7 Common Small Business Growth Mistakes and How To Avoid Them


Brendan Tuytel


Reviewed by


May 31, 2023

This article is Tax Professional approved


The time of growing a business is a period of excitement for entrepreneurs, but it comes with some common mistakes that we’ll help you avoid.

We know that growing a business comes with its own unique challenges, many of which you will face for the first time. The occasional mistake might happen as you learn what works and what doesn’t for your specific situation.

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There are some common mistakes that many businesses make when focusing on growth. We’ve compiled seven of them as well as easy fixes to avoid the same pitfalls of many entrepreneurs.

1. A lack of upfront prep work

There’s a lot of questions you should ask yourself before deciding how you’ll grow your small business. How will you handle increased demand? Do you have all the equipment you need? Will you be making a marketing push?

Your path to growth starts at point A and ends at point B. But there are many different paths to get there and no two small business journeys are the same.

Taking time to do some upfront preparation gives you a roadmap to plan your journey. It can involve market research, looking for leads, and forecasting. The preparations will vary based on the size and type of business.

The fix:

  • Talk with similarly experienced connections: Being self employed is a unique experience. The best people to consult with before committing to growth are people who have been through a similar journey. Look at LinkedIn, Facebook groups, or local organizations for people you can connect with and learn from.
  • Develop new processes: As you grow and demand increases, how you currently do things might not stand up to the volume. Look at your sales process, your project management, and fulfillment process to see where there’s room for improvement.
  • Do some early reach out: For contractors, do some reach out to potential leads to gauge their interest in your services. If you sell goods, some market research before expanding helps you decide the best plan of attack.

2. Chasing too many opportunities as a startup

A skill that pays dividends in a period of growth is prioritization.

For the sake of more sales, it’s tempting to treat every opportunity as equal. After all, sales are sales, right?

Saying yes to too many opportunities creates a capacity crunch and a need to produce quicker. It might even mean doing something outside of your usual operations as you add a new product or service that you foresee customers demanding.

Knowing what opportunities to chase ensures that your work is focused on what creates the best long-term value for your business. This shows up in your sales process, choosing what to invest in, and setting your priorities. Keep your scope narrow and you’ll bring your best self to a select few opportunities rather than not bringing enough to too many responsibilities.

The fix:

  • Document potential opportunities: Have you ever double booked yourself on a weekend? It’s a common mistake that comes from not documenting something. Your potential opportunities are the same—document your options so you know if you need to give something up to bring something on.
  • Set time aside for prioritization: Lots of early stage, growing businesses use the sprint framework to set priorities for a period of time. The purpose of this approach is to constantly evaluate work that can be done to tackle the most valuable tasks first.
  • Use an impact effort matrix: An impact effort matrix is a basic decision making tool that groups tasks by their impact and the work required to complete it. After grouping tasks, you’ll know what should have the greatest impact with the least effort.

3. No investment in your infrastructure

For businesses of all types and sizes, technology is changing the landscape of how work is done. Regardless of whether you’re planning on fast or gradual growth, investing into some new tools changes the scalability of your business.

Start to look at all the tasks you manage as the business owner. Are you capable of tackling the same tasks as the scope increases? And if not, what are some of the options to make it manageable?

The fix:

  • Brainstorm potential pain points: Maybe you’ve been in business for months, maybe years, but at some point you have thought “This is not the best use of my time.” There’s value in these gut instincts. Document what these pain points are because they’ll potentially get bigger as you grow.
  • Look into tech solutions: There’s no guarantee the answer lies in new technology, but it’s a great place to start. Research what affordable technology is available to you and what competitors are using to scale their operations. We’ll have more on what to do if the answer isn’t in tech later.
  • Do cost-benefit analysis to prioritize: New technology costs money. To maximize the return on your capital, create a wishlist of products you’re interested in and do a cost-benefit analysis for each. This ensures the best return on your dollar.

4. Frantically hiring employees

Some problems can only be tackled with proper people power. But hiring new employees takes time with a process that requires an attention to detail.

If you wait too long to hire employees, you risk rushing someone through the process. Or you could potentially not give the process the attention it deserves as you’re juggling many other things on your to-do list.

Can you afford to hire an employee? If so, it’s better to get ahead of the curve when hiring. Timing the hiring process right saves you from being overworked when things pick up.

The fix:

  • Establish a hiring process ahead of time: Beyond the actual interview process, there are employment forms you need to get familiar with. Even if you don’t anticipate hiring soon, getting this figured out early on saves you from a frantic hustle.
  • Do a cash flow analysis: A key part of hiring employees is understanding how much you have to spend on salaries and wages month to month. Look at your prior performance and potentially put together a forecast to estimate the available budget.
  • Choose roles and salary or wages: Once you have an estimated amount of available budget, it’s time to figure out where that’s best spent. Pick out some roles and look at what competitors offer for similar positions. Then it’s time to choose what your ideal team looks like and start the process.

5. Focusing on short-term solutions

The best kind of growth for a small business is sustainable growth. Short-term wins that cost you progress for your long-term goals will slow you down in the long run.

An example of this is choosing a marketing strategy. A short-term solution would be committing to spending digital advertising like Google Ads. However, you also need to have a lot of graphic assets to use on digital ads and not having enough could mean a low performing program.

When looking at the tasks you want to tackle, pay attention to whether you’re prioritizing a short-term solution. Investing in a long-term solution helps you grow sustainably and saves you stress.

The fix:

  • Create a list of solutions: Don’t be afraid to throw any idea out there. Create a list of options without holding something back as not doable until after you’ve critically looked at each.
  • Break down the short and long-term impacts: Jot down the potential short and long-term costs and benefits. For example, a contractor will provide work right away, but at a higher cost while an employee has more upfront cost, but operates better long-term.
  • Make an informed decision: Short-term solutions aren’t necessarily bad things. The point of this exercise isn’t to avoid all short-term solutions, but to understand what the trade-off is before you commit to a choice.

6. Not tracking your progress

It’s likely you’re going to try a lot of new things as you grow your operations. Some things will succeed, some will not. What’s important is that you’re measuring and reflecting on whether new strategies are effective.

If you’re going to make a change or take a new approach, have some metric that you track to prove it’s effective. Even something as simple as checking in on your orders in a new city you expanded into will give you some indicator of whether it was successful.

The fix:

  • Establish success criteria: Setting a goal tied to a metric makes it easy to stay on top of the impact of your choices. It’s the best way to have an “at a glance” way of checking in on your progress.
  • Commit to maintaining your reporting: Updating your reporting can feel tedious. If you’re struggling to work up the motivation, set aside time in your calendar or consider outsourcing certain responsibilities like bookkeeping to keep reports up-to-date.
  • Have a regular check-in cadence: Just as it’s important to set aside time to update your reporting, it’s even more important to spend time analyzing it. Catching something over or under performing lets you change your strategy to maximize gains.

7. Not developing a solid brand recognition

New brands have to put in the extra work to start being recognized by new customers. The most common strategy is to do some traditional marketing, but don’t let that thinking limit your approach.

Social media, in-person events, trade shows, and referrals are all examples of marketing that doesn’t require a full-on marketing team.

How you approach growing your brand ultimately depends on what you’re offering and who your prospective customer is. It’s essential you meet your audience where they’re most likely to see you.

The fix:

  • Define your audience: The number one thing you need to know to develop brand recognition is who your ideal audience is. Learn from your current customers and the people who have been most engaged with your goods or services.
  • Pick your channels: Once your audience is defined, it’s time to decide how you’ll reach them. Try to get as specific to your niche as possible. For example, don’t choose “social media,” but rather a specific platform like Instagram or TikTok to start.
  • Choose your messaging: What do you want your brand to be known for? Write a brand statement—similar to a one-liner pitch you’d use at a party. This statement will guide how you write about and present the brand in a public space.


The journey of growing a business is an exciting time. It’s an opportunity to deeper invest in a project and achieve its fullest potential.

It’s also a time when small business owners make mistakes that can set that growth trajectory back.

Be mindful of these seven common mistakes while growing your business. But also try to keep a circle of connections who are there to help out. Their input as a sounding board and their prior experiences might help you catch a potential mistake before it’s made.

With the right support and a little bit of preparation, you’ll set yourself up for growing your business successfully and sustainably.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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