Forget employees. These businesses rely entirely on freelancers. That means no taxes, unemployment insurance or labor regulation.
It's all about reducing cost. As everything becomes more global, competition keeps driving prices down. We have to keep up.
I work for Kansas City's Hispanic Chamber of Commerce, and I run a recruitment business on the side. When I noticed that many companies were calling into the chamber looking for bilingual job candidates, I saw an opportunity to launch a company that finds and recruits them.
With very little startup capital last year, I turned to freelancers online to build my website and serve as recruiters.
Now a programmer in the Czech Republic maintains my website working 10 hours a month. She's quick and understands what we're doing.
Another freelancer interviews candidates, and a third does resume consulting. Both of them have babies and want to work from home, so the arrangement works out for them.
All the labor will cost me only $10,000 this year.
It frees me to do what's more valuable with my time: looking for clients.