Back in 1999, the owners of Remodeling Designs in Dayton, Ohio, decided to purchase a handyman franchise. Their thinking was that the then-booming economy was bound to slow down, but that homeowners would always need odd jobs done. The handyman service, run separately from the company's design/build firm, would help Remodeling Designs through tough times.

But things didn't work out exactly as planned, and the owners began trimming their staff. With handyman jobs "coming to a screeching halt," in the words of co-owner Erich Eggers, the company was forced to make the difficult decision of closing the division early this year. That meant letting go of nearly half of the remaining 24 employees who worked in the two companies.

"From a business point of view, we had to make this decision," Eggers says. "We made the choice to eliminate one company and survive, rather than try to stick it out and have it cost us two companies."

But though it was a sound business decision, that didn't make it any easier emotionally. "My wife [one of the four co-owners] cried for a week," Eggers says. "It was the hardest thing I've had to do in my life."

However, they made the best of a bad situation. Rather than just cutting the entire handyman staff, the owners ranked all of the employees on a variety of factors and used those rankings to decide which people to retain and which to lay off. Even though this method helped take some of the emotion out of the process, "there were still a couple that were just gut-wrenching," Eggers says.

Once the decisions were made, the owners held a meeting with employees from both companies, explaining the layoffs and scheduling individual meetings with all workers to discuss their futures with the organization. Everyone who was let go was given two weeks of severance pay, and Eggers and the other owners helped them find jobs with other companies.

The story does have a happy ending. "Everything was very civil and friendly," Eggers says, adding that he maintains friendships with many former employees and even does business with a few. "Everybody [we laid off] is now employed, so I do feel good about that," he says. "And things are getting better here, too, so it appears we made the right choices."