When growth gets more expensive: What SMEs should watch out for as they scale

Higher sales are welcome news for a small and medium-sized enterprise (SME). But as orders increase, so can the work and expense involved in fulfilling them, putting pressure on margins even as revenue rises.

More orders mean more invoices, payments and suppliers to manage. Expanding overseas can add foreign exchange and transaction costs. Employees may also spend longer on routine administration, particularly if processes designed for a smaller business have not kept pace.

Some costs naturally rise as a business expands. Others reflect outdated processes, systems or financial arrangements that put unnecessary pressure on margins. The challenge for business owners is to distinguish between the two, so they can support growth while keeping avoidable costs in check.

These pressures will be the focus of Built to Scale: How SMEs Can Reclaim Margins and Optimise Cash Flow, a panel discussion organised by The Business Times and MariBank on Oct 15 at The St Regis Singapore.

Where costs creep in

“Growth can change a company’s cost base in ways that are not always immediately obvious,” says Tiger Wang, consulting director, SME business solutions at MariBank. 

Wang will be part of the discussion alongside Sharon Teo, CEO and co-founder of Inspire-Tech, and Tan Yee Hern, assistant managing director of Capstone Aluminium.

Together, they will bring different perspectives to the issues facing growing SMEs, from financial and advisory considerations to the day-to-day realities of managing rising costs and more complex operations.

“The important thing is to understand which costs are increasing as the business scales, and whether the processes and financial arrangements put in place earlier still make sense today. When processes aren’t standardised across a growing team, the cost of fixing mistakes before products or deliverables reach the client quietly eats away at gross margins.”

“Business owners may see revenue increasing, but the picture underneath can become more complicated as the company scales,” says Wang. 

The panel will examine expenses that business owners may overlook, including bank maintenance fees, transfer charges and foreign exchange spreads, alongside energy costs and other overheads.

It will consider when these expenses warrant closer scrutiny and whether banking and payment arrangements established earlier still meet the company’s needs.

Making technology earn its keep

Technology can help SMEs handle more work, but businesses also need to assess whether their tools are saving time, reducing costs or improving operations.

The discussion will explore practical uses of AI, including inventory forecasting, alongside tools such as automated invoicing, digital payments and automated workflows that can help businesses meet customers’ expectations for faster service and fulfilment.

It will also address the need to review systems already in use.

“For instance, tech stacks need to be audited for their functions and we should ask ourselves if there are any overlaps between tools,” says Wang of the need to regularly review existing systems.

For business owners, that means examining what each tool does and whether several are performing the same function.

Keeping cash flow moving

Growth can also increase the need for working capital. Businesses may have to meet the costs of fulfilling more orders while waiting for customers to pay.

The panel will explore what happens when SMEs need funding sooner than traditional approval processes can provide it.

“Growth will always bring some additional cost and complexity. What businesses can do is make sure these do not increase faster than they need to, and that the way they operate continues to support the next stage of growth,” says Wang.

Register for Built to Scale: How SMEs Can Reclaim Margins and Optimise Cash Flow taking place on Oct 15, 2026 at St Regis Singapore to find out how your business can grow more efficiently while protecting margins.