Most owners believe this – To grow to the next level, we need more people.
It sounds reasonable. It’s also why so many businesses stall between $5M and $20M.
They grow revenue — and quietly destroy the economics underneath it.
Revenue Is Easy to Add. Overhead Is Hard to Remove.
Let’s be precise. Revenue is optional. Overhead is sticky.
Once you add:
- salaried managers
- internal support roles
- fixed payroll commitments
- layered processes
those costs don’t scale down when demand softens. They sit there. Month after month.
This is why owners feel successful and trapped at the same time.
They grew — but now the business needs constant feeding just to stand still.
The Real Question Owners Should Be Asking
Not:
“How do we grow faster?”
But:
“What kind of growth does not permanently raise our cost base?”
That question changes everything.
Because sustainable scale is not about size. It’s about leverage.
A Simple Mental Model: Fixed vs Variable Everything
At this stage, the most important distinction in your business is this:
- What costs must exist every month
- What costs only exist because revenue exists
Healthy scale pushes costs toward the second category.
Unhealthy scale piles weight into the first.
Here are three leverage rules that consistently separate businesses that scale cleanly from those that don’t.
Rule #1: Add Throughput Before Headcount
Most teams are under-leveraged before they are under-staffed.
Common symptoms:
- Work moves slowly because of approvals, not effort
- Bottlenecks sit with one or two decision-makers
- Customers wait because handoffs are unclear
Hiring into that system doesn’t fix it. It just adds expense to dysfunction.
Before adding people, owners should ask:
- What work is stuck, and why?
- Where does decision latency exist?
- What steps add no customer value?
Often, one process change releases the capacity of two hires.
That’s not theory. It’s math.
Rule #2: Push Costs as Close to Revenue as Possible
The safest form of scale is when costs rise because revenue rises.
Examples:
- Contractors instead of full-time staff
- Profit-sharing instead of fixed bonuses
- Capacity-based fees instead of salaries
- Outsourced functions with clear deliverables
This doesn’t mean avoiding employees. It means being intentional about when costs become permanent.
If revenue drops, variable structures protect margin. Fixed ones don’t.
Rule #3: Scale What Is Already Working — Not What’s New
Owners often try to grow by adding complexity:
- new offerings
- new markets
- new customer types
That almost always increases overhead. Cleaner growth comes from deepening what already works:
- higher transaction values
- better pricing discipline
- tighter delivery systems
- fewer exceptions
These improvements increase profit without increasing headcount. They also make the business calmer to run — which matters more than people admit.
The Cost of Getting This Wrong
When overhead grows faster than revenue:
- pricing flexibility disappears
- owners lose optionality
- stress rises even when sales are up
- the business becomes fragile
That’s why so many owners say:
“We’re bigger, but it feels worse.”
They’re not imagining it.
In Closing
The next level of growth does not require a heavier business. It requires a smarter one.
Scale that lasts comes from:
- delaying fixed costs
- tightening systems
- aligning cost with revenue
- and saying no more often than feels comfortable
The goal isn’t to build the biggest company possible.
It’s to build one that grows — without owning you in return.
Thanks for reading…