Launching a company is tough, but it gets even tougher when you have to do the odious things--announcing layoffs, reducing benefits, missing your kid's school play--that haunt every founder. New companies force you to decide between your success and your reputation, friendships, and family. "We either toughen up so we can just get through it, which can come off as being a jerk, or we fall all over ourselves trying to be nice," says business coach Beth Buelow. Chances are good you will never make everyone happy, but there are things you can do to minimize the pain.

1. Be collaborative and transparent

Facing a hard call sucks, but dropping a bomb, and running, makes it worse. "If you just say, 'This is the news; deal with it,' people will fill the gap you give them with the news they want to make," says Peter Shallard, a psychotherapist who specializes in entrepreneurs. Instead, actively share your rationale. Cash-flow problems prompted Naomi Poe, founder and CEO of gluten-free-flour maker Better Batter, to search for many cuts, including coffee and health insurance. She gathered employees, showed them the financials, and invited them to choose what should go. When she needed to reduce salary costs by half, Poe had each of the company's five employees explain how much income he or she needed to meet obligations. "I asked people, 'If you could draw this up, what would your solution be?' " she says. In the end, she took a big pay cut herself. That approach allowed her to retain all employees and "has paid off in terms of loyalty and productivity."

2. Take the inevitable blows

When creator and Legacy Publishing CEO Steve Anderson changed his business model, he needed to lay off half the company. So, after the announcement, he let the punches fly (metaphorically, of course). He engaged with employees who challenged the new business model, and in some cases, he shared additional information to help them see the bigger picture. Sometimes, he just listened, recognizing that not everyone wants an explanation. "You don't want to put people out who are angry and disgruntled," Anderson says.

Creating space for grievances after you've explained yourself is a smart move. "People want to be seen and heard; that can go a long way in retaining trust," says Buelow. "You don't have to have all the answers."

3. Mitigate and apologize

As founder of public relations automation platform Crowdbuilder, Joy Schoffler was upset when she realized she had to fire a friend whom she'd hired to lead several projects. "I didn't need her for the role I had initially hired her for," says Schoffler. She did everything she could to ease the pain, including giving the friend lots of advance notice, explaining it wasn't her fault, and paying her severance out of her own paycheck. The friendship is not as close as before, but Schoffler believes she did everything she could.

Realizing what you can and can't control is vital, says Buelow. You want to be "empathetic and caring--but without taking responsibility for the other person's reaction."

4. Do a cost-benefit analysis

Choosing work over important family and friend events can earn you the title Biggest A-hole. Learn to do a cost-benefit analysis: Some events are too important to miss. Identify and attend those events, says Shallard, no matter what. When you really can't, don't hide from the disappointment you've caused. Agustina Sartori, co-founder of GlamST, a virtual makeover and cosmetics site, had to miss a friend's wedding in her native Uruguay because of venture capital meetings in Silicon Valley. She explained to her friend how critical the meetings were, and she Skyped into the pre-wedding preparations. The friend was still upset. Over time, friends have seen Sartori's devotion to her business, and things are getting better. "They don't agree with me," says Sartori, "but little by little, they understand."