Building for Growth: Why Structure Matters More Than Hustle
An Interview with Eric Osei, Founder of New Africa Impact Fund
For many African entrepreneurs, business growth is the dream, but the transition from a small, agile team to a structured, scalable enterprise often exposes hidden weaknesses. In a candid conversation, Eric Osei, founder of the New Africa Impact Fund and author of Funding Options for Businesses, breaks down why businesses must pay attention to formalization, structure, and smart hiring practices during this critical phase.
Why Growth Exposes Business Weaknesses
“It’s critical to draw attention to the difficulties that firms encounter as they expand,” Osei says. “Particularly around formalization and management systems. These are the pivotal moments that determine whether a business succeeds or fails in the long run.”
While informal operations may suffice in the early days, growth shines a spotlight on inefficiencies. What once worked can quickly become a liability when a business begins scaling across products, markets, or locations.
According to Osei, formalization is not simply a bureaucratic process: it’s essential to long-term sustainability. “You need defined roles, standard operating procedures, financial controls, and HR policies,” he explains. “That’s how you shift from a founder-led business to a system-driven enterprise.”
Signs Your Business Has Outgrown Its Informal Systems
Based on his experience advising small and medium enterprises (SMEs), Osei identifies several warning signs that indicate it’s time for structural upgrades:
- Communication Breakdowns
When people miss deadlines or duplicate tasks because “no one told me,” it’s a sign your business lacks defined workflows and accountability. - Unreliable Customer Experience
“Inconsistent service quality, poor follow-ups, and chaotic operations are a red flag,” he says. These issues directly impact client retention and brand reputation. - Inability to Scale
If your team struggles to keep up with demand, or if new employees are lost because nothing is documented, your systems aren’t built for growth. - Legal and Compliance Risks
Growth brings visibility. And with it comes scrutiny. From unpaid taxes to improper contracts, previously ignored legal matters can become major setbacks.
The Hidden Costs of Nepotism in Growing Enterprises
Another common trap Osei observes during early growth is the tendency for entrepreneurs to hire unqualified friends or family. While understandable, it can be a costly mistake.
“Founders often prioritize trust over skill,” he notes. “In the fragile early stages, they hire people they emotionally trust regardless of qualifications.”
But loyalty doesn’t always translate into performance. Many entrepreneurs also believe hiring friends or family saves costs through flexible pay, unpaid labor, or favors. Unfortunately, poor performance can cost far more in the long term.
“Even worse,” Osei adds, “is avoiding tough conversations. It’s harder to give feedback or let someone go, when there’s a personal relationship involved.”
Growth Requires More Than Hustle
“Every decision you make during a growth phase, whether in operations, hiring, or structure becomes either a foundation or a fault line,” Osei concludes.
For African entrepreneurs striving to scale, the message is clear: Growth requires more than vision and hustle. It demands structure, discipline, and sometimes, tough choices.
Want to dive deeper?
In the next newsletter, Eric Osei will share practical steps to help SMEs become investor-ready, and how to formalize your business without losing your identity. Don’t miss it. Subscribe here >>