You Don't Need a Big Team to Run a Successful Business. Here's Why

Bigger isn't always better, especially when it comes to staffing.

Small businesses have been feeling the bite these last few years, rocked by the double whammy of inflation and economic uncertainty. As a result, some companies have already started to freeze new hires while others have had to lay off staff. Given that labor accounts for a large portion of business costs, it's not surprising that some owners are looking at ways to scale back their workforces.

The good news? You don't need a big team to get things done. Here are three reasons why.

1. Contractors are a powerful force

There are pros and cons to using contractors rather than full-time employees. But there are a lot of circumstances where gig workers can help you get the job done without the commitment and human resources costs of salaried workers. Sure, you may pay more per hour, but you won't have to pay for benefits like health insurance or paid leave.

Another advantage is that you can reduce your fixed costs, making it easy to reduce your cash flow quickly if the economy takes a downward swing. That can be a double-edged sword as it means you aren't building a loyal team who knows your business inside out and may be willing to go the extra mile in a crisis.

Gig workers won't be the answer to everything. The trick is to think about what tasks might be better done by a freelancer. For example, you might be able to outsource a specific task that needs to be done by a set date. That said, bear in mind that a freelancer will work on their own schedule to meet your deadline so you can't expect them to be available whenever you need them.

2. You can automate a lot of tasks

At the risk of sounding like an old lady, it's incredible how far business automation has come. When I set up my first small business over 20 years ago, the few tools that did exist were clumsy and hard to use. Now the challenge is deciding which parts of your operations to automate and which software package to use.

Here are some areas where technology could streamline your operations:

• Customer relationship management (CRM): CRM software can help you generate and manage leads as well as maintaining existing customer relationships. It'll also help you identify trends and focus on specific clients that may account for a larger segment of your income.
• Website and content management: You don't need to know anything about websites to build and maintain a professional site. The right system depends on how much content you produce, how complicated your website is, and how integrated you need it to be with other tools.
• Accounting: Good accounting software can help you invoice and track payments as well as managing your books.
• E-commerce: If your business does a lot of trade online, chances are you already use some form of software to ensure the process, particularly payments, work smoothly.

Check out our small business page for more ideas about how automation could save you time and money.

3. Small teams can be more agile

One of the advantages small businesses have over the corporate giants is their agility. Fewer people often equates to better communication, less red tape, and less time spent managing them. Plus, when there are only a limited number of employees, each one knows their work matters. It can stimulate creative solutions and improve collaboration.

Bottom line

As a small business owner, it often feels as if there aren't enough hours in the day. It's easy to think hiring more people will ease the pressure and mean you can achieve more. The trouble is that hiring can be costly, and training and managing staff can be time-consuming.

There are many situations where hiring people can help, but it isn't always feasible -- whether that's down to money or because you can't find the right candidates. If that's your situation, look for ways you can turn this to your advantage.