This is a cost accounting problem, not an employment cost problem.

Before you "make them all contractors", look at the IRS form SS-8. That will be used by the IRS when you have a dispute over who is or is not an employee. Once you have your employees and contractors sorted out, do some cost analysis. You need to have your bookkeeping system set up for cost accounting and kept up to date for this. Find your profit margin by job, employee and product. You may find out you are providing services or products that are losers. Next, get together with your accountant and do some break even analysis. Then take a look at what your competitors are charging. Adjust your prices where you can, shed anything that is not profitable and see if you are doing better than break even. If not, find a buyer for the business or close the doors. If you find certain products and services are your real money makers, consider niche marketing. Remember, without good financials, any effort at analysis will give false results and is just a waste of time and effort. If you are having trouble figuring out where all the money went, get together with your accountant and set up a your bookkeeping system so that it also collects the cost accounting information you need.