5 Scaling Errors Entrepreneurs Should Avoid While a strong drive to succeed is exactly what an entrepreneur needs, it can also be your downfall if you fail to recognize the problems that this mindset can lead to. Here are five reasons why scaling too fast can be a huge mistake.

By Max Azarov

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Entrepreneurs are known for their ability to think big, their appetite for risk, the fact that they can spot opportunities and their decision-making skills. These characteristics can often make you feel as if you need to do as much as possible, as fast as possible, to grow your business. While this drive to succeed is exactly what is needed to be an entrepreneur, it can also be your downfall if you fail to recognize the problems that this mindset can lead to.

With this in mind, here's why scaling too quickly is one of the biggest mistakes business owners make:

1. Overlooking critical problems the company currently faces

It's true that minor personnel problems or morale issues may not stall your growth, but it's a mistake to overlook these things instead of considering them as red flags. Yes, one person's performance usually won't make or break your business — but if left unchecked, it will eventually cascade into entire departments or teams who lack efficiency, leading to more complex challenges. Pay attention to all problems before you even think of expanding. Your house should be in order before you start chasing expansion.

Related: 4 Keys to Grow and Scale Your Startup

2. Not assessing internal investment risks

Another mistake I have seen evidence of is entrepreneurs taking a "winging it" approach to growth costs. They become so focused on expanding that they underestimate the costs of growth. This is a massive error when you're operating on an investment model.

Instead, think logically and crunch the numbers for everything that expansion entails, including onboarding new staff, salaries, office costs, new software, etc., and then add 20% to that number for incidental costs.

Can you weather that number and remain successful? If not, then it's not yet worth the risk.

3. Disregarding what your competitors are doing

It's a grave mistake to become so focused on scaling that you're blinded to your competitors' actions. Have you considered what your competitors' growth strategy is? When your competitors decide to expand, which markets are they likely to target? How does this affect your business now and in the future? How viable is growth in your industry?

You must expect that you and your competition will likely be fighting for the same share of the market in terms of demographics and profit. This doesn't mean you should rush to overtake the market — it means that you should take time to study your competition to develop an airtight strategy for sustainable growth when the time comes.

Related: How to Scale Your Business Sustainably

4. Not defining the company's immediate mission and goals

You can't succeed with a nebulous mission statement. Make your goals as specific and as measurable as possible. It's essential to align your growth strategy with your goals. In essence, you need both a "why" and a "how" before you can start effectively scaling.

As an example, if Novakid's mission is "to create the most convenient way possible for children to learn English," then the company's focus should be primarily on improving the quality of our product using customer feedback and new technologies. It doesn't make sense to immediately start looking for ways to expand your target audience and customer pool until that has been achieved.

However, if our mission is "to provide English learning for children around the world," then our primary focus should be on how we can expand the business first and then devote our resources to refining our product.

Essentially, it's critical to match your scaling strategy with your immediate goals.

5. Forgetting that business growth can be done sustainably

Aggressive growth is something that investors are typically excited to see, but it doesn't mean that it is the best approach from a long-term perspective.

In the early stages of a business, it's common to want to push and expand as quickly as possible, but growing too fast without a solid foundation is a recipe for disaster.

Instead of funnelling the majority of your energy and resources into marketing and sales to facilitate rapid growth, it's better to slow down. Set realistic goals, temporarily rein in your ambitions and understand that a slow and steady pace is better. Investors will appreciate the restraint in your approach, and your business will be in a better position to grow.

Growth is important, but it's not the only marker of a successful venture. Avoid a scaling crisis by getting your proverbial house in order, developing sound strategies for succeeding in your market, and, above all, moving forward with unwavering purpose regardless of what everyone else is doing.

If you can keep your drive and ambition from becoming a liability, you'll experience the kind of long-term growth most entrepreneurs can only dream about.

Related: This 3-Pronged Approach Will Help You Scale Your Business to New Heights

Max Azarov

Entrepreneur Leadership Network® Contributor

CEO & Co-founder of Novakid

Max Azarov is the co-founder and CEO of Novakid, an online AI-platform that provides personalized English learning for kids ages 4-12 through gamification. He is a serial entrepreneur with successful cloud-related ventures. He's held positions at LG Electronics, Google, Cyber Vision and Digital 5.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Science & Technology

These Are the Top 6 AI Threats to Your Business Right Now

The modern workforce is forever changed by artificial intelligence. If you fail to understand that we will all need to learn AI to some degree, you haven't been paying attention.

Business News

Here Are 3 Strategies Startup Founders Can Use to Approach High-Impact Disputes

The $7 billion "buy now, pay later" startup Klarna recently faced a public board spat. Here are three strategies to approach conflict within a business.

Business News

I Tested the 'Invest As You Shop' App to See If It Really Makes Investing Less Intimidating

Grifin is an app that tailors a user's investments to their spending habits. Now, the app is getting even more personal.

Business Ideas

55 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Vice Will No Longer Publish Content on Its Website, Lays Off Hundreds of Staffers

Vice Media CEO Bruce Dixon announced the news in an internal memo to employees on Thursday.

Business News

'This Can't Be True': Google Responds to Viral Hoax Claiming the Company Is Shutting Down Gmail

The fake news release started making its way around X on Thursday.