Small Is Beautiful — Don’t Hire, Partner

January 8th, 2009

monkeys_groomingA business forced to shrink may be stronger, according to a recent column from The New York Times’ Paul B. Brown. He makes a solid case for the joys of staying small and rounds up lots of great advice from blogger Jarkko Laine,, and the always-insightful Seth Godin.

It’s an interesting look at the bright side of the current economic climate,  in which  businesses have been forced to scale back or limit growth. And for many entrepreneurs, staying small can lead to big success.  I have seen a lot of promising businesses crash and burn because they tried to grow too quickly. And I have seen plenty of  inspiring business success stories that started with one guy and a lot of ingenuity.

I started my own company as a business of one. I had no full-time employees, but I had an impressive team of freelancers, consultants, partners, and vendors. I continue to rely primarily on this model for a number of reasons:

1) Access to the best talent: There are a lot of brilliant people out there who aren’t willing to settle for one full-time job working for you. The best and the brightest in any field tend to be running their own consulting businesses or working on other fascinating projects (writing books, starting nonprofit foundations, teaching, raising kids, touring with their ska band, etc.). These people are too busy to give you all of their time, but they often have availability to consult on a specific project or devote a few hours a week to you or your clients. I have been able to hire some amazing people with this approach. They contribute diverse perspectives and more innovative ideas precisely because they are not spending 40+ hours per week sitting in a cubicle in your office.

2) Low overhead: Outsourcing allows you to bring in talent only when you need it. If your project pipeline is unpredictable (and whose isn’t these days?), it makes sense to be flexible. Assemble a stable of reliable freelancers and consultants that you can bring in when their skills and expertise are called for.

3) Ability to stay nimble: In this economy, a small business has to stay nimble. When you’re small, you have the ability to adapt quickly when the market changes, when you have a great new idea, or when a fantastic opportunity comes along. That’s a lot harder to do when you’ve got a large full-time staff to feed and clothe.

4) More engaged employees: Did you know that employees of small companies are more than twice as satisfied as those in large corporations? (Source: AgeWave/The Concours Group)  When I wrote Escape from Corporate America, I interviewed a number of former corporate superstars who fled the bureaucracy to work at smaller companies. They cited benefits including economic opportunity, independence, the ability to help build a company,  flexibility, and more meaningful work.

5) Benefits of supporting other entrepreneurs and the free agent economy: Outsourcing and partnering lets you help other entrepreneurs and solopreneurs succeed. Working for yourself is an American dream. Don’t you want to be part of creating more opportunities for small business owners in this country? The opportunities that you create are more than likely to come back to you. When you join and support the entrepreneurship community, you  form rewarding and profitable relationships with future partners and referral sources. And I guarantee that you will meet a lot of very interesting new drinking buddies.

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Dan Erwin

There’s a lot to be said for being a “virtual organization.” I’ve followed that rule for nearly 25 years–and with significant success. However, once you develop a niche, you often find out that a multiple-professional company will horn into your business. Sometimes you can out-compete them, but other times you may have to refine your business strategy and look for new clients. But that’s the name of the game.

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