Written by When you’re an entrepreneur, your business is more than just how you make a living. It’s an extension of your humanity: an idea unique to you and a way of expressing yourself to the world.
So when it starts to succeed enough to warrant expansion, it’s natural to feel some excitement. Your vision is becoming a reality!
Still, there are some pitfalls that can trip up small business owners who get caught up in the frenzied energy of grow, grow, grow. Without a bit of reflection and forethought, some of them can be downright easy to fall into.
Below, we’ve listed five of the most common mistakes small business owners make — so you can grow right past them.
1. Expanding too quickly
If you’ve been grinding at your business for a long time, growth can seem like an unmitigated positive. But scaling too quickly can lead to not-so-nice effects.
Depending on whose statistics you’re reading, between approximately 75% and 90% of startups fail. Growing too quickly is often one of the reasons: It can be easy to get caught up in the sudden success of your product or service. But at some point, you’ll reach market saturation, and as sales fall off, you’ll be left with a much higher corporate overhead.
Hasty hiring can also lead to a high rate of employee turnover, which can have negative downstream effects on company culture and morale — creating a self-sustaining downward spiral. (More on hiring and company culture in just a minute.)
2. Failing to manage your finances
Depending on your business, your finances might look very different as you expand. For example, if you started as a solopreneur — say, a freelance writer or graphic designer — you may never have separated your business and personal finances in the first place. (It’s not a practice we recommend, but it happens.)
Once you start hiring employees, however, separation is not optional — and it can add a huge layer of complication to your workflow if you haven’t created the right infrastructure ahead of time. Fortunately, there are powerful tools (think: all-inclusive HR software) that can help you manage your books with relatively minimal effort, but you’ll still need to invest the time and energy to get set up.
Another common financial pitfall is the same for small businesses as it is for individual consumers: failing to create and stick to a budget. Many small businesses take out loans to start their operation, and even small loans can add up.
Going into debt can be fine if it pays off in the long run. But while you’re growing your business, it can be difficult to ascertain your cash flow and ensure you’re not overstepping reasonable budgetary constraints. That’s why it’s imperative to create and regularly update a business budget.
3. Denouncing delegation
It makes sense that you’d want to maintain a high level of control over your business. After all, it’s your baby.
That said, failing to delegate responsibilities to trustworthy partners and employees is one of the most insidious mistakes a founder can make. Even on the smallest scale, staying trapped in the day-to-day minutiae can keep you from focusing on the bigger picture and eventually reaching loftier goals — and as your business expands, so do all those little details.
4. Hiring the wrong people
To delegate with confidence, you’ll need to hire with confidence, which means that recruiting is worth your time and energy. (That is, until your business is large enough to have a salaried recruiter, of course.)
Creating a thoughtful screening and interviewing process — and going through it for each candidate — can be time-consuming, but it may save you time in the long run.
5. Not focusing on company culture
Thoughtfully scaling your business also means allocating resources toward creating a company culture that incentivizes employees to stay. According to iHire’s 2024 Talent Retention Report, voluntary quitting has been on the decrease — but it still happens. The most commonly cited reason employees resign, per the survey? Toxic or negative work environments, which sent almost a third of employees who had quit a job in the last year packing. Poor company leadership and tension with managers were not far behind.
Fortunately, there are plenty of ways to foster a fun and expansive company culture, one that offers employees the flexibility, agency and growth opportunities that can make a position attractive enough to keep.
In this — as in every pitfall described — the name of the game is slow and steady. Excitement is good, but stepping back your pace enough to think through your decisions carefully will go a long way toward making your expansion not just stirring, but sustainable.