Is there a perfect size for a business?

For Errol Damelin, founder of short-term lender?Wonga.com, which employs 100 people, finding the right balance between permanent and temporary staff is a constant and careful balancing act. ?There?s not necessarily a right or wrong answer for any given business,? he says. ?From experience, freelance and outsourced solutions can help maintain flexibility and keep staffing costs down for an early-stage startup. But, especially when incentivised with equity, permanent staff bring more passion, dedication and drive.?

It is possible to run a company with ultra-lean overheads. Amanda Zuydervelt, founder of?Stylebible.com?(see?case study here), has managed it, as have a million web-based startups, though costs to lawyers, financial advisers, technology specialists and even public relations consultants will always mount up. No company can maintain a cost?base of zero for long.

And to be sure, certain types of companies seem to lend themselves to the lean-and-mean business model. Animation specialist Pixar is often cited as an example here. So, too, is smoothie giant Innocent Drinks. ?

Ultimately, though, there is no perfect formula in the business world. Companies grow to suit the current market and internal aspirations. A British oil firm would be hard-pushed to add an international presence without placing new feet on the ground, from engineers to government lobbyists.

Retail banks, weighed down by compliance procedures, tend to remain plodding and cumbersome, as do most blue-chip corporations, which, in order to grow, need scale ? and that, again, means adding headcount.

It seems Dunstone?s reflections on Carphone Warehouse, while superficially sagacious, are hollow in meaning. Could this most highly driven of entrepreneurs have become Britain?s first digital billionaire, creating Europe?s largest independent mobile phone group, without employing an awful lot of people? Probably not.

Nor is it easy to answer that ?permanent versus temporary? debate. Most individuals, says Just Add Water?s Feeney, seek certainty. Full-time employment is, she believes, an ?important safety net for people?.?

In short, there is no perfect size, no panacea, no defining set of ingredients. Companies cut their cloth according to economic conditions ? growing in order to bake more cakes, drill more oil wells, or, in Dunstone?s case, sell more phones. Would Carphone Warehouse re-employ those 500 sacked staffers if it led directly to an upsurge in profits? You bet it would.

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