The five mistakes are these: treating more revenue as a better business, being too busy to do the work that would change anything, growing before the foundations can carry it, avoiding the conversations everybody knows are needed, and never developing the one person the business depends on most.
Growth means the business becomes more profitable and less dependent on you at the same time. A business that gets bigger while margin stays flat and you are needed more than ever has expanded without growing.
Mistake one: is more revenue an improvement?
If your margin has not moved, your systems have not scaled and you are working longer than before, more clients, staff and turnover have not improved the business.
A business doing £500,000 at a 12% net margin makes £60,000. Push it to £650,000 and if the margin drops to 8% because you took work at weaker prices and added a manager to cope, the profit is £52,000. The business has more turnover, more people and more risk, and £8,000 less profit.
Check two numbers before and after any growth push: profit per pound of revenue, and hours the business needs from you. If the first has not risen and the second has not fallen, the business has not grown. Our guide on improving margins is the practical follow-on.
Mistake two: are you too busy to do the work that matters?
Your time is the scarcest resource in the business, and much of it goes on delivery, admin and firefighting rather than on the decisions, relationships and improvements that would move things forward.
Busy work finishes: an invoice raised is done and an email answered is gone. Repricing your services, or having the conversation with the person who is not performing, stays unresolved, so attention goes to the work that can be closed and the week fills up.
Put forward work into the diary first, as a fixed appointment with a start and an end, and do not move it for something urgent. Two protected hours twice a week get more done than a full day a month that keeps being cancelled. Structuring your week covers the mechanics.
Mistake three: are the foundations ready for the growth you are chasing?
Build the foundations before you add demand.
- More clients before the delivery model is tight produces chaos, rework and the kind of quality slip that costs you the reputation the growth was built on.
- More staff before the management structure is clear produces dependency — more people all routing their decisions through you.
- More marketing before the offer is sharp produces the wrong enquiries, which consume time, convert badly and teach you nothing useful about your market.
Before any push, name the first thing that would break if volume doubled next month, and fix it before the volume arrives.
Mistake four: which conversation are you avoiding?
Common examples are poor performance left unaddressed, a price rise never put to a long-standing customer, and a person who is not right for the role but has been in it for years. Owners often know about these long before they act on them.
A customer billed £3,000 a month whose price has not moved in three years, in a market where your costs have risen, is a customer you are quietly subsidising; a 6% correction is £180 a month, £2,160 a year, from one conversation you have been postponing. Do the same arithmetic for each conversation you are avoiding.
A framework for the conversation, and the confidence to open it, are part of leadership coaching, and managing poor performance sets out how to run it without a row.
Mistake five: are you developing the person the business depends on most?
At £200,000 of turnover the business needs you to be excellent at the work. At £1m it needs you to be good at deciding, delegating, pricing and leading — and to have stopped doing quite a lot of the work. Those are different jobs.
Owners often keep running the playbook that worked and apply more effort to it. Build a habit of deliberate learning through reading, peer groups, coaching or external input, and start it now rather than waiting until there is time.
Which one is your constraint?
Several of the five may be present, but one is binding right now. Work on that one first.
- If revenue is rising and profit is not, start with mistake one. It is a pricing and margin problem.
- If profit is fine but you cannot see a way to take a fortnight off, start with mistake two, then three.
- If growth keeps producing chaos and complaints, it is mistake three.
- If there is a person or a price you have been thinking about for more than three months, it is mistake four.
- If the business has been at roughly the same size and shape for three years while you work as hard as ever, it is mistake five.
The binding constraint is often the one you are least comfortable dealing with. Business coaching works out which constraint is binding and what to do about it in the next ninety days, and a 90-day plan sets out the work.
What to do this week
- Write down your net profit as a percentage of revenue for the last two full years. If it has not improved, growth has not happened yet.
- Count the hours you worked last week and how many of them were forward work.
- Name the first thing that would break if volume doubled next month.
- List the conversations you have been avoiding and put a pound figure against each one.
- Pick the single binding constraint from the five and book one hour this week to work on nothing else.
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Frequently asked questions
How do I work out which of the five is my real constraint?
Use the symptoms rather than instinct. Revenue up and profit flat points to pricing and margin. Profit fine but no possibility of a fortnight away points to your own time and to dependency. Growth that keeps producing complaints points to foundations. Anything you have been thinking about for more than three months and not acted on is the avoided conversation. A business the same size and shape for three years, with the same effort going in, points at your own development. If two look equally likely, pick the one you least want to deal with.
Is it ever right to grow before the foundations are ready?
Sometimes, if you do three things. Name what you know is not ready. Decide in advance what you will do when it breaks. And set a date to fix it properly rather than leaving it to a quiet spell that never arrives. Taking a large opportunity before you are entirely ready is a normal commercial judgement. Without those three steps, the breakage arrives as a surprise and gets dealt with by whoever is nearest. Write the three answers down before you commit, and review them at the end of the first month.
Our revenue is up but profit is flat. Where do I look first?
Three places, in this order. First, price: check whether your rates have moved with your costs, and whether the newest work came in at weaker prices than the older work. Second, delivery: check whether the same job takes more hours than it used to, because scope creep is quiet and cumulative. Third, overhead: check what was added to cope with the extra volume and whether it is earning its keep. The first is faster to correct than the second. Compare each one with the same months last year.
How long does it take to fix one of these?
It depends which one. A pricing correction can show up in the next month, because it applies to new quotes immediately. Foundations — delivery systems, a clear management structure — take a quarter or two of steady work. An avoided conversation takes an hour, once you decide to have it. Your own development changes slowest and matters most, so start it first. Ninety days is the right unit for planning any of them. Write the expected timescale next to each repair before you start, so you can judge progress against it.