I'm a little surprised by the ignorance shown in this thread by folks who should know better. I think it's because folks are so close to the trees they can't see the forest. So, let me describe the development of an imaginary business.
Sparky had a good career as a journeyman. His boss, and customers, loved him, so he often had 50+ hours of work each week. So, Sparky decided to go out on his own.
That's when Sparky got hit- life got him coming and going. Sure, he could bill at 'shop rates' now, but he also found new expenses every step of the way. Every hour he could bill for was offset by two hours he couldn't bill for- time spent on the road, meeting with customers, running for parts, pulling permits, making drawings, witnessing inspections, etc.
Sparky had been working 10-hr days, and getting paid for ten hours. Now, there just isn't room in a day for ten 'working' hours, plus 20 'support' hours, plus time to simply live. Even if there were, Sparky can't be on the job site AND in city hall at the same time. He's spending all day bouncing around like a ping-pong ball.
So, Sparky hired a helper. Trouble is, that helper had to do enough work to pay for both of them. That's a pretty heavy load.
Sparky was also spending a lot of time driving - which meant he couldn't be fielding calls, making follow-ups, researching parts, etc. He also wasn't at his 'office' to accept deliveries, etc. So, Sparky got his wife's neice to sit by the phone all day. Now that helper's workload has to support THREE people.
Then, the helper missed some time, simply because his 250,000 mile, 12-yr. old pick-up had something break. One also has to admit that the appearance of the truck did not inspire Sparky with any desire to hang his name & number from it. Oddly enough, Sparky DID have folks walk up to HIS truck, write down the info, and call.
Can the helper work hard enough to pay three people AND buy a new truck? I don't think so. That workload needs to be shared.
So, Sparky adds a few guys. He leases four trucks. Now he has four guys in the field, whose work pays for six people. Sparky is now free to pursue business. The phone girl is a lot busier now that there are five trucks (4 leased and Sparky's) spreading the word. Each guy in the field has his work pay for 1-1/2 people.
Financially, that's a lot easier than having one mans' work pay for 3 people and a truck.
Plus .... well, by golly, if Sparky takes a vacation, there are still folks to answer calls. Sparky can go to the Bahamas and actually relax - not field panic calls all day.