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The Entrepreneurial Growth Trap
Nov 2, 2017  |  Kenelm Tonkin

Your full-time business is small. If you own a part-time business, it’s even smaller. If you aspire to be a business owner, the operation you launch will be small.

‘Small’ is everywhere.

Have you ever stopped to think why there are so many ‘small’ businesses? Why aren’t more small businesses becoming mid-sized and then large? I’ve been an entrepreneur since August 2000, so I had an idea. However, I wanted to double-check so I asked 1,287 business owners what was holding them back.

The bottom line result of my study might shock you:

Only 18% of participating business owners pinpointed their growth challenge but didn’t know how to fix it. The other 82% saw only parts of the overall problem.

Here’s the fascinating breakdown.

40% of full-time business owners understand that their #1 challenge is systemizing their businesses so they can scale. We’ll come back to this insight in a minute. 39% say their #1 challenge is marketing and winning new customers. The remaining 21% report a mix of issues like a lack of working capital (6%), their individual work habits (6%), their competition (3%), assembling a team (3%) and insufficient time (3%).

50% of part-time business owners say the reason they’re haven’t turned their part-time business into a full-time operation is a lack of capital. They need money to fully launch but don’t know how to secure it. 24% report that their marketing is holding them back. 15% feel the lack of time is inhibiting their growth, and no wonder if they’re squeezing in 2 hours each night after their day job sucks them dry. The remaining 11% is a mix of not having the necessary knowledge, experience and mentoring (5%) to transform into a full-time operation, a self-reported lack of confidence (3%) as well as inconsistency and procrastination (3%).

50% of aspiring business owners say they haven’t launched because of a lack of capital with 27% reporting a lack of knowledge, experience and mentoring. The other 23% are a mix of lack of confidence or fear (9%), a lack of time because they have a day job (9%) and no business idea (5%).

The truth is that businesses which aren’t systemized, can’t scale. Unless you work to automate processes in your operation, it won’t grow. All the other issues mentioned aren’t the cause of being small, they’re the symptoms. They are the results of not systemizing and scaling.

It’s your choice whether to systemize and scale. It’s an owner’s decision, an entrepreneur’s resolution. It’s your choice is stay small then shutter, or systemize and scale.

It took me 6 years to discover this. I had to learn the hard way.



In the process, I learned that there are 14 Entrepreneurial Disciplines. A well-run business has all fourteen mastered. Neglect any of them and your business withers.

One of the 14 Entrepreneurial Disciplines is: Growth Systems.

If you create Growth Systems, your business will systemize and scale. If you don’t create Growth Systems, you won’t grow. You will stay small. You will never make it to mid-size.

Why would we know any of this when we started? We’re busy with all the stuff we have to do now, right? And we didn’t go to business school. And if we were lucky enough to do that, the professors didn’t know to teach it to you because they’ve never been in business. And, even if you were lucky enough to have this mentioned to you, it’s hard, hard stuff to implement without the proper guidance.

It’s no wonder small businesses are everywhere. It’s no wonder they stay small before going out-of-business. It’s no wonder there are so few mid-sized and big businesses.

After six years of struggle, I had an epiphany and grabbed a notepad and pen. My scribbles resulted in what I today call The Entrepreneurial Growth Trap.

It goes like this:

For whatever reason, we raised inadequate capital for our business ... so

  1. We started with insufficient cash;
  2. This meant that we couldn’t afford to hire a team;
  3. Which forced us to try to do everything ourselves;
  4. But we soon discovered there are so many things which a business requires from us, that there aren’t enough hours in the day, that things get missed and corners are cut;
  5. One of them being marketing which we’re not experts in anyway;
  6. Which results in low revenue;
  7. Leading to insufficient cash

and the Entrepreneurial Growth Trap continues until we go out-of-business.

If you’re in a full-time business, does any of this sound familiar? If you have a side-business at night part-time, can you see yourself in this trap? And, if you aspire to go into business, you want to avoid this, right?

Once I discovered the trap I was in, I then had to work out how to escape it.

And I did.



In theory, it’s simple. You make time. You strategize. You systemize. You systemize capital raising, assembling a team, delegation and report-back, marketing and growth triggers. You systemize all aspects of your business, the 14 Entrepreneurial Disciplines. Soon, you discover that your business needs you less and that you have much more free time. You use this free time to plan growth. You grow your business to a size large enough to sustain an amazing personal income and lifestyle, all whilst continuing to be profitable. Once done, you have choices like further expansion, sale and just enjoy life more.

That’s the theory.

The practice is hard, requires thoughtful instruction and ongoing guidance. If you can master Growth Systems or what I call, Systemize and Scale, it will definitely change your life.

It took me many years to master the techniques and I’ve been blessed with gifted mentors along the journey. I’ve built businesses from $0 and then sold them to public companies. I’m on my 15th start-up right now. I’m constantly refining my processes.

The knowledge and practice changed my life forever.

If you want more information on this topic and others, feel free to dive into my blog. Some related content is recommended below. I strive to elaborate as much as possible to create a treasure-trove of articles, videos, infographics, experiments, self-assessments, tools and more.

Don’t forget to share on LinkedIn, Facebook, Twitter and email your friends and colleagues.


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