What to Do When Your Small Business Grows Too Fast

June 14th, 2025

What business owner wouldn’t want the “problem” of growing too big, too fast?

Rapid growth is is a good thing. We’re not arguing that. But there are certain accompanying difficulties that you need to be aware of now…before you hit that growth spurt.

When your small business starts scaling faster than your operations can handle, it introduces a new set of challenges: stretched resources, inconsistent cash flow, staffing bottlenecks and breakdowns in systems that were never designed to support a much larger operation.

The good news? These problems are plenty manageable. The following are a few issues that might appear because of hyper-growth, and what steps you can take to mitigate them.

1. Cash Flow Gaps

Fast-growing businesses might be thriving on paper yet struggling with cash shortages in practice.

Why? As your orders and expenses balloon, your working capital often can’t keep up.

Cash flow management red flags tend to include accounts receivable increasing faster than your cash reserves, buying inventory or equipment without a firm timeline for getting a return on your investment, and paying vendors faster than customers are paying you.

What you can do to improve your cash flow management:

• Tighten your collections process. Follow up on unpaid invoices promptly and consider offering early payment discounts.
• Negotiate better terms with vendors. Extending payment windows can give you more breathing room.
• Establish a line of credit. A revolving line of credit with your bank can help bridge cash flow gaps in high-demand periods.
• Forecast proactively. Don’t rely on gut instinct — build cash flow projections based on historical and projected revenue, especially if you run a seasonal business.

2. Staffing Shortfalls

The lean team that helped get your business off the ground simply might not be able to keep up with its rapid acceleration. As demand increases, your existing employees might be asked to juggle too many roles, risking burnout and costly mistakes. Meanwhile, your ability to hire, train and manage people might not be keeping pace.

You might notice projects being delayed or rushed, employees operating well outside their expertise or yourself spending more time firefighting than actually leading the business.

What you can do to strengthen your workforce during hyper-growth:

• Prioritize key hires. Focus on roles that will bring the biggest impact, such as salespeople, project managers and operations leads.
• Outsource where it makes sense. Offload time-consuming functions like accounting, IT or payroll to outside specialists.
• Build a repeatable onboarding process. Don’t reinvent the wheel with every new hire! Document training steps and key workflows to quicken the onboarding process.
• Invest in your culture. It’s easy to focus on the most tangible needs, but don’t ignore the effect that growth can have on your original mission. As you grow, remember to reinforce values and communication to keep everyone aligned.

3. Ramshackle Infrastructure

Many small businesses run on duct-taped processes — spreadsheets, paper records, verbal approvals. That might have worked at $500,000 in annual revenue, but at $5 million, it can quickly become a liability.

You might find that your bookkeeping is falling behind, your CRM tools are unable to keep up with customer demands or your inventory management system is causing more confusion than clarity.

What you can do to support smart scaling:

• Standardize operations. Document repeatable processes to reduce errors and dependency on individual employees.
• Upgrade your tech stack. Choose software that supports various functions — finance, human relations and customer service, for instance.
• Consider ERP solutions. Enterprise resource planning (ERP) tools can unify operations under one digital roof (but they often require upfront investment and planning)

4. Supply Chain Disruptions

You’re selling more than ever — but that could put strain on your suppliers’ ability to keep up. And whether you’re a manufacturer, distributor or service provider, bottlenecks upstream can quickly erode customer trust and kill momentum.

If you’re running into backorders, delays or quality issues, it’s a sign that your supply chain may be straining under the weight of your growth.

What you can do to protect your operations:

• Communicate early and often. Keep suppliers in the loop about anticipated volume changes and long-term growth plans.
• Diversify your vendor base. Don’t rely too heavily on a single supplier for critical materials or services.
• Invest in inventory forecasting. Use historical sales data and market trends to anticipate spikes in demand.
• Build a buffer. If possible, carry safety stock to absorb sudden increases in demand or short-term disruptions.

5. A Suddenly Fuzzy Big Picture

When you’re buried in the day-to-day chaos of rapid growth, it’s easy to lose track of your long-term vision. Decisions get made reactively, and strategy falls by the wayside.

You might find yourself taking on business that doesn’t align with your core strengths, expanding too quickly into unfamiliar markets, or running without a clear roadmap.

What you can do to stay grounded:

• Revisit your business plan. Update your mission, goals and financial projections to reflect current realities.
• Monitor performance metrics. Track key performance indicators (KPIs) that align with sustainable growth — not just short-term wins.
• Stay connected to your customers. Gather feedback regularly to ensure your product or service is still delivering value.
• Lean on advisors. An outside perspective — from a consultant, coach or accountant — can help you make smarter, more objective decisions.

Growing Fast? That’s a Good Problem … If You’re Prepared

Every business wants to grow — but not every business is ready for what growth demands. The key to surviving and thriving through a period of hyper-growth is preparation, planning and the ability to adapt quickly when cracks begin to show.

McManamon & Co. is an accounting, tax, fraud, forensic and consulting firm that serves small and midsize businesses. Our experienced consulting team can help you manage the challenges that come with rapid growth, providing services such as strategic planning, proactive cash flow planning and more.

Call us at 440.892.8900 or contact us online today to learn how we can help your growing business stay grounded.

Tags:  accounting, consulting, financing, McManamon, McManamon & Co., payroll, record-keeping, small business, small business accounting, small business consulting, small business finances, small business financing, small business owner | Posted in Consulting, McManamon & Co., small business