The journey from micro-finance to small enterprise while keeping the growth momentum alive is not an easy path to travel. The challenge starts with the entrepreneur herself. In micro-enterprises, almost without exception, the entrepreneur is the owner, labour and accountant ̶ all rolled into one person. As the business grows, so does the workload.

The paradox of growth and growth itself becoming a hurdle sets in immediately. As the earning stream starts, the need to appropriate the entire earning for consumption increases. From my experience of working with micro- and small-enterprises, I have seen that this is the first critical juncture that decides the future of such enterprises.

The paradox of growth for a micro-enterprise lies in balancing personal needs against business needs. A micro-entrepreneur starts her enterprise at an earning level that is barely sustainable. Therefore, any earning growth at that stage has a high propensity to get appropriated into consumption. At times, the appropriation may be so intense as to even defy the first principle of business – "meet your cost obligations before dipping your fingers into the cashbox".

This has two consequences: a) the entrepreneur concerned cannot save up for expansion and b) her inability to balance the two forces sinks her into debt.

From the outside, it might sound trivial yet, trust me, this is a crucial differentiator between success and failure at this stage.

Sometimes, growth itself becomes another hurdle. This also is an interesting issue as the micro-enterprise sets on the growth path that could take it to the next level—a small-scale unit.

When an entrepreneur starts off at that level she gets ‘married’ to her business. As the tasks grow, she tends to absorb all tasks. At the initial stages, there is hardly any option. Without the money to hire people, an entrepreneur is forced to multitask and micro-manage.

However, with growth, in most cases, the entrepreneur keeps micro-managing the growing business the same way. Her inability to delegate, a habit that sticks, creates inflexibility in the business. It becomes so dependent on the entrepreneur that even the smallest decision can be held up if she falls ill.

Entrepreneurs often don’t realise how critical this can be to the business as it grows from micro to small. From strategy to production line, if an entrepreneur controls all decisions, she adds a big risk factor to the usual mix of business risks. Growth itself becomes a threat to business in all such cases. My advice to such entrepreneurs is to learn how to delegate from the early stages. Share decision responsibilities while retaining the reins.