After years of working with independent contractors, I took my entire business in-house and hired 35 employees.
What a mistake that was.
I'm still going through the IRS audit because they don't believe I lost nearly half a million dollars.
For three years, we operated at a loss. My company had salespeople we didn't need making promises we couldn't keep. Our six trucks sometimes shipped half empty. Some employees were even stealing from me.
I fired them all, sold the trucks and stopped leasing warehouses.
Now I'm back to partnering with truckers who always deliver at a fixed cost. I always profit. Computer programmers we found on Freelancer.com build and manage our software. Independent shipping companies, foreign agents and warehouse owners all provide what we need.
I was paying people to sit in a chair, whether or not I got productivity out of them. Now I pay for what I get.
Editor's Note: An earlier version of this story included The Marketing Zen Group and CEO Shama Kabani. It incorrectly identified her employees as freelancers. The company maintains a virtual office and employees work from home. However, they are not independent contractors, and Kabani does indeed pay taxes on their labor.