While it’s true that most people start businesses with the intent of growing them, the size or speed of this growth may not be the ultimate measure of success. Becoming too large or expanding too quickly can create unexpected challenges, and many small businesses have failed as a result their inability to manage growth strategically.

If you are focused on growing your business this year, here are some of the most common challenges to keep in mind:

Cash Flow

Cash flow becomes more complicated as a business scales up. Rapid growth not only increases the rate at which cash comes into your business, it also increases the rate at which it goes out. This is because expansion requires many entrepreneurs to invest capital in one or more areas of their business, such as purchasing equipment and raw materials to increase production, hiring additional sales staff, or increasing marketing and advertising budgets to attract new clients.

It is not uncommon for small business owners to suddenly find they have more cash outflow than expected. When you are in a place where your monthly expenses exceed your operating capital, one bad month, a single missed customer payment, or a significant setback can put your business in dire financial straits.

Small business owners looking to expand need to be on solid financial ground. Evaluate whether or not you have enough capital to support your growth strategy, and explore financing options before you make the leap. Having access to working capital financing can help you cover expenses as you expand, rather than relying on existing cash flow.

Summit Financial Resources offers custom financing solutions that use your accounts receivable and other assets as collateral. We are not regulated like a bank, so we can structure more flexible deals, take more risks, and make funding decisions more quickly to help you move beyond any financial hurdles.
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Infrastructure and Logistics

Scaling a business brings with it a new level of complexity, and you will need robust systems to manage it.

As your small business grows, so does demand for your products and services. Expansion that happens seemingly overnight can create challenges with order fulfillment and put enormous pressure on your infrastructure as more time and resources are required to keep your operations running smoothly. For example, your equipment might not be able to keep up with the increased production capacity or you may discover new inefficiencies in your processes that quickly impact your bottom line.

Rapid growth can also fuel the need to make significant changes to your organizational structure. As you hire more staff, you will need to put people and processes in place to manage your human resources or risk losses in morale and motivation that often result as staff struggle to adapt to change. In addition, the tools you’ve been using for things like accounting, payroll, and time management may no longer be adequate as your company grows. It is critical that you take stock of the technology needed to run your booming business and upgrade to reliable and efficient systems as needed.


For many small business owners, growth means stepping back from day-to-day operations into a leadership role. Managing the daily workflow of your business is as important as ever, but growth-minded entrepreneurs must have a big-picture vision of where they are going and an ongoing focus on planning for the future. If your business is growing too quickly, your leadership team may struggle with managing their increased workload while devoting time and energy to the long-term planning needed to keep your growth on track. This can compound other problems caused by scaling too quickly.

Keep in mind that although it’s important to stay true to your vision as a business owner, flexibility is essential during periods of rapid growth. Stay on top of developing trends in technology, business strategy, your industry, and the economy, and be prepared to adapt your approach as needed.

Customer Service

Small businesses can offer an unrivalled level of personalized service, developing strong customer relationships, generating repeat business, and building trust. However, the spike demand that results from rapid growth can make it difficult for your customer service team to continue giving each customer the same amount of time and attention. A sudden increase in customer service complaints could be a sign that your business is expanding too quickly.

Addressing this issue requires establishing a delicate balance between adjusting staffing levels and adopting new procedures. If you have more clients and do not increase your staff, employee overload and burnout can lead to mistakes, which in turn leads to dissatisfied customers. If you do scale up your customer service team, you may be tempted to introduce more systematic procedures that result in a less personal approach that can alienate your customer base. Small business owners must remember that while acquiring new customers can help them grow, it is equally important to keep their existing customers happy.

Company Culture

Smaller companies have unique ways of doing business and sharing responsibilities. With fewer layers of management, small business owners are typically more hands-on, stay in touch with workers, and personally guide the direction of the business. They also have the ability to build a company culture that reflects their values and mission and serves to support, inspire, challenge, and reward their teams.

A business owner who has been successful at establishing a strong company culture will be faced with the challenge of preserving that culture as they scale their business. To keep your company culture intact, you need to make sure your involvement continues to be felt as much as possible. Expanding too quickly can make this difficult to do.

For starters, the more personnel a company has, the harder it is for the owner to maintain the same level of personal engagement and be involved in day-to-day decision-making. Changes in structure or adding layers of management can result in an organization that is more segmented and bureaucratic. Current employees may feel less supported and new staff may find it difficult to engage, which can have a negative impact on morale and retention.

In the rush to hire more staff to meet rapidly increasing demand, you or your HR team may not take the time to focus on candidates whose values, beliefs, and behaviors are aligned with those of your organization. This can lead to hiring poor culture fits who will fail to adapt and leave to find a more suitable work environment.

Rapid growth can be exciting, but making it your primary business goal can be dangerous. If turning your small business into a billion-dollar enterprise is alluring, keep in mind that setting up your company for success will require more staff, resources, and systems, as well as a solid plan for managing your growth strategically.

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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.