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Member since 3/23/05
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Posted on: 12/7/13 9:43 AM ET
I was recently widowed and am faced with a dilemma concerning my business. It is currently losing money. My financial situation is untenable. I had hoped to try to build the business back but this may not be feasible. The lease expires on December 31. I'm set to talk to the landlord on December 12. If he raises the rent or opts not to renew, I will definitely have to close. The question is: how and when do I tell my employees? If I tell them now or any time before the store closes I can't really expect them to stay and work until the end. I need to keep the place open through December 31 because I need the income. I don't want to be the kind of person who does something like this to employees, especially at this time of year, but I don't know what the alternatives are. Has anyone out there been in this type of situation? Any advice as to who/when to inform the staff?
  
Member since 5/28/12
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Posted on: 12/7/13 9:50 AM ET
I think you need to treat your people as you would expect to be treated yourself.

A few things....

Maybe offer a bonus of some sort if they stick it out with you until the end. Only you know what it is worth for you to be open until 12/31 and how many employees you've got (you didn't mention a number)

Only you know your relationship with your employees... do they care about you? Would they want to stay on?

Only you know who really, really needs the income - so are they going to get upset and leave? Or are they probably going to need this time to find new jobs?

What kind of notice would you have expected out of them under normal circumstances? Two weeks? Then that would be appropriate to give them.

Personally, I'd consider offering glowing recommendations for them and a bonus of some sort if they stick with you until the end. It shows you have heart.
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Member since 12/28/07
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Posted on: 12/7/13 9:51 AM ET
In reply to shana707
I am sorry you are in this situation.. I know of many businesses that have closed.. and each one does it in their own way..
I will say that you might check the laws out in your State.. Your State Unemployment might be able to advise you.. Small business have less regulations regarding their closures than larger businesses who are required to handle closings in a certain way.. along a certain timeline.

Other than that. the most humane way is to tell them now.. discuss all your concersn.. It would be inhumane not to do anything else. Your employees might be able to find another job during this time that they could not in Jan.. but I doubt it. Most employers don't add staff at this time of year unless its seasonal. I bet most of your employees will want to stick it out with you till the end.. Perhaps you can work out times to let them go on any interviews etc..
Take the high road here.. and put your employees first..
Although you probably cannot afford it. many times business will give bonuses to those who stick around to the end.. Maybe you can find someway to do something along this line of thought.
Your employees themselves might want to discuss things to help you out.. you never know. Doing the right thing and telling them now might reap other rewards..
  
Member since 3/23/05
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Posted on: 12/7/13 10:39 AM ET
Thanks for your responses. I feel that the "right" thing would be to tell them and to give some sort of bonus. Unfortunately, there is absolutely no money. I don't know if they would leave. I don't know if they care about me. I tend to doubt it. Even if they do care, they need to protect themselves. If I shut the business down, all of the employees (there are 8--hairstylists) will collect unemployment. They will most likely have little trouble getting jobs. I, on the other hand, will be going bankrupt and losing my home and everything my husband and I built during our 46 years of marriage. I desperately need the December money. How do I decide who needs it more, me or the employees? I ask for two weeks notice when a stylist leaves. I rarely get it--maybe twice in 24 years.
I'm sorry to rant. I'm just having a hard time deciding between what I believe is right and what I'm afraid I have to do. Thanks for the forum.
  
Member since 12/28/07
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Posted on: 12/7/13 10:51 AM ET
In reply to shana707
Then its a simple solution.. and I bet Suze Orman would say this also. seems like she has in the past. .No bonuses.. I still doubt they will leave before Christmas season has passed by.. So you may get lucky there.
It will take them quite a while.. several weeks to collect unemployment.. but I doubt many will take that route.. most likely they will move onto another job in Jan.. Sorry to say in this case.. as long as you have given them two weeks notice and paid them any monies owed.. then you just can't do anything more..
Many of us get burdened down by having too much. or more than we can afford etc.. The recent economy has been a real wake up call.. try to think of this as a golden opportunity for a brand new start.. My heart is saddened for you.. so I hope you come back for more support should you need to.. I wish you well.
  
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Posted on: 12/7/13 11:10 AM ET
My dh has been going through this same situation.

First you must protect yourself. Make sure you know the employment laws that apply to your situation in your state. In our Province you have to give 2 weeks notice after 90 days of employment, plus an additional week for every year over a certain number of years. Or you have to pay out the notice.

DH gave the long notice to two long term employees, plus offered them a bonus to stay until the end of the notice. Additionally he actively looked for employment opportunities for them and wrote glowing references. The third who has been with the company for less than a year, got 3 weeks notice and a bonus too. He has since had to ask the last fellow to stay a couple weeks longer to complete the technical side of closing, which is has agreed to do.

You may be surprised, maybe one of more of your stylists would want to take over the location and buy the equipment from you.

Good luck it is a very difficult situation. In ours dh has helped each of his employees find a new job, but he has not found one himself. My hours of work have just been cut to the tune of $600.00 per month. I have no idea how we will manage.
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Posted on: 12/7/13 11:37 AM ET
In reply to shana707
I am approaching the 3rd anniversary of my DHs death. You have to think about yourself and your future.

Two weeks notice is appropriate and fair. Also, don't think your employees are completely oblivious to what the state of things might be. It is Dcember 7th. It does take a little time for people to find new positions. Why not wait until you meet with the landlord and have made that decision. Then tell them.

No bonuses. You can be upfront and tell them that you are not in a position to do more than make payroll.

As for losing your home, please find a bankruptcy attorney (a legit one and not the TV ad folks). You need to have solid advice so that the situation does not get worse. One of my bookkeeping clients is going thru bankruptcy and is not going to lose the home. You will find your life less stressful if you have factual information about what you are facing.

My heart goes out to you with everything you are facing.
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Member since 5/28/12
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Posted on: 12/7/13 12:41 PM ET
A salon, eh?

(I'm an esthetician... I "get" what you're going through.)

Have you talked to a mentor or peer about switching up what you're doing? If you do get to stay on in the space you're in, maybe you need to consider booth renting instead of them being employees.

I know things may be different in different locations... but it seems in my area, the cosmos and esthies that are booth renting and are independent tend to do better and stay in a place longer than just being employees. (and... my daughter in law in a manager in a franchise/chain salon - so I see what she has gone through for years with employees) Employees are "dependent" on you... which is exhausting for you, IMO.

I bet there is a financial solution to where you're at. And more than that, I bet there is a system that you could install into your business that would pay you well, and more than that, it would create incentives for your stylists to want to increase their business. Which, in turn, if done right, would increase product sales and such that you would make more money, too.

If they are employees and things aren't going so hot, they probably aren't really thrilled with what they're making, either. And if you don't know if they care about you, that also seems to me, to say that there is room for improvement that would be good for all of you. You should, IMO, try to turn it into one, big happy family (of sorts - you get what I'm sayin').

If you're going through heartache in your own realm (and boy, do I "get" that, too!!!) ... maybe there is a way to use the business as a therapeutic thing to create more happiness & money for all of you.

Methinks you need a good, heart-to-heart, meeting (maybe over a pot luck dinner) for you all to get to a place to move forward.

And.. if you don't already have a successful peer or mentor to bounce ideas off of (that would be positive- not someone who is also down on their business) ... you should get one, IMO. And fast.

I wish you the best... I think you've got untouched possibilities.


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www.sewlikearockstar.com
Share pics with me on Instagram: RipStitcher
More pics are in my facebook group: Sew Much Nicer Community
2019:Juki TL-2010Q, Babylock Triumph Serger
2018: Babylock Solaris
2016: Bernina 720, 570qe (the wonderful 5.5mm, CB hook model)
2015: Pfaff Passport, Babylock Sashiko, Babylock Ovation Serger
2014: Bernina 880 Sterling Edition, Bernina 550(sold in 2016)
2012: Janome 7700 (sold in 2014) Babylock Ellisimo Gold (sold in 2015)



Granddaughter: Bernina 560
  
Member since 12/3/06
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Posted on: 12/7/13 2:45 PM ET
Why not ask the landlord now about extending the lease at the current rate for at least two months.

That will get you through the holidays when solons should be the busiest and allow patrons to give their stylist a Christmas gift.
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Member since 5/2/09
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Posted on: 12/7/13 5:39 PM ET
In reply to shana707
My guess is they probably all, already know to some degree at at least, how things are going, as it would be really difficult and probably not even possible to work any place and not realize something like that. Especially if they did any book keeping for you or were involved with any money coming in or out, and had any idea of what your expenses were or could guess in anyway, what has been going on. So it might not really be such a horrible "surprise" to them as you might think it will be.

Sometimes things kept more secret or not talked about, foster more problems and bad company moral, than just talking about them, sometimes maybe not. And of course I think it's much better for just planning purposes for employees to have some heads up too.

Some other random thoughts: In most states if you have sate unemployment insurance, if you go under and they (employees) are unemployed because of that, and they then often will be able to collect unemployment and that will count against you too, as long as they stay until you close if that happens. If instead, they really just get mad and unhappy and suddenly or even with notice quit on you, they will not be able to do that. So that is one reason, for them not to do that to you, right there. I think once people get a clue, they are of course probably going to be looking for some back up situation, but that might be happening right now even.

That said after working at lots of kinds of business that had to close or go under eventually, or maybe sold to another organization sometimes. And sort of being the last to go, as having to have to sort of clean up a lot of things even. Of course any of them (employees) that do anything financial for you, probably have known about it for a long time.

If you feel tight with them and on good terms with them, and things are really bad, and it would make you feel better, and you want to be nice and able to prepare them, and even sometimes get the most support from some of them, I think it's probably time to have a big sit down meeting and just tell them what is going on. As they probably are not just clueless about it, at all.

The flip side of that though, is that lots of large corporations (where I think most of everyone knows about that kind of stuff too, most often ahead of time, as employees do talk to each other, and notice if you are on credit hold a lot, or a bunch of other things) actually don't like to tell people ahead of time, and for some good reasons sometimes. They are often afraid someone might get mad or upset and sabotage something, or just not bother to do a good a job anymore for the little time left that they are there sometimes. In that case, in a large corporation, they might only hand out pink slips on a Friday morning, and then ask people to clean out their desks and be gone by the end of the day, or even sooner, and even have security escort them out of the building at the end of the same day! I have been at some places like that too.

That has never, ever happened to me a a "surprise though" or like that at all, as it just really could not, if you deal with financials at all. I did work someplace once that was in some dire straights, and a whole marketing department of maybe 30 people was still plugging away, totally unaware of it, at about noon, when I as an accountant, and had just left the building to go out to get some lunch and run some errands. I was only gone for about an hour and half, and when I came back, they all were just gone! As in the department was now empty of all human beings!!! That was a big surprise to me, and them too. It would not have been a surprise to me, if I had been doing their payroll at all though, as of course all those last checks had to be prepared in advance That was done in that way, as them being the marketing department, I think it was just felt, they could just do too much damage, if some or all of them, got 2 weeks notices and really were going to be vindictive about it at all.

If you see impending disaster looming up ahead, and you actually talk to your employee's about it,ahead of time, and then for some reason, the disaster gets avoided, then I think you have actually created more trust, and a stronger team for it in the end.

But, yes I think it's a tough call.


-- Edited on 12/7/13 5:45 PM --
  
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