What Are the Biggest Challenges Businesses Face When Scaling Up?

Scaling a business is fraught with complexities, and CEOs and founders often face unique hurdles in this transformative phase. From maintaining a clear vision to planning for sustainable growth and value, we've distilled the wisdom of 23 industry leaders. Here's a deep dive into the biggest challenges of scaling up, as experienced by those at the helm of growing companies.

Maintain a Clear Vision When Scaling

When you scale, having a very clear vision of what you want to be, as well as what you don't want to do, is critical. I made the mistake of having too broad a focus and trying to be everything to everyone, so myself and our team were spread thin across different types of clients and projects, which made it hard to scale. It's better to be the best in the world at one or two things versus being okay at ten.

Jake Dunlap, CEO, Skaled

Access Capital and Mentorship for Female CEOs

For Gen Z women eager to run their own businesses, access to capital and a good mentor or coach can impede their growth.

The old boys' network makes it almost impossible for women-led companies to raise the funds needed to scale. But research shows they'll have a greater chance with a male co-founder.

And my own experience of "going it alone" when I started my first company in Silicon Valley (as Founder & CEO of Women's Financial Network) led me to do a complete re-think and write a book on that very topic.

Companies don't scale when the CEO is carrying all the burden. You need good people around you, including a seasoned mentor or coach, especially in the early days. That's why GWI has created a fully free program to help young women find that "someone" who can help them grow.

Jennifer Openshaw, CEO, Girls With Impact

Implement Effective Hiring Systems

Hiring well is one of the biggest challenges businesses struggle with as they scale. It's easy to want to be like companies we admire or to use our competitors as the gold standard.

Early on in my career, I was promoted way too early. I used my competition as a hiring benchmark and target to recruit from. It sounded like such a great idea and was common advice I was receiving. The problem? They took a completely different approach to their business. While the titles were the same, the work couldn't have been more different. And I spent more time, money, and energy cleaning up after the wrong hires were made.

The stories we tell ourselves, especially when needing to hire people to grow our businesses, aren't always rooted in reality. Taking the time upfront to understand what we need, how we'll get there, and why, with a hiring system in place, is where we make the challenge of hiring well to defy costly turnover odds easier.

Amy Volas, Founder & CEO, Avenue Talent Partners

Delegate Tasks to Focus on Growth

Know when to stop doing it all yourself and to hire help. Whether it's an intern, VA, or full-time hire, outsourcing can free up your time so you can focus on revenue-generating activities instead of task work.

Brenda Meller, Chief Engagement Officer & LinkedIn Coach, Meller Marketing

Manage Third-Party Dependencies During Scale

One of our challenges in the beginning was getting approval for our custom client apps when we were hosting our first event-technology apps. Back in 2016, Apple issued a wide company block on any app companies publishing apps on their App Store account on behalf of clients. We had around 80 apps published at that time, and they all got blocked on the same day. Clients were desperate. We had to request an extension from Apple and open new App Store accounts for all the clients over the next week. Scaling is hard when you depend on a third-party partner in any industry.

Pedro Goes, CEO, InEvent

Distinguish Growth Levers from Distractions

There are a million different things you could do to grow a business. As a small company with a small team, you can only do so many things at once. You need to pick the right horses if you want to scale up. Then you need to execute those priorities in the right order.

All too often, business owners get distracted by shiny objects and charlatans that just lead their business down dead ends.

One of the biggest challenges business owners face is differentiating between a shiny object versus an actual growth lever for their business.

Once you can differentiate those clearly, you can unlock your business's next level of scale.

Andrew Pfund, Growth Marketer, Scale and Prosper

Prioritize Customer Experience During Scale-Up

One of the biggest challenges businesses face when scaling up is continuing to provide the same level of customer experience to their customers. This one is so important, and businesses often miss it because of the focus on sales, marketing, and/or operations. Don't get me wrong, these are all very important when scaling; however, what happens when all of those channels and departments are tweaked and the customer is not top of mind? The customer's experience will not be the same, and that is a big problem for your business because it will not only impact retention, it will hurt your bottom line.

Let's say you tweak how the customers sign up by creating a great digital tool and adding questions that are relevant to making the employees' work faster and more manageable. Great! Now enters the customer who fills out the sign-up form, which is now three times longer, there is no progress bar to show how long it is, and they have to stop multiple times to grab information that is not readily available and was not told upfront was needed. Frustration.

While scaling is an exciting time in any business, always put customers front and center. Every department, be it marketing, sales, operations, or another, needs to take a step back and consider what this means for your customers. Jeff Bezos from Amazon always leaves a seat open in their conference room to represent the customer. Anytime they go to do something, change something, or create something, they turn to the 'customer' in the chair.

Now, go grab your chair and make great things happen that your customers will love.

Julie Diekman, CEO, Limitless Ideation

Preserve Brand Authenticity Amidst Growth

One of the biggest challenges businesses face when scaling up is maintaining the authenticity of their personal brand. As growth accelerates, there's a risk of diluting the brand's original voice and values in the pursuit of rapid expansion.

In my own journey, I found that as our team grew and processes became more complex, it was easy to lose sight of the brand's core identity. To counter this, we developed a strong brand guideline that emphasized our unique story and values. We also consistently engaged with our audience to ensure that our communication remained authentic and relatable.

Maintaining that personal touch amidst growth is crucial. It helps customers feel connected to your brand and ensures that your message remains consistent, regardless of size.

Ana Maria Bubolea, Founder, Brand Strategist, Buzzworthy Brands

Navigate Decision-Making Without a Playbook

The biggest challenge for me, and I'm certain for a lot of entrepreneurs when scaling up, is that there is no book, no manual, and no instructions.

You are on your own.

You can have advisors and talk to friends who have done it before (successfully and unsuccessfully), but in the end, you have to do it yourself. You have to make the decisions on where and how to invest in growth. Whom to hire. Whom to fire. Where to add services. How to increase fees. The list of impending decisions is endless.

The challenge is not just making those decisions, but believing in yourself to make those decisions because every decision affects more than just you as the boss and entrepreneur. It affects employees, clients, partners, and the people in each of their lives, as well as your own.

Scaling up is taking an intentional leap, with confidence in yourself that you'll make the necessary decisions to grow.

David Barkoe, Chief Executive Officer, Carve Communications

Establish Processes for Scaling Operations

One of the biggest challenges businesses face when scaling up is a lack of processes. As a startup, you have so much on your plate that SOPs or automations are at the bottom of the priority list. Once you scale, you realize that your product sells well, but now the task is to 10X it, and you are not sure how, as you never documented what got you to 1X. At this point, you need to rethink your operational model and optimize it for scale.

Anna Khomenko, Founder, Startup Dials

Overcome Capital Access Barriers for Expansion

I believe lack of access to capital is one of the main barriers to expansion for a startup. It makes it more difficult to seize opportunities. Historically, lack of capital in this space has disproportionately affected women and people of color.

I had been adversely affected by this in a previous startup I founded in the mid-2000s. I had developed and launched an organic cleaning product line and had placement in many major retailers with very positive results. I had received an order from a very large and well-known retailer. I needed to invest in inventory to be able to scale for replenishment during the year for this retailer, as well as support the marketing expenditure that was a requirement to participate. Looking for financing at the time was a very tricky endeavor, equivalent to trying to enter a private club. Unfortunately, I could not gain entrance to this club at the time and ended up closing the business.

This experience taught me some very valuable lessons that I have carried with me to my subsequent startups. I am very happy to see the societal changes that have accelerated access to capital for all different types of entrepreneurs and have allowed them to pursue their dreams.

Lori Fields, Founder, Director of Ecommerce, Amazon Strategist, Jay Street Partners

Transition from Solopreneur to Agency Leader

One of the biggest challenges I faced when scaling up was transitioning from a solopreneur or consultant into a full-fledged agency with a team. As a sales consultant turned agency operator, I've experienced this firsthand. Initially, the control and direct client interaction was manageable and rewarding.

However, as demand grows, delegating and trusting a team becomes crucial. This shift requires effective systems, clear communication, and a shift in mindset from doing everything yourself to empowering others. While the transition was challenging at first, I soon realized that relying on my team enhanced our efficiency and allowed us to achieve things I couldn't have managed on my own.

Implementing scalable processes was the next step that helped me achieve sustainable growth. When working solo, processes and standard operating procedures (SOPs) might seem less critical, but they become indispensable with a team. Clear and consistent processes ensure that the quality of work remains high as you scale, maintaining the standards your clients expect and facilitating smoother operations across your growing service-based business.

Reed Daniels, Owner, Rail Trip Strategies

Ensure Quality Care in Scaling Call Centers

In the context of scaling up a mental health treatment center's call center, one of the biggest challenges we face is maintaining the quality of care while managing an increasing volume of client interactions. As we expand, ensuring that each client receives personalized, empathetic, and effective support becomes more complex. We have to continuously train our staff not only on operational procedures but also on sensitivity and specific mental health issues to uphold our standards of care. Balancing the growth in quantity without compromising the quality of our interactions is critical, as it directly impacts the efficacy of the support we provide to those in need.

Mark W Lamplugh Jr, Chief Executive Officer, South Jersey Treatment Management Company

Learn to Say No for Sustainable Growth

As a serial entrepreneur, I've scaled multiple businesses, each with its own set of issues. That said, one challenge that is shared by each and everyone is knowing when to say a hard no. When your business takes off, it's hard to turn down work. Early in my entrepreneurial journey, it was less easy to distinguish between what we could do and what we should do. In reality, you need to learn to scale at a pace that suits your business and not the market.

As a start-up, you need to define your perfect customer rather than marketing broadly. From experience, I've learned that targeting your ideal customer sets your business up for long-term success.

Boris Markovich, Co-Founder, Ayrshare

Transition from Founder to Manager for Scale

As a venture capitalist, I've worked with around 60 startups. Most of the time, I see founders struggle when their team size goes from 10 to 50 employees. Why? The entrepreneurial leadership it takes to launch a company is quite different from the management leadership needed to scale one. To make the transition, you need the founder to embrace becoming a strong manager. Executive coaches can be useful in providing feedback. There are also several good leadership and management workshops that can have an impact—especially those that capture 360-degree feedback as part of their programs.

Rob Weber, Managing Partner, Great North Ventures

Manage Cash Flow for Scaling Success

Cash flow is always the biggest issue as you scale up. As you scale up, your costs begin to rise rapidly and tend to outpace the rate at which new revenue is coming in. Being able to forecast properly, having an open line of credit, or plenty of cash in the bank can help a company weather the storm.

Marshall Nyman, Founder & CEO, NYMO & Co.

Balance Enthusiasm with Strategic Decision-Making

The biggest challenge for me has always been slowing down. I am a balls-to-the-wall type of person, and when I have an idea or establish a goal, I get started immediately. As a new entrepreneur, I had more ideas than experience. The mistakes I made were often because I moved too fast and didn't go through the 'what could go wrong?' exercise that's now more ingrained in my process. I also currently have an incredible colleague, Maddie Fuehr, who is always a sounding board with a thoughtful perspective. Working through ideas with her certainly helps me make more thoughtful, strategic moves on a micro and macro level. Importantly, I'm grateful for my internal drive and enthusiasm - it has shaped the arc of my career - and I now appreciate how to balance that with the right analysis before making decisions.

Katharine Earnhardt, Founder, Mason Lane Art Advisory

Navigate Human Dynamics and Cultural Shifts

One of the most formidable challenges businesses encounter when scaling up is navigating the intricacies of human dynamics. Around 65-70% of startups fail within their first decade, and most of these failures are traced back to people issues. While the temptation of expansion often revolves around refining products or services or accessing new markets, it is ultimately the culture you build while managing people that determines success or failure. Founders and CEOs with initial success may find themselves confronting the transition from entrepreneurial hustle to structured leadership. This shift demands not just competent managers but individuals who are adept at fostering a culture of collaboration, innovation, and resilience. Many businesses falter not due to shortcomings in their offerings or market conditions but rather due to internal discord, leadership gaps, or a failure to cultivate a cohesive organizational ethos.

As businesses venture into new territories, the need to tailor branding and messaging to resonate with diverse market nuances becomes paramount. Additionally, prioritizing the recruitment of managers and team members with both domain expertise and cultural acumen is crucial for organizational agility and adaptability. These individuals not only drive performance excellence within their respective teams but also serve as invaluable conduits for navigating the intricacies of new markets.

One of my key learnings over the years in terms of scaling businesses is the importance of staying continuously aligned with the organization's values, purpose, vision, and business principles. It is equally important to take people along the journey and ensure that their contribution is valued and rewarded. This makes them more invested in the process and feel that they have skin in the game. Finally, as scaling requires investments, it is imperative to monitor the ROI and have the ability to pivot as and when required.

Viswanath PS, MD & CEO, Randstad India, a talent company

Adjust Communication Channels for Company Growth

One of the biggest challenges businesses face when scaling up is adjusting the communication channels for disseminating information throughout the company as the organization changes in size. What works for a team of 5 people won't work for a team of 20 people, which similarly won't work for a team of 50, 100, or 500 people.

We faced this exact challenge when scaling up our health-tech startup over the past five to 10 years. When you're below a team size of 10 people, it's relatively straightforward for everybody in the business to know almost everything that is happening in product, sales, marketing, customer support, etc.

Once you reach 20+ people, this becomes more difficult, so you need new ways of disseminating important updates to people who might not get daily exposure to that information: end-of-week email updates, company all-hands sessions, team sync meetings, etc.

A 'test-and-learn' attitude serves well during these scale-up phases, and also speaking to other founders and CEOs/COOs who are at the next stage in organization size to understand what did and didn't work for them.

Mike Gibbs, Co-founder & COO, Second Nature

Prioritize Staffing for Operational Efficiency

As an Operations Leader, I have worked with companies that are in growth mode. As a company grows, its organizational structure needs to adapt, and the largest priority is adequate staffing. This involves very careful planning around talent acquisition practices to ensure business needs are met. As VP of Operations & HR at my organization, we have witnessed times when we landed new clients, but in order to sufficiently serve those clients and our existing ones, we needed valuable teams in place. Hiring the right individuals became a priority for the executive team.

Susan Sweenie, VP, Operations & HR, Mindfull Marketing

Maintain Culture Amid Rapid Company Growth

My biggest challenge during scaling was maintaining our unique company culture during a period of rapid, double-digit growth.

Our team had always been small, passionate, and close-knit. However, as we doubled in size year-over-year—and consequently in the number of full-time employees—many new people joined. This had a direct impact on the way we worked together. We transitioned from one team that included the entire company to multiple departments. This shift meant moving from personally managing everyone to documenting the company culture and values, and organizing and planning orientation and activities to ensure everyone was informed, remained engaged, and acted in accordance with our values.

While many found this transition exciting, we also lost top talent who preferred the appeal of a smaller-scale environment.

Deniz Alkaç, Executive Producer & Founder, 10/10

Hire Talent with Startup Mentality

One of the top challenges in scaling up is hiring the right talent that's right-sized for the stage of the company. A candidate for a public company may or may not be the right fit for a Series A startup. The ideal hire can scale up as a leader as the company scales up and provide strategic direction as well as tactical execution.

Nanxi Liu, CEO, Blaze

Plan for Sustainable Growth and Value

Businesses without a plan to drive sustainable growth always seem challenged by scaling up. After founding two startups, I can say that identifying the correct phase for a company to scale up is a challenge in itself. Many businesses scale too early to speed up development and revenue generation. The result?

The result is premature scaling that fails to provide the desired value to all stakeholders, including customers. As a co-founder of an AI-driven startup, I have always been conscious of scaling up and have done so with a growth plan that would add value to our development instead of depleting our financial resources.

Sourav Kar, Tech Lead, Wavel AI