How the Recession Saved One Company

Benjamin Sayers had just doubled his staff to more than 70 at VoIP (Voice over Internet Protocol) Supply LLC in 2008, when he found out sales dropped by $1 million in one month. Since founding the company, he'd watched sales grow tenfold in four years. However when the recession hit, he on the spur of the moment had the rug pulled from pursuant to this agreement him and double the staff to pay.

The economic crisis hit

Before the economic crisis hit, Sayers had hired 36 new people in six months in a rush to grow the Buffalo, N.Y.-based business, which sells equipment for Internet phone service to small and medium companies looking to replace traditional phone systems. Desperate to get his payroll down afterwards the blow to sales, he gave himself two days to cut the number of employees in half. "We didn't wait at all," he says. "The general consensus was, 'Let's just assume it's going to get worse and not better.'"

The Turnaround The tight economy meant Sayers, a college drop-out who says he's learned everything he knows about small business from experience, had to keep his expansion tendencies in check, resisting the urge to write prototypes for new applications like he'd been doing in the past. For instance, when the recession hit, he put a prototype for a telephone-sales training program in which he'd invested $150,000 on hold. Instead, Sayers began looking at how to streamline operations. "Collectively as a company we went back to where we were in 2006 just selling voice-over IP hardware," he says. "We retracted to what made us successful in the first place."

Sayers as well worked to improve efficiency and make sale transactions faster. For instance, in May, VoIP began using an in-house sales software platform that cut the time it takes to place an order from 20 minutes to five minutes. Last year VoIP cut its debt in half and bought a new building, saving the company about $70,000 a year over its previous lease. During annual revenue in 2009 fell to $17.8 million with a net income of just over $12,000, last year annual revenue rose to $18 million, with a positive net income of $110,000. In May, VoIP is expected to have earned $2 million in monthly sales for the first time since early 2008.

"In hindsight, the forced retraction of the business was a huge win for the company," he says "It was unfortunate for the people we had to lay off, however as far as the future stability of the business, it was a blessing in disguise."