I’ve noticed a concerning trend among entrepreneurs and business leaders today – an obsession with “scale” that often misses the point of sustainable business growth. After watching Robert Herjavec’s recent insights on business development, I’m convinced we need to rethink our approach to building companies.
When business owners fixate on scale too early, they risk allocating precious resources to infrastructure they don’t yet need. This premature scaling can be a fatal mistake for promising ventures.
What struck me about Herjavec’s perspective is how he frames the distinction between growth and scale. Even when his business was generating substantial revenue – $50 million, $100 million, $300 million – his team wasn’t obsessed with scale. Instead, they focused on methodical growth toward the next plateau.
The Plateau Principle
Business growth happens in stages, not in massive leaps. This “plateau principle” is something I’ve observed repeatedly in successful companies. Each new level brings:
- New operational challenges that weren’t visible from below
- Different customer expectations that require adaptation
- Resource allocation decisions that weren’t necessary at smaller sizes
- Leadership demands that often require personal growth
The mountain climbing analogy Herjavec uses perfectly captures this reality. You climb to what you think is the summit, only to discover more peaks in the distance. This is the entrepreneur’s journey – a series of achievements that reveal new challenges rather than a single scaling event.
The Resource Trap
My biggest concern with premature scaling is the misallocation of resources. Cash is the lifeblood of growing businesses, and diverting it to systems and infrastructure designed for a much larger operation can be fatal.
“My worry about scale is if you build scale and systems too quickly when you’re a small business, you’re gonna use resources like cash for something that may not happen for a long time.”
I’ve seen too many promising companies burn through capital building for a future that never arrives because they ran out of runway. The “fine balance” Herjavec mentions is crucial – you must build enough infrastructure to support current growth while preserving capital for the journey ahead.
Finding Your Next Plateau
Rather than obsessing over scale, I believe businesses should focus on identifying and reaching their next natural growth plateau. This approach offers several advantages:
- It creates achievable milestones that teams can rally around
- It allows for testing and refinement of business models at each stage
- It preserves capital for addressing the specific challenges of each level
- It builds organizational confidence through a series of wins
This plateau-based thinking doesn’t mean abandoning vision. You should absolutely have a long-term destination in mind. But the path to get there will involve multiple stages, each requiring different strategies and resources.
The next time you hear someone obsessing about “scale” in a young business, consider whether they’re putting the cart before the horse. True scale comes as the natural result of successfully navigating multiple growth plateaus, not as a shortcut to bypass them.
Business growth is ultimately about balance – between ambition and pragmatism, between investment and conservation, between the mountain you’re climbing and the range that lies beyond. Focus on reaching the next plateau with your resources intact, and you’ll be better positioned for the climbs that follow.
Frequently Asked Questions
Q: How do I know when my business is ready to focus on scaling?
Your business is ready to focus on scaling when you’ve established a repeatable, profitable business model that can handle increased volume without breaking. Look for signs like consistent revenue growth, stable operations, and customer acquisition systems that work reliably. Until then, focus on reaching your next growth plateau.
Q: What’s the difference between growth and scale in business terms?
Growth typically refers to increasing revenue while adding resources at a similar rate (like hiring more people as sales increase). Scaling means growing revenue without a proportional increase in resources. As Herjavec suggests, most businesses should focus on growth first, moving through plateaus, before attempting to build scaling systems.
Q: What are the risks of trying to scale too quickly?
Scaling too quickly often leads to cash flow problems, as you’re investing in infrastructure for a future size you haven’t reached. Other risks include decreased quality control, customer service failures, team burnout, and losing the culture that made your business successful. These issues can ultimately lead to business failure despite growing revenue.
Q: How can I identify the next growth plateau for my business?
Look at your industry benchmarks and the natural operational breakpoints where your current systems start to strain. For example, a service business might have plateaus at 10, 25, 50, and 100 employees, each requiring different management approaches. Revenue markers ($1M, $5M, $10M, etc.) often correlate with these organizational changes. Talk to peers who’ve grown past your current size to understand what challenges they faced.
