Don’t Let Growth Kill Your Business -Think: Cash, Capacity, Control

When an entrepreneur launches a new business, s/he imagines growth to be natural and logical—almost inevitable. The orders come in, the team expands, and success scales with demand. But for too many entrepreneurs, that vision turns into stress, confusion, and regret. You take on more work, push harder, and hire faster—only to realize too late that cash is tight, production is strained, and your team is overwhelmed. Growth isn't supposed to feel like drowning.

You're not alone if you've ever felt overwhelmed by your own success. Many manufacturers hit this wall, not because their products aren't strong or their demand isn't real, but because they scaled without a solid plan in place. If you're thinking about growing your business, this post will show you how to do it with control and confidence.

This is what growth should feel like. Here's how to make sure it doesn’t feel like drowning instead.

Here’s how to avoid the four traps that quietly choke scaling manufacturers: cash pressure, mistimed capital investments, staffing misalignment, and working capital chaos:

1. Validate Demand Before You Commit Resources

More sales don’t automatically justify more spending. The key is qualifying the nature of your demand.

• Is it recurring or project-based?

• Are customers locking into long-term orders or placing one-offs?

• Are margins stable or eroding as volume increases?

Too often, manufacturers mistake a temporary backlog or spike for a growth signal. A flour mill that I worked with hired a full second shift to meet a large PO run—only to see volume evaporate the following quarter. They were stuck with fixed labor costs and idle time. It was both costly and demoralizing.

Ask this: If you doubled capacity today, would it be consistently filled next quarter—and at a profit?

2. Time Capital Investments Precisely

Buying new equipment, expanding floor space, or launching a new line all demand significant capital so the timing has to be right. The biggest mistake I see? Investing before utilization justifies it. Everyone knows the 80/20 rule, but do you know the 70/90 rule? Don’t commit capital until your current assets are running at over 70% utilization for at least 90 consecutive days. Consider a manufacturer that planned a $600K equipment purchase. Instead of buying immediately, they rented the same machine short-term to test throughput and track downtime. This gave them hard data on actual usage and ROI. As a result, they delayed the purchase, renegotiated the deal, and saved $300K—while keeping their cash position intact.

Use a 13-week cash flow forecast to model different CapEx timing scenarios. You’ll see how even a 30-day delay can materially impact your cash buffer.

3. Don’t Overhire—Build Labor Flexibility

Growth often tempts leadership to staff up quickly. But FTE costs are sticky and can drag margins if demand doesn’t materialize.

Instead, start by building a flexible labor model:

• Use contract or temp labor where possible ( btw, this is what I do as a fractional CFO ... I follow the same principle—I join your team as flexible talent, giving you senior-level financial insight without the long-term overhead).

• Invest in cross-training to unlock internal capacity

• Measure output per employee over a trailing 90-day period

  
  

Smart staffing is less about headcount and more about output efficiency. When you do need to hire, build a staged plan: conditional hires, training ramp windows, and reallocation buffers.

4. Expansion Magnifies Working Capital Risk

Here’s the silent killer: you can run out of cash during a period of record sales. Why? Because growth consumes working capital.

Every new sale may require:

• More raw material inventory

• Longer production cycles

• Slower receivables collection

Unless you adjust payment terms, negotiate better vendor deals, or tighten collections, growth can quickly strain liquidity.

I've seen manufacturers with 50% year-over-year revenue increases nearly default on key suppliers because their payables ballooned while receivables lagged 45+ days and debt service was too high. In these situations, restructuring AR processes, securing short-term financing, and renegotiating vendor terms can make the difference between thriving and choking on growth.

Don’t assume sales success equals financial health! Growth without working capital discipline is like trying to haul freight in a half-ton pickup—you’ll move fast at first, but you’ll break down before you get where you're going.

Final Thoughts: Plan the Climb Before You Scale

Confident growth isn’t about being cautious. It’s about being prepared.

If you lead a manufacturing business in Texas and are considering expansion—new hires, a new facility, added equipment, or a new product line—pause and run the numbers first.

The best manufacturers I work with make growth a finance-led decision, not just a sales-driven one.

Want help pressure-testing your growth plan? You should, because you don’t have to choose between growth and control—if you plan right, you get both.