Skip to content

Navigating Growth: Avoiding Common Pitfalls in Scaling Your Business

| October 9, 2023 | By

Not only do you need to focus on the right measures of success but also avoid these common pitfalls when focusing on growth and scaling your business.


Growth is undoubtedly a thrilling phase for any business, but it can be a double-edged sword. Unmanaged or reckless growth can lead to disastrous consequences for an organization. As your business expands, it's essential to keep a watchful eye on some common missteps that can hinder your progress. Let's explore these critical mistakes to avoid when navigating the path of growth:


🗣 Poor organizational communication:

Growth can be chaotic, and each department is hard at work trying to build a great business. In a time when companies have moved to remote work as the norm, communication is more critical than ever. Personally, I'm a proponent of over-communication rather than under-communication. When departments and teams aren't communicating effectively, they can become siloed and disconnected, leading to misalignment, duplicated efforts and conflicts. In addition, when employees don't feel like they're being heard or informed, it can lead to low morale and disengagement. If your company is growing, it's vital to prioritize communication from the outset. This means establishing clear lines of communication, fostering a culture of transparency and openness, and investing in the tools and processes needed to support effective communication.


🎯 Ramping up marketing spend before customer behaviour is understood:

Marketing can be an integral lever for an organization's growth, and with new customers coming in, it can be tempting to ramp up your marketing efforts. Before you do, you should ask yourself a few questions. Do I understand my customers' behaviour/buying habits? Am I attracting the right customers? What is the lifetime value of my customers? What is my current customer acquisition cost, and what should my target acquisition cost be? Without a deep understanding of your customer cohorts, you will burn through your budget before hitting those important growth levers. My recommendation is to start your spending small, iterate, test and refine your marketing efforts to gain a deeper understanding of your customer before ramping up. 


⚡️ Focusing on hiring leaders and not doers:

A common mistake I've seen is that growing businesses will focus on hiring many highly skilled leaders of an organization without investing in doers. Leaders are great strategic thinkers, developing and executing vision and managing people; however, they might not have the hands-on skills needed to get the job done themselves. If you focus on hiring only leaders, your payroll can get bloated as higher salaries for these positions are typically demanded. Doers, on the other hand, are often seen as more tactical and action-oriented and ultimately will execute on bringing the vision to life. The truth is that both leaders and doers are essential to building a successful team, but there needs to be a balance. I suggest hiring a few key leaders in place initially with more doers in the organization. If your company requires specific leaders, outsource fractionally until the company is at a point where they need that position filled full-time. 

💸 Lack of accountability on spending: 

As a business grows, so does its spending. Whether it's on marketing, hiring, or product development, there's often a lot of money flowing in and out of the company. However, this spending can quickly get out of control without proper accountability. In an economic environment where policy is shifting towards more monetary tightening, raising capital is a much more challenging task. To avoid these dangers, growing organizations need to prioritize accountability when it comes to spending. This means establishing clear policies and procedures for expenditures, appointing someone to oversee spending and enforce those policies, and regularly reviewing spending to ensure that it aligns with the company's goals and priorities. Accountability can be challenging, but it's essential to building a sustainable and successful business. 

📈 Focusing too much on stock price:

This one is specific for public companies, and as a public company, your stock price is a key indicator of your financial health and market performance. It's natural to want to see it rise and to feel pressure to take action that will increase it. When you focus on your stock price, it's easy to become myopic and prioritize short-term gains over long-term growth. The focus should always be on the customer and product, prioritizing long-term value creation and taking a holistic approach to decision-making. 

🔜 Investing in automation equipment too soon:

Automation equipment is great. Don't get me wrong; it can help reduce labour costs, create efficiencies and increase gross margin, which are key metrics for organizations looking to scale. However, these types of equipment usually require a high initial capital outlay. Without the capacity, the ROI on these types of equipment isn't worth the capital investment, especially if that cash can give your organization a greater run-way. A business should wait until it has reached stability and growth, where this equipment can truly drive additional value. In addition, if you decide to invest in automation equipment, you should seek asset-based financing arrangements to limit the drain on cash. 

Young handsome businessman getting crushed by a big formal shoe-1

⚠️ Ego-driven decision-making:

Ego is the enemy, and sometimes it can be easy to get caught up when your business is experiencing so much early success. This can lead to decisions that are short-sighted, selfish, and ultimately detrimental to the organization's success. Ultimately, the best decisions are made with the organization's best interests in mind, not our egos. By recognizing and addressing the dangers of ego-driven decision-making, we can become more effective leaders and ensure the long-term success of our organizations.



🫂 Neglecting your culture:

Finally, remember your company culture. Setting and nurturing culture is the responsibility of everyone in the organization. As your team grows, it's important to maintain the values and culture that made your organization successful in the first place. Sure, mission, vision and values are great at creating alignment toward a common goal; however, if we don't embody these values, these are just words on paper and will create misalignment throughout the organization. 

By sidestepping these common mistakes, you'll be better prepared to manage growth within your organization and construct a successful, sustainable business. What other growth management errors have you encountered or observed? Share your thoughts and experiences in the comments