The NY Times column, You’re the Boss, discusses what to do when you find yourself overstaffed. Although author of the article is not a wealth planner, the issues he addresses applies to all businesses, including wealth planning businesses. His article begins as follows:
Even as I was having my conversation with the client who can’t pay us, I was doing the math in my head about what this client’s lack of payment for past work and lack of orders for future work would mean for our cash flow. And that led to concerns about the number of employees we have.
In this type of situation, you have to watch the financials closely, but at the same time, you already know something is going to have to be done. I realized that I have at least three people who suddenly don’t really have enough to do. Sure, they can help on other lines, and that offsets some of the financial bleeding, but lack of volume is still lack of volume.
Editor’s Note: If you have to lay people off, I recommend reading Chapter 4, of Ben Hortowitz’s excellent book, The Hard Thing About Hard Things, and in particular the subsection captioned “The Right Way to Lay People Off.”