HomeEntrepreneurNumber of people, or amount of profit? Employees or Businesses?

As a beginning entrepreneur I’ve learned that we startups “need to know our numbers.” For entrepreneurs, numbers are the results of what we measure, and we need to measure the right things.

I had a brief discussion with a “up and coming” entrepreneur in Ohio recently and in our discussion he asked me, “How many employees to you have?”

I said, “Only me.”

With my answer he continued the discussion as if that having employees was the way to go.

His perception was that I was not a growing business because:

  1. I did not have any employees
  2. That having a number of employees was the right things to do for my company.

But is he right? Is his thinking the right for not only this economic climate, but going forward into the future?

Does having a number of employees really add value to a company? Does providing someone a job versus providing someone work really the best thing for people and their life? It depends on the business owners and the person wanting a job versus wanting work.

I had another conversation with another CEO of a company a while back and he had so much trouble with his employees that he “fired” them and then “rehired” them as contract employees with the same amount of pay. Why?

Because these former employees were now no longer “tied” to the company and they could now “hire themselves out” to others to make even more money. They were happier because they did not have the “9 to 5” mentality and could get the jobs done as they saw fit, without someone looking over their shoulder as took care of family or personal issues.

So, getting back to my Ohio entrepreneur. The real question is: Which is more costly for a company, having an employee or paying an independent business person that takes care of their own life as they see fit.

I presume that you’ll make more profit with having independent businesses working for you than having employees. I also see that as a plus for people wanting to take the initiative to do more with their life.

What do you think?

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