NEW YORK (AP) — Many small businesses are scaling back their holiday plans not only because of budgets and cash flow but because some owners believe these hard times call for less frivolity.

They're still marking the holiday season, but parties may be a little more subdued, and there may be fewer gift baskets sent to customers and clients.

St. Louis-based IMPACT Group will be donating to charity the money that it had planned to spend on gifts of candy for clients.

“With the economy in its tumultuous state, we felt that it would be most appropriate to give to those who really need it,” said Melanie Winograd, marketing specialist with IMPACT, which provides career transition services, such as relocation and outplacement.

“We've been very fortunate to have a very successful year, so we felt it would be most appropriate to donate,” said Winograd, who added that the company does plan to hold a holiday party this year.
Instead of expensive chocolates, Multicultural Marketing Resources Inc. is giving some of its clients free mini-press releases.

“We're calling clients we usually send a gift to, and this year, we're saying, ‘We hear your marketing budgets are taking a beating,’ ”said Lisa Skriloff, president of the New York-based   marketing and public relations firm. The press releases are “more meaningful for our clients” than the usual box of candy, she said.

The company isn't giving up all its usual holiday observances – top clients are still being taken out for lunch. But Skriloff noted that those meals are working lunches, where her staff and clients discuss planning for the coming year.

Business owners who want to save money or give clients something with more value this season may need to be a little more creative. The answer, as Skriloff's firm found, is likely to be with a company's products or services, which unlike candy or knickknacks are at the heart of the business relationship. A discount is likely to be remembered and appreciated far more than a pen or mug.

Along that line, owners need to put some thought into how they can have holiday celebrations that are meaningful and don't break the bank. Many owners believe that no matter how tough the economic times are, canceling a party is a mistake, giving staffers the feeling that the company doesn't care, and in the process, deepening the gloom everyone is feeling.

Talent Retriever, a recruitment consulting firm in Burlington, Mass., did consider whether it should have a holiday party this year – and decided that even with a down economy, it was better to go ahead with the event.

Cheryl Barbato, vice president with the company, said managers asked themselves what kind of message it would send if the party were canceled. “We felt really strongly about having a party to show our appreciation” to the staff, she said.

But small businesses can find ways to cut corners and have parties that are more in keeping with the times. Some decide to forgo serving alcohol at their holiday events – which also can lessen the possibility of people getting into accidents or behaving inappropriately. Or they'll serve beer and wine, but not the hard stuff.

Owners have plenty of options for downscaling a party. Instead of a big affair in a restaurant or hotel, the party could be on the company's premises. Instead of a catered affair, it could be potluck – even though employees are basically supplying the food themselves, many have a good time showing off their culinary skills to one another.

Many companies are finding they can take advantage of the fact that caterers, hotels and other companies in the event planning business are seeing their bookings fall this season.

Barbato said Talent Retriever was able to book a cruise in Boston Harbor at a lower price than the company would have paid last year, simply because the cruise operator had an open date and was unlikely to find another client at this point this season.

A holiday gathering doesn't necessarily have to be a party – some companies arrange for staffers to spend a day volunteering for a charitable group or at a school. And some owners recognize that rather than party, their employees would rather have a little extra time off during the holidays, so the time that would have gone to a party becomes a paid day off.