Growth is often the dream for a small business owner. In fact, it’s probably the most common reason clients start coaching with us at Entrepreneurial Business School. More customers, more revenue, more profit, more impact.
But what often gets lost in the celebration, excitement and challenge is the cost of growth, not just financially, but operationally, emotionally, and culturally.
One of the most overlooked challenges in growing a small business is what we like to call growth lag.
What is Growth Lag?
Growth lag is the gap that forms when your business takes off, but your systems, team structure, recruitment, technology, and internal processes haven’t quite caught up. You’re suddenly bigger, busier, and bolder but still operating like a smaller version of yourself.
It’s that awkward in-between stage where:
- You need new roles filled, but your recruitment process is in lag and you’re chasing your tail trying to find the right candidates.
- Your systems are bursting at the seams, but upgrading them would mean taking resources away from something else, not to mention the time required to plan and implement properly.
- Your team is feeling the Everyone’s flat out, but there’s no time to slow down and catch a breath, because the next project needs to be delivered, the next shipment dispatched, or the next customer impressed.
This lag creates tension not just for you as the owner, but for your team as well.
“While the pressures and stresses might be different, your team will be impacted by growth lag — and the best owners and leaders acknowledge and support those challenges.”
The Reinvestment Tightrope
Most small businesses grow by reinvesting profits — dollar by dollar, decision by decision. Every upgrade, every hire, every new initiative comes at the expense of something else.
This is the tightrope walk:
- Do we hire the marketing coordinator now, or upgrade our CRM software?
- Do we move into a bigger space, or invest in training the team we already have?
- Do we take on more clients, or pause to fix the leaky processes behind the scenes?
There’s never a perfect answer, only trade-offs. And as the owner, you carry the weight of those decisions daily.
What Often Gets Missed? Communication
One of the biggest traps in this phase is not communicating what’s going on to your team. Because while you’re juggling ten priorities and stretching every dollar, your team only sees the symptoms:
- Clunky systems that make their jobs
- Gaps in leadership or
- Delays in decisions or
- Rising workloads without the extra help they
It’s easy for them to feel frustrated or undervalued not realising the broader balancing act happening behind the scenes.
Bring Your Team Along for the Ride
Here’s the key: be vulnerable and communicate the reality.
Be honest that things aren’t perfect. Let them know you see the gaps too. Share the “why” behind your priorities and invite them into the problem-solving process.
- Let them know you’re investing with
- Ask for their input on what’s slowing them
- Share your roadmap — even if it’s rough — and help them see where the business is
That kind of transparency builds trust. It reminds the team that they’re not working in chaos, they’re working through it, with you.
Even the Most Successful Businesses Walk the Same Tightrope
We see growth lag in so many of our client businesses.
One business owner we’re particularly close too went on a 25-year growth journey — starting as a one-man band and eventually employing over 150 people, with offices in multiple countries.
Their story is a classic Australian small business success story: excellent profitability, reinvestment in the business, and eventually, a successful exit.
But even they admitted that throughout those 25 years, growth lag never disappeared. It just changed shape. Every three to six months, something felt broken — a system, a process, a piece of tech, a leadership layer. Something always needed fixing or upgrading to keep pace with the growth.
They did a phenomenal job navigating those challenges, but the lesson was clear: even great businesses feel stretched. Even the best leaders don’t have it all figured out. Growth doesn’t eliminate pressure — it evolves it.
Growth Lag is Normal — Even at the Top
The only constant in a growing business is change. And it’s important to remember: even the biggest, brightest businesses — the big brands we all know and admire — face these same challenges.
Whether it’s a tech giant from Silicon Valley or a legacy company that’s been around for decades, the people who’ve worked inside these organisations will tell you: growth lag is real
there too. The budgets may be bigger, but the growing pains are just as present. Systems fall behind. Priorities shift. Frustrations surface.
From the outside, these businesses might look polished and perfect. But behind the scenes, they’re just as human as the rest of us — constantly iterating, constantly fixing, constantly trying to keep up with their own momentum. The struggle is shared.
And that should be reassuring: whether you’re leading a team of five or five hundred, you’re not alone in the challenges you face.
The Bottom Line: Growth Doesn’t Mean Smooth
If you’re feeling the strain of growth, you’re not alone. It’s more than okay to not be perfect and it doesn’t mean you’re doing anything wrong.
“Growth lag is part of the journey, not a sign of failure, but a sign of progress.”
The key is awareness. Know it’s coming. Talk about it with your team. Get creative together.
Growth is hard. But when you bring your team with you when they feel heard, empowered, and involved you’re not just building a bigger business.
You’re building a stronger team and culture along the way. And when the whole team is pulling in the same direction and truly understands the journey, not only does success become more achievable, the ride becomes a whole lot more enjoyable too.
Cheers
Darren
