Growing a business & breaking the barriers: what SMEs need to grow beyond each stage
Growing a business is never linear. For SMEs, each stage of growth brings new challenges that demand different mindsets, systems, and support. I have worked with thousands of SMEs over the years and recognise the changing challenges that they have, as they go from one size to another. The key as a business leader is to recognise these changing challenges and set your stall out (plan and strategise) accordingly.
Here’s a breakdown of the typical hurdles that SMEs face as they move from startup to scale-up, and the support they need to break through each barrier.
1. The £250k barrier – from hustle to structure
At this stage, most businesses are founder-led, relying heavily on personal networks, sweat equity, and a small team. They can often be lifestyle businesses and that’s fine but some have greater aspirations. Cashflow is often tight, and the owner wears multiple hats. The key challenges are time, delegation, and process.
What’s needed:
- Basic systems: for finance, CRM, and project management – a focus on what is and isn’t working
- Time management: support and clarity around high-value tasks – working on, not in the business
- Early team development: hiring your first few team members well – allowing you to work on the business and start to have a lifestyle
- External advice: from mentors or advisors to build confidence and avoid tunnel vision – you don’t know what you don’t know
2. The £250k – £1m barrier – building a team, not just a business
Crossing this threshold requires the owner to shift from “doer” to “leader.” The business now has a position in the market, good clients, products, and a team, but growing pains set in. It’s becoming a good business with huge potential but the pressure increases. Decision-making bottlenecks, inconsistent delivery, and cultural challenges can start to arise.
What’s needed:
- Defined roles and responsibilities: to reduce dependency on the founder – delegate and hold your team to account
- Leadership development: for key staff – when the team grows, the business growth follows
- More formal processes and KPIs: to ensure consistent delivery internally and externally – building a solid reputation
- Financial planning: understanding margins, pricing, and cash flow in detail – number are more critical than ever
- Peer support: through networks or masterminds to learn from others scaling at pace – it’s lonely so have a team to discuss your challenges with
3. The £1m – £3m+ barrier – systemising for scale
At this level, growth is no longer about selling more, it’s about scaling effectively without breaking. Complexity increases, layers of management start to emerge, and the culture can start to fray. Founders can feel disconnected or overwhelmed and are still not letting go.
What’s needed:
- Senior leadership: hiring or promoting management talent – build a team that runs the business day to day
- Robust operational systems: across all departments – this delivers efficiency, profitability and high service levels
- Strategic planning: to align team goals with long-term vision – ensures laser focus
- Investment in culture: to retain talent and reinforce values – ensure the team are value aligned and are all pulling in the same direction
- Governance structures: such as a board or non-execs, to challenge and support – allows you to step away and have the freedom you desire
These are generalisms rather than being hard and fast, and apply to pretty much businesses in any sector. Those that succeed through each barrier are where the business model, the offering, the team and the leader all adapt as needed to meet the changing needs of the business and the market they serve.
Each growth barrier is both a challenge and an opportunity. Recognising when you’ve hit a ceiling and getting the right support to break through is often what separates stagnating businesses from those that scale sustainably.
Anything is possible if you have the vision, the leadership skills and team around you to unlock your potential.
What barriers to growth have you witnessed?
If you are looking for a sounding board to help you challenge the status quo or need help developing a plan to help navigate your next steps proactively, it’s time to chat.
