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I Fired My Son

Actually I didn't fire him, I just used that headline to get your attention. But I did have to give him the pink slip. Here's the whole story.

In 1991, I started my own business, a travel agency. I remember telling people that I knew I would be successful because I had learned a little what to do and mostly not what to do while I worked for my former employer. Guess I got on-the-job-training for the future.

The 90's turned out to be a time of unusual growth in the American economy. My travel agency enjoyed a double digit growth every consecutive year, I had no idea it was this easy to grow a business. However, by 1995, a few cracks began to show in the wall of my prosperity.

Delta Airlines announced they were now capping the standard commission of 10% on published fares to $50. This meant if you sold a ticket for $300, you would receive a 10% commission on $276.00. At that time non-commissionable taxes were about 8% so that had to be subtracted from the total price of the ticket before commission would be paid.

So a $1,000 ticket, which once paid a commission of $92 was now only paying $50! Almost a 50% reduction! All the other airlines quickly followed like obedient little sheep. I don't remember how long afterwards, but the cap fell to $35, then $25. It was murder to most agency's bottom line. (Today, 2010, they pay no commission!)

Fortunately for me, our niche was selling international airline tickets to humanitarian and missionary types. These tickets could be purchased by us from wholesale contracts and resold to our clients. There were no caps on commission because we were free to set our own profit margin. So even though domestic ticket sales were beginning to fall because of increased use of the internet, my agency continued to grow and prosper.

My son relocated to where I reside in 1999 and I hired him to work for me as my system administrator/online sales support and fix-any-techno-gadget. He was my sixth employee, all the rest being sales agents.

Everything was going along pretty smoothly until the morning of September 11th, 2001. You might recall later that day, the FAA closed down all air traffic in the United States, which lasted for about seven days, as I remember. Fear swept the country, if not the world, about another potential terrorist attack using commercial jetliners. Air traffic worldwide slowed to a crawl, airlines were forced to cut the fat, too. Employee layoffs and slashing of routes were the order of the day.

To make my story short, our office didn't sell an airline ticket for three months. Two weeks after 9/11, I held an office staff meeting and informed them in order to stay alive, we would need to take some drastic, cost-cutting measures and I wanted their input. Each of my employees were sympathetic and offered good ideas. Later that day, I took my first action: we rescheduled everyone's hours to part time, that way no one was laid off. I also informed them I was cutting my salary first and it would be the last one to be reinstated, if it came to that.

Another couple weeks passed and still no ticket sales, heck, our phones weren't even ringing, except for those who were canceling their travel plans they'd made prior to 9/11. I had to take more drastic action, and I didn't like the few options I had left.

With six employees, no sales for a month and my cash reserve free falling, I knew some people were going to be laid off. The agonizing question was, who?

I've always taken pride in the fact that I build relationships with my employees. It goes back to the days when I worked for a company I hated. The pay was good but management treated us like crap and took advantage of every situation they could to stick it to us. I told myself a thousand times, "if I ever own my own company, I'm going to treat my employees like I want to be treated."

I decided to let two girls go. The first one was the newest employee and she hadn't really come up to speed yet. She was a logical choice. The second girl that was getting the pink slip had worked for me for about a year and was a good agent. Her sales had been good and she was well liked by the clients she handled. I brought them into my office and informed them of the bad news. They both cried but understood my predicament. That left my son on the bottom of the seniority list.

Another few weeks passed and there was no end in sight. The travel trade magazines were reporting mass closings of American travel agencies with small agencies taking the biggest hit. A small agency was considered an office with less than 8 or 10 employees. Great, I had had six, now I have four and it's still too many.

One evening, I called my son to discuss the dim future of the travel industry. The longer we talked, I realized he was the least valuable employee in the office. He knew it, too. I finally said, "son, I've got to let you go. I have no choice."

He was shocked but took it well. That left three employees and here's how it spun out. Those remaining, including myself took another reduction in salary. Not long after that, the third girl asked if she could leave to help her husband's business as the bookkeeper. She said she would be happy to work part-time, even it was only a few hours a week, just to help out. The second girl, my office manager, eventually resigned to spend time with her new grandbaby. That left myself and my last employee, who stuck it out through the worst of times.

The next twenty months were tough times for me. My dad offered to loan the company some capital to keep it afloat. I accepted humbly and in retrospect, if he hadn't done that, I know my agency would not have survived.

By 2004, the office was back on firm ground and in the black, but only with one and a half employees. At the end of that year, I took an indefinite leave of absence, appointing the only full time agent left as manager.

Not knowing exactly want I wanted to do, I took six months off to relax and develop my online income (thats another story). In September 2005, I started a disaster response company and ventured to New Orleans after hurricane Katrina. That company morphed into a local arboriculture service where we live, which my son was involved with.

With the crash of the economy in 2008, my aboriculture business slowed way down. People weren't willing to spend money on pruning their trees unless its absolutely necessary. In 2009, I partnered with a friend of mine who has a roofing company with a unique selling proposition. I'm leading his organization in sales and enjoying every minute of it. We're doing alright.

Here's what I've learned going through crisis experiences:

1. Events that affect your business negatively happen that are beyond your control. So don't take it personal.

2. Be prepared for economic downturns. It's not always a bull market. Cut the fat away on a regular basis. Keep some cash stashed away.

3. Don't make rash, emotional decisions. Weigh out the facts and make logical, orderly decisions. That helps to keep the hysteria in check.

4. Have a war plan. That's a plan of action in case it all goes south. (I didn't have one then, I do now.)

5. There's light at the end of the tunnel, so keep moving toward it. It won't be a bear market forever.

6. Don't be afraid to let a family member go. Do it with respect and gently. Any other employees you have will have greater respect for you.