Karl Hughes

Karl Hughes

Q&A: Common Mistakes Growing Small Business Owners Make

Q&A: Common Mistakes Growing Small Business Owners Make


What is a common mistake that small-business owners make when their businesses begin growing?


Here are four common mistakes I’ve seen founders make as their business starts to grow:

1. They hire too slowly

Small business owners who are used to stable, small teams don’t realize that during periods of explosive growth, they have to hire ahead of demand.

So, they get behind and hire too late. New hires always require more time at first, so the owner is now training a new employee while the business is growing and they get even further behind.

Clay Mosely once told me to hire based on where you want to be, not where you are.

2. Their costs rise non-linearly

A lot of founders who are used to doing everything themselves don’t realize that more growth means more hiring, which means more costs. Sometimes, a small business’s costs may rise non-linearly with growth.

This leads to the next problem…

3. They fail to optimize their prices

When a small business starts to grow unexpectedly, it might be a sign that prices are too low or too high.

If greater demand increases overhead, entrepreneurs need to raise prices accordingly.

Conversely, if greater demand helps you get lower costs, you might want to lower prices to outsell competitors who see your growth as a golden opportunity.

4. They don’t figure out why the growth happened

Finally, small business owners who hit an inflection point of serious growth should figure out why this growth suddenly happened. Uncontrolled growth is scary because it could go away tomorrow, but well-understood and controlled growth is how you build a sustainable, scalable business.

Interested in learning more about building a business? I’ve compiled some of my favorite books for startup founders here.

Read more like this in Startups