If you have the type of business that requires very few employees (consultant, solo attorney, solo CPA, solo financial advisor, and many others) should you consider whether you need ANY employees? The consultant’s mantra the last 25 years has been to hire others to do the menial less critical tasks so you can focus on the important revenue generating tasks. You justified the expense knowing your employee’s work would free you up to get a few more customers or clients, which would pay for the employee. But the economy has changed, in a big way. And it may remain tepid for some time.
The WSJ today describes how more start-ups are starting with fewer employees. Technology has made this possible, the bad economy has made it necessary.
Alan Weiss has created an impressive industry advising consultants how to run their businesses. He claims $1M+ a year revenues with no employees and only a home office.
Do you really need your employees? Could you do their work, cut your overhead and not have to scrape as much for new clients? If the work isn’t out there (even Best Buy is struggling to sell TVs and cameras), do you have the time to do the work of your employee, thereby reducing your overhead and increasing your profit margin? No payroll service, no employee regulations to follow and no employee taxes.
Instead of trying to make the old/current ways work in this seemingly endless recession, maybe its time to rethink how you do things and find new creative ways to maintain or even increase your profit margin.
As Evan Saks in the WSJ article said:
I don’t have visions of building an empire. I just want to create a nice profitable business.
Has this economy opened the door for a surge of entrepreneurs with no employees?