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9 Barriers to Small Business Growth and How to Break Through Them

Have you ever wondered why some corporations thrive while others struggle? Knowing the typical hindrances interrupting the organisation’s growth is crucial for a company owner.   Startups are the backbone of the economy of a country. They provide employment opportunities, contribute to the Gross Domestic Product (GDP), and bring innovation to various sectors. However, small businesses often face numerous hurdles. These barriers can range from financial issues to leadership problems and can significantly impact the business’ success. This blog will discuss nine common obstacles and solutions to helping small businesses grow.   Here are the nine common barriers faced by small businesses:  

1. Ignoring Business Indicators

  One of the biggest barriers for entrepreneurs is ignoring key business indicators. These indicators could include financial metrics such as revenue, profit, and cash flow, as well as non-financial metrics like customer satisfaction and employee engagement. By ignoring these signals, small business owners may not realise that their business is facing challenges or opportunities for growth. To break through this barrier, small business owners should regularly track and analyse key business indicators and use this information to make informed decisions about the direction of the business.  

2. Overlooking the Competition

  Another common business barrier is failing to pay attention to the competition. With the increase of the internet and e-commerce, startups face more competition than ever. By overlooking the competition, business owners may not realise their competitors’ impact on their organisation. To overcome this problem, entrepreneurs should regularly research their opponents, analyse their strengths and weaknesses, and identify opportunities for differentiation.  

3. Cash Flow Problems

  Cash flow is crucial for SMEs, as it determines their ability to pay bills, invest in growth, and stay afloat during tough times. These problems can arise for various reasons, such as slow payment from clients, unexpected expenses, or a lack of proper financial planning. Firms must fight their way and focus on improving their cash flow management by streamlining their invoicing and collection processes, reducing unnecessary expenses, and seeking financing options when needed.  

4. Too Many Managers

  Too many managers can hamper company growth, leading to confusion, bureaucracy, and accountability. It can be especially true in small businesses where roles and responsibilities may not be clearly defined. To break through this fence, firm owners should streamline their management structure, clearly define roles and responsibilities, and encourage open communication and collaboration among team members.  

5. No Innovation

  Innovation is another business barrier that impacts an enterprise’s stand among its competitors. Companies must stay relevant and competitive in today’s fast-paced business environment. Small businesses may compete to differentiate themselves from competitors and attract new customers without innovation. To conquer this subject, entrepreneurs should encourage innovation within their organisations and allocate resources towards research and development.  

6. Risk-Taking

  Organisations often face risks, such as market uncertainties, competition, and financial challenges. However, failing to take calculated risks can also hinder growth. To break through this barrier, small business owners should carefully evaluate potential risks and rewards and make informed decisions about which risks to take. It can involve creating a risk management plan, which outlines the steps to be taken in case a risk materialises and identifies potential opportunities for growth and development.  

7. Single Client Dependency

  Dependency on a single client can be a major barrier to corporation growth, making the business vulnerable to losing that client. To break through this wall, owners should diversify their client base and strive to build relationships with multiple clients. It can involve expanding into new markets, offering a wider range of products or services, and building a strong online presence to attract new customers.  

8. Poor Leadership

  Leadership can be a major barrier to business growth, leading to a lack of vision, better decision-making, and low employee morale. To address this, company owners should improve their leadership skills and seek guidance and support from mentors or leadership development programs. It can involve setting clear goals and expectations for the business, communicating openly and transparently with employees, and fostering a positive work culture.  

9. Insufficient Capacity

  Insufficient capacity can delay startup growth, limiting the business’s ability to take on new projects or expand into new markets. To break through this barrier, small business owners should identify areas where they lack capacity and take steps to address them. It can involve hiring additional staff, outsourcing certain tasks, or investing in new equipment or technology to increase efficiency and productivity.     Conclusion   Small and Medium Enterprises (SMEs) face numerous obstacles when growing, and overcoming these challenges can be daunting. However, by identifying the barriers to business growth and taking steps to address them, small business owners can break through them and pave the way for sustainable development and success.   Wadhwani Advantage aims to guide SMEs to overcome common barriers to growth and establish a profitable business. Our Programs such as the SME growth Seminars and SME growth Bootcamps give access to training and capacity-building opportunities to help small firms to grow and succeed. Entrepreneurs can interact with a network of mentors and industry experts who can provide guidance and support in navigating the challenges of starting and growing a business. Contact us today to learn more about the different programs Wadhwani Advantage offers and build your enterprise.


The ‘no fees, no equity’ Wadhwani Advantage program has a repository of business advisors, SME consultants and mentors, and curated experts who add great value to businesses. These are domain experts who have successfully transformed businesses. You can avail of their services by applying to the Wadhwani Advantage program, which builds capacity to accelerate the revenue of businesses by 2x to 10x. (Businesses with INR 25 Cr+ revenue and employee strength ≥ 100, intent to grow 10x and a commitment to learn can apply)

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