Saturday, January 20, 2018

Economies of Scale

Companies come in all sizes. Some industries like, plumbing, electrical or HVAC repair can be family businesses where the wife answers the phone and the husband has a phone, tools in the truck and may have a helper. If the husband is an expert and the wife can handle the office work, this is the most cost-effective model.


Schwan Foods designed their Driver-Salesman job to operate like the home-based plumbing company.  The wife answered the phone and scheduled deliveries and the husband had a phone and a truck full of frozen food to deliver to homes and stores. They were paid commissions on everything they sold and the company provided the refrigerated truck.

 

Family owned restaurants can be viable if the owners own the land and the building to lower their fixed costs and avoid rent payments.

 

There are lots of service businesses that can operate this way. Small manufacturing companies doing low volume can function from home and many businesses started that way.

 

I’ve operated a private consulting practice for Atlanta electronics manufacturing companies from home since 1993. That enabled me to keep my expenses down and I didn’t really need to rent an office. I would go to the customer’s office when I needed to do that.

 


Norb Leahy, Dunwoody GA Tea Party Leader

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