just leave you.
Doesn't he have to try to get a different job? Does he have to accept it if he gets a job offer?

The guys are laid off 100%...unemployment pays 1/2 of what they were making, which equates to working 20 hours per week. I can bring them back in when I need them and pay them about $100 before it starts to reduce there unemployment benefit. That $100 represents to them about 4 hours of work above the 20 hours of unemployment benefit...I have applied for an "employee attachment" which allows him to not have to find another job while he still has an opportunity to work in my business. So far it has allowed me to keep the doors open and yes there is a risk if he find new employment however unlikely at the moment.

[madpaddler]

I definitely want your business to do well and I wish the best for the people who are being laid off.

However I don't like the idea of the guy milking the system while still working part-time instead of searching for full-time employment.[/quote]

Thanks for the well wishing...the job hunting here is not very good, and he still is looking for another job. The cool thing here is employees are willing to come in and work when they could be sitting on their ass, looking for a job. I personally think this kind of mentality is lacking in many (most) people and in some little way gives me hope and belief in people. You can sort of look at this as a home grown stimulus package.

[Ludi]

.I am trying to run the business in the black as last year since it has been so hard to get line of credits, loans etc...

It is much easier when you have no employees, then you can just pull in your belt a bit. Can't very well expect employees to tighten their belts while still working for you.

[AAA]

I am looking into SBA now as well as using a "factor" to get $ up front on shipment of goods...I am trying to run the business in the black as last year since it has been so hard to get line of credits, loans etc...

Have you thought about bringing in a few investors to help provide capital and then share some of the profits with them? Not Wall Street guys but other local business people who have been successful.

The company my dad works for is a small oil company. The owners allow employees to invest in the company and actually become small working interest partners.

[Rabbit]

Do you know that as the employer, you will soon be paying the costs of the unemployment as soon as your company fund is depleted?

There is no free lunch.

[madpaddler]

Do you know that as the employer, you will soon be paying the costs of the unemployment as soon as your company fund is depleted?

There is no free lunch.

That is a very condescending remark...no free lunch? Let me tell you, my business is related to producing decorative panels for use in new construction and renovations in commercial applications. The free F**king lunch you describe was and still is being given to the same F*&*ks that caused this mess to happen to begin with. Now my entire business and all the years I have put into it is suffering directly because of it. It is not my inability to get investor help, it is the problem that my clients cannot finish their projects because their LOC's have been stopped and they cannot continue to buy my products.

No free lunch huh...if you would read what I wrote you would see I am not trying to get something for free AH, my employees are trying to help keep the business going hopefully so they have a job to come back to...and also if you actually read, my employees are looking for jobs and doing all they can to survive. End of rant for now wanker

[Rabbit]

Hey I feel your pain, I lost my full time 80K a year job on Jan 9th.

[Ludi]

Hey I feel your pain, I lost my full time 80K a year job on Jan 9th.

Then you should probably have lots of savings, and no debt.

[AlexdeLarge]

You should do what is best for you and your business. Small business loans are still debt. In this environment, thats the last thing you need unless you are "absolutely positive" it will generate income sufficient to pay off the note.

No business person wants to layoff personel. But business is business, and I can guarantee you that your employee's will not lose any sleep if you go up to your eyeballs in debt, and then go bankrupt.

Stay liquid, cut costs where you have to................

[Rabbit]

Hey I feel your pain, I lost my full time 80K a year job on Jan 9th.

Then you should probably have lots of savings, and no debt.

Yes, the only debt we have in the house. We were on track to pay it off in just a few years, now that will take a bit longer.