Small businesses cutting back on holiday spending

[November 04, 2011]  NEW YORK (AP) -- Small businesses are toning down their holiday celebrations and gifts -- again.

Many companies that had cut back during the recession were willing to spend more on the holidays in 2010. But owners are uneasy because the economy is still sluggish and there are growing concerns about a recession in Europe. So many are retrenching this holiday season.

Caterers say companies are having smaller parties this year than they did last year. Many that have rented space for parties in the past are instead having the events in their offices. Or owners are taking employees to a restaurant. And they're continuing a trend that began in the past few years -- they're planning holiday events or giving gifts that are meaningful or that help a charity. They want to let staffers and clients know that they're appreciated, but they don't want to do it in a frivolous way.

"People are becoming very thoughtful with their dollars and their entertainment in a different way," says Nancy Wright, president of Blue Plate, a Chicago-based caterer and restaurant operator.

The economy is making it harder to have a good time this year.

NOT ENOUGH TIME, MONEY AND BRAIN POWER TO PLAN

Caterer Ricky Eisen says many companies aren't planning any holiday parties even though the season starts in just a few weeks. "There is a reluctance to make a long-term commitment -- and long-term is like two months," says Eisen, president of Manhattan-based Between the Bread.

Money is definitely part of the problem. But, Eisen, says, "they're not really finding any time to actually plan it. They're working so hard, spinning their wheels to just survive." She's anticipating a lot of eleventh-hour calls for help when owners realize that the holidays are fast approaching.

Eisen says she's also being asked to handle more of the planning for some companies than she has done in the past. They're telling her, "take care of me, just come here and do it, I have no brain space."

Companies also want their parties to be more relaxed, pressure-free affairs than they've had in the past. So they're putting on informal get-togethers with just hors d'oeuvres, not formal dinners, Wright says. That's also a big money-saver.

CELEBRATING WITH RELEVANCE

Tom Madden used to have parties on a boat for the employees of his PR firm, TransMedia Group, in Boca Raton, Fla. This year, the big celebration will be at a fund-raising dinner for multiple sclerosis. Madden is buying two tables at the black tie dinner on Dec. 3. One of Madden's clients is emceeing the event. And he has other clients involved. So a social evening will strengthen his company's relationship with those clients, and it will also benefit a charitable organization. And give his workers a celebration that will make them feel good.

The economy is a factor in Madden's plans this year. "We've changed our practices quite a bit. We've looked for synergies," Madden said.

He does plan to take his staff out to a lunch to mark the holidays. But he noted that this is will be far from the lavish affairs his company has held in the past.

Gifts are another holiday expense that small business owners are rethinking. Terri Slater, who owns a PR firm bearing her name in Boca Raton, is taking more time to find gifts for clients that will help build strengthen their relationship, but that won't hurt her budget. "I'm cautious about what's going to happen next year" in the economy, she says.

MAKING SURE THE ECONOMY DOESN'T HURT THE MESSAGE

Helen Gregory says that at her PR firm, New York-based Gregory White, "our philosophy has been to maintain consistency." That means the company will again close the last week of the year to give employees time off for the holidays. And the company will still have a party for them, although it hasn't yet decided on the format.

There are some changes this year. Instead of an expensive gift, clients will be taken out for a holiday meal. "We're very aware of the need to acknowledge our clients this year more than ever," Gregory says. And face-to-face contact means more to clients these days than a box of chocolate truffles or a fruit basket, she says.

[Associated Press; By JOYCE M. ROSENBERG]

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