So your hypothesis is:

  * Company grows profits
  * Company decides to spend profit on head count
  * Profit goes down

Why do you believe that's the case? Any hard data?

I'd say it's more usually

  * Company makes profit
  * Company invests in more people
  * Profits rise, company grows.

Well I think we've identified the point in which our opinions diverge.

1. Company makes profit. 2. Company invests in more people. 3. Profits rise, company grows.

Step 2 is not a prerequisite for step 3.

And what you state is my hypothesis is not what I'm saying either.

How about this: 1 - Company makes profit. 2 - Company figures out how to grow profits, regardless of increase or decrease of headcount. 3 - Profits rise.

What, do you work in HR or something? (jk)

>> "What, do you work in HR or something? (jk)"

Heh no. I'm a single founder with a 'lifestyle business', making money off it currently. But I plan to grow the business (head count+diversify) when I can.

I hate to pile on here,but... I think the parallax here is that axod may be equating headcount with income diversification. i.e. More people mean your company must be expanding its interests or avenues. Income diversification, and the headcount increase usually (necessarily?) associated with it is probably a better metric for the "Lifestyle" moniker.