I think you make great points above, however, I am by no means cheap on cost or on labor. Shoot if you ask around we pay our staff more than anyone else. We are also fairly pricy when it comes to our competitors. Not because I am just charging more but because I believe they are getting better value for their dollar. Our expenses are basically nothing. Less than 1k a month including office, utilities and supplies.
So yes this brings us full circle because even though we pay our employees more, are fairly priced ($25 - $40 work hour) and growing we still cannot recruit or keep solid employees.
So as to your statements above I completely agree. A 10% shift in any of the five areas to grow a business can reep great rewards. However, if I don't have the staff to do the work then it is all for not.