Be an Ethical Entrepreneur, Marketer, and Business Builder

How to fire someone… The right way…

As I mentioned in my last blog (yes, I know it’s been a long time but with restructuring our team I’ve been busy), after reviewing how I doubled profits in a year, I was going to review all that I did wrong. Actually, that would require a book not a blog so let’s start with the biggest problem.

My biggest mistake in my first year of business ownership was my avoidance with letting people go.  There were 2 reasons for that:

  1. The worst thing you have to do as a business owner is to let someone go. It’s not fun and if you have any heart it’s actually very emotional. Beyond that, while you’re training his or her replacement guess who gets to pick up the slack? That’s right, the owner or leader in charge of that position.
  2. I prefer to believe people are better than they actually are. I tend to believe I can educate, train, and help someone learn “anything”. After all, if it’s easy for me then how hard could it possibly be to teach someone else?  Unfortunately that’s just not how the real world works. People with the greatest intentions just may not have the talent or intellectual capacity to do what’s needed. For a great reference on that topic, read First, Break All the Rules: What the World’s Greatest Managers Do Differently by Marcus Buckingham

Ironically, in the six stages of business that Brad Sugars teaches, building your team is the fourth step. In the next year, as I build my team so to replace me, I’ll let you know how that works. At this point it seems it would have been a lot easier to get the right people in the right places first… We’ll just have to see.

So I’m much more cognizant of my weakness at letting people go who need to be let go and in the process have learned the “proper” method to do so.

If you fire someone correctly, a few things will occur:

  1. You’ll maintain a positive relationship. In my experience several people asked for their jobs back a few months after I let them go so obviously they didn’t completely hate me. 🙂
  2. He won’t file for unemployment. It affects your unemployment insurance rates for years to come so it’s worth fighting and preventing.

Firing someone is actually MUCH easier if you plan and prepare properly. Here’s what I suggest:

  1. Make up your mind! If you’re not 100% sure that it’s the proper thing to do, then you probably shouldn’t do it. You don’t want to get in an emotional situation where they talk you out of it. Make up your mind and stick to it.
  2. Gather performance information. Particularly related to poor performance. The reason for this is because if you “fire” someone with reason, they aren’t eligible for unemployment in many states (I’m not a lawyer so consult one if you’re unsure). Otherwise it may be considered laying them off in which case they can claim unemployment. The second reason for this is that when you sit down with them, if they feel indignant and question everything, you have all of your notes and information in front of you to stick to your guns.
  3. Don’t use the negative performance information more than you need to. In other words, you’re already ruining their day, no need to rub it in. Most people know they’re underperforming. At least 3 people I let go didn’t offer any resistance whatsoever and because it was obvious by their performance that they knew it was coming.
  4. Don’t ever use the words “fire” or “quit”. Those are harsh words. Instead use the terms “let you go” or “resign.” Review my blog on NLP if you don’t feel proper word choice is important.
  5. Offer them a choice. If they just aren’t capable of doing the job you need them to, but they otherwise work hard, show up on time, etc. and you feel comfortable doing so, offer to let them choose to resign or you’ll have to let them go. Emphasize that it’s tough to get a job if they can’t use you as a reference. Moreover you can’t lie, so if someone calls to ask why they no longer work for you, you’ll be obligated to tell them they were let go and why. All 4 people I offered this option to decided to resign. Consult a lawyer on this point as this may not be accepted as a legal resignation.
  6. Get any business items immediately. Whether its keys, tools, company credit cards, cell phones etc. Get them all immediately. It may be against the law in your state to hold someone’s paycheck, but if your handbook says so, you can charge them back for any equipment they don’t turn in before their paycheck is ready.
  7. Offer to let them put in their 2 weeks notice. If you don’t have a gross negligence issue and you can completely trust that the individual won’t sabotage you and your business for their final 2 weeks, offer to let them work their last 2 weeks while they search for a new job. Make it clear that you don’t want to regret that decision and that you’d be willing to be flexible on their schedule if they have interviews. As an Ethical Business Builder, in instances where the person just can’t keep up with their work I prefer making this option available. In my business I only made it available to my office personnel and never to service personnel who have my trucks fully stocked with tools and parts to slowly sell off or steal with little oversight in their last 2 weeks.

That’s it. So far I’ve had to let 4 people go and haven’t had a single one apply for unemployment. Two have asked for their jobs back and I hired a another’s father to work with me with no hard feelings (and he’s a GREAT addition to our team).

Properly preparing for this horrible part of being a business owner actually does make it easier and a lot more palatable. It’s eventually going to happen, so don’t put off letting someone go when you know it’ll will be better for your business, customers, other team members, and ultimately the individual.

To your team re-building success, Bryan

About Bryan Trilli

Entrepreneurial Junky is probably the best way to describe me. I've bought, run and sold 3 businesses in 3 different states and started a 4th. The first 3 were brick-and-mortar service-based businesses and the 4th does internet marketing for service businesses. My team at Optimized Marketing guarantees to double your business' internet contacts in just 90 Days.


  1. In the state of New Mexico, by giving someone the option to resign or be let go, they still have the right to file for unemployment since the state interprets that choice as no choice.
    In the state of Texas I’ve found out that supposedly there’s NO way for an employee to forfeit their right to collect unemployment. Remind me again when unemployment became a right…
    At any rate, I still offer the choice simply because most people are honest enough to not file for unemployment if they choose to resign even if they technically can.

  2. Hmm.. quite concerned about this piece of advice:

    “…if someone calls to ask why they no longer work for you, you’ll be obligated to tell them they were let go and why.”

    Legal recommendations here (Canada) are quite clear. If you tell someone about an ex-employee’s bad performance, you could be sued for slander. Its safer to just state facts like length of employment, last day of work, position, title, responsibilities, etc.

  3. Hi Mayur, Thanks for the input! I’m not a lawyer and so don’t pretend to offer legal advice particularly since the laws change drastically between countries (I’m in the US) and even between states. You should always check with a lawyer and/or your state or province’s unemployment office to determine the best guidelines. There are probably a few states in the US that have the same laws as you describe in Canada.

    My experience in Canada with clients has been that it’s VERY hard to let a bad employee go and apparently, from what you say, there’s little point in calling references for a new hire. One thought about areas where you can only state facts about previous employees is that if I’m hiring someone, call a reference, and the reference simply gives me facts and no positive details then I’m probably going to think twice before hiring him.

    In Canada, does each business pay unemployment insurance based on the number of ex-employees who have claimed and won unemployment claims? Can employers even fight unemployment claims?

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