I have had the opportunity to enjoy the company of many executives recently and there is a common trend I am noticing that I believe will be valuable to share.

The companies whose management is making wide-spread decisions to effectively cut all costs necessary to operate their businesses are financially in worse shape than those who have maintained operations and methodically evaluated where to focus cost cutting (and also where to focus spending).

I call these "knee-jerk" blanket cost cutting decisions Emotional Management and will suggest that everyone be wary of it.

That being said, I do not mean to be fueling anyone's frustration with the decision of managers at your own company. Rather, I am proposing a focus on the process with which you are making your own decisions. Recruiting, in my opinion, is not a hobby or a job, but a business - whether you are working independently or for a larger firm. Every recruiter manages their own relationships with both clients and candidates and is thus, running their own business.

So how are you making your decisions?

Are you cutting costs because of a fear of the unknown - the unknown length of the recession, the unknown direction of the economy in 3 months, the unknown ability for you to make a sale next month?

Or are you cutting costs because you are reviewing your business and determining which costs are necessary for survival, which are necessary for growth, and which costs are "lifestyle" - costs you would like to keep but are not necessary to the survival of your business.

If your decision making process is based on the unknown, you are likely making emotional decisions. Emotional decisions do not often fall into a greater plan - which means your outcome, similar to your decision making process, will be unknown. This can unfortunately lead to a downward spiral.

If you are not sure how to put together a plan to evaluate your expenditures, may I propose the Benjamin Franklin Decision Making process. I unfortunately cannot find a great website to source for this, but a Google search will support this process. Benjamin Franklin Decision Making is simple, draw a "T" on a piece of paper. At the top of the T, write down the cost - a service, product or labor you are paying for. On the left hand side, list all the Pros and on the right hand side, list all the Cons. After evaluating whether this cost is necessary for survival, can help fuel growth, or is a "lifestyle" cost, then you can comfortably determine whether to keep it or not.

Going through this process will help you feel more comfortable with your decisions and will also be the beginning of a plan. You will know which costs are necessary for survival and growth - and those are the bare minimums you need to cover. (If you are wondering why I consider growth a necessary cost, read my article on why you need to focus on marketing and advertising in a recession). When you feel comfortable you can support these costs, then you can evaluate which "lifestyle" costs to include in your budget.

Having a plan is critical in preparing for the months ahead. I'll end with a quote from Benjamin Franklin: "Failing to prepare, is preparing to fail." Know how you're making your decisions.