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I keep seeing the same pattern in small businesses that grow past their original size. Not failure—something more subtle. Things start slipping. Nothing catastrophic, just friction everywhere.

Growth doesn’t break businesses randomly. It breaks them at the seams.

The Seams

The seams are the places where one person’s work hands off to another’s. Where information needs to move. Where “we all know how this works” meets someone who doesn’t know yet.

At five people, you don’t have seams. You have conversations. Someone shouts across the room, and the problem is solved. Context lives in shared memory. Everyone was there when the decision was made.

At fifteen people, the room is too loud. Or there are multiple rooms. Or multiple time zones. The conversations that used to happen automatically now require scheduling. The shared memory has gaps. New people weren’t there when the decision was made—and no one wrote it down.

What Actually Breaks

Informal coordination is the first casualty.

This is the work that happens between the official processes. The quick check-in before sending something to a client. The heads-up that a deadline is slipping. The context that makes a handoff smooth instead of confusing.

At five people, informal coordination is the process. At fifteen, it’s a bottleneck. There’s too much to coordinate, and not enough time to do it the old way.

So things fall through cracks. Not because people are careless, but because the cracks didn’t exist before. The business grew new cracks faster than it grew new ways to cover them.

The Founder Bottleneck

In most growing small businesses, the founder becomes the default router. Every question, every exception, every “I’m not sure who handles this” flows to the same person.

This isn’t ego. It’s structure—or the lack of it.

When nothing is written down, the founder is the only one who knows how everything connects. They’re the institutional memory. The tiebreaker. The person who can answer “what do we usually do when…” because they were there for every “when.”

This works until it doesn’t. The founder starts dropping balls. Or they become unavailable and everything stalls. Or they burn out from being in every conversation.

The business has grown, but its coordination capacity hasn’t.

Structural Debt

Here’s the uncomfortable truth: the debt was always there. Growth just made it expensive.

Those informal processes that worked at five people? They were never scalable. You just didn’t need them to scale yet. The missing documentation, the unclear roles, the “everyone just knows” assumptions—all of it was structural debt, accumulating quietly.

Growth is the interest payment.

The business didn’t break because it grew. It broke because the structures it needed at fifteen people were never built when it had five. And now you’re trying to build them while the plane is flying.

What Would Need to Change

Addressing structural debt requires doing the boring work that small businesses usually skip:

Write things down. Not everything. But the things that matter: how decisions get made, who owns what, what the process is for the work that crosses between people. If it’s not written, it doesn’t scale.

Create explicit handoffs. When work moves from one person to another, what information needs to travel with it? What’s the format? What triggers the handoff? This used to happen naturally. Now it needs to happen deliberately.

Distribute authority. If every exception routes to the founder, you haven’t delegated—you’ve just added steps. People need to know what they’re allowed to decide without asking. That requires clear boundaries, communicated and enforced.

Hire for the structure, not just the work. The next hire isn’t just about capacity. It’s about who owns the coordination problem. Sometimes you need a person whose job is to make the seams work.

The Timing Problem

The hardest part isn’t knowing what to do. It’s knowing when.

Build too much structure too early, and you slow down a business that needs to stay nimble. Build too late, and you’re constantly behind, patching systems while they’re failing.

There’s no formula. But there’s a signal: when the same problems keep recurring, when handoffs keep failing, when the founder can’t take a day off without things stalling—that’s structural debt becoming unaffordable.

Growth exposed it. Now you have to pay it down.

Recognizing when informal coordination has reached its limits is the first step. The next question is whether systems are the right response—or if something simpler will work. See: When Systems Are the Right Answer.