Head Count != Success

In the pre-internet world the number of employees that you had was seen as a measure of success. If a restaurant/store/office had more employees, it was considered to be doing well. The ability to automate or outsource was almost nonexistent. You dealt with increased volume by throwing more bodies at it. Hence, people = success.

These days? Not so much, yet the prevailing wisdom has seemed to linger. Smart businesses automate, outsource, hire contractors and part-time employees, and then only hire full-time when it’s absolutely necessary. It’s possible to scale a profitable business with just a few people. Instagram had 13 employees when they were sold for a billion dollars.

In e-commerce, I’ve known plenty of 1-3 person businesses that take advantage of dropshipping or FBA to entirely eliminate the need for a warehouse. Add in an off-the-shelf platform like Shopify and you don’t need engineers, programmers, or designers either. Conversely, I know plenty of retailers who aren’t savvy in any of this and have double the employees they really need. Not only does “head count” not necessarily equate to success, it can be inversely related to success.

I’m always a bit disappointed when people ask me what our head count is in the context of how well our business is doing. Our revenue and profit per employee are fantastic. I want to keep growing those numbers. I want to continue to eliminate unnecessary tasks, automate as much as possible, and intelligently add employees as needed, instead of just blindly throwing more bodies into the mix. We’re able to get more done with less. That’s a measure of success I’d like to see get more attention.

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