How the Theory of Constraints Can Help Your Business Grow Faster
If your business feels stuck—facing the same challenges quarter after quarter despite all your efforts—you’re not alone. Many entrepreneurs hit a growth ceiling not because they aren’t working hard enough but because they’re tackling too many problems at once instead of focusing on the one obstacle that’s truly holding them back.
That’s where the Theory of Constraints (TOC) comes in.
The One Bottleneck Slowing Everything Down
The TOC states that every business has a primary constraint—the biggest bottleneck preventing growth. If you identify and solve that constraint first, everything else improves faster.
Most businesses try to fix multiple issues at once, but that approach spreads resources too thin and delays real progress. Instead, prioritizing and resolving your biggest constraint first creates compounding returns—where solving one problem makes the next one easier.
Your Accountant and CFO Can Help
Identifying your biggest constraint isn’t always obvious, especially when you’re in the thick of day-to-day operations. This is where a strategic accountant or CFO can add tremendous value.
- Your accountant should be providing financial clarity—helping you identify cash flow bottlenecks, inefficiencies, and underperforming revenue streams.
- A CFO (or fractional CFO) should be working with you to prioritize financial and operational constraints, ensuring you’re investing resources in the areas that drive the biggest impact.
By partnering with a financial expert, you gain a clearer picture of what’s holding your business back and how to fix it efficiently.
Step 1: Identify Your Biggest Constraint
Every business challenge typically falls into one of three categories:
- Increase Customers – How can you drive revenue growth?
- Increase Lifetime Value – How can you improve profitability and customer retention?
- Decrease Risk – What risks (cash flow, key person risk, market shifts) threaten your business?
Ask yourself:
- What’s the biggest thing slowing down my growth?
- Have I faced the same challenge for two or more quarters?
- Is this issue persisting due to lack of focus, or is the wrong person responsible for solving it?
A CFO can help analyze financial data to pinpoint where your business is struggling most—whether it’s a pricing issue, profitability challenge, or operational inefficiency.
Step 2: Solve It Before Moving On
Instead of juggling multiple problems, focus all your efforts on solving your biggest constraint before moving on to the next challenge.
The Cost of Doing Too Much at Once
Imagine you have five major business challenges (we’ll call them “Rocks” A, B, C, D, and E), and each requires 10 workdays to complete.
You have two ways to approach this:
Scenario 1: Working on All Rocks at the Same Time
If you split your time equally across all five projects, your schedule looks like this:
- Monday: Work on A
- Tuesday: Work on B
- Wednesday: Work on C
- Thursday: Work on D
- Friday: Work on E
Since you’re only making one day of progress per week on each rock, and each rock requires 10 full workdays, this means:
- Rock A finishes in 10 weeks
- Rock B finishes in 10 weeks
- Rock C finishes in 10 weeks
- Rock D finishes in 10 weeks
- Rock E finishes in 10 weeks
The problem? You’re spending time and money on all five challenges without seeing any impact for 10 weeks. No constraint is fully solved until the end.
Scenario 2: Completing One Rock at a Time (Prioritizing the Biggest Constraint First)
Instead, you fully dedicate your time to solving Rock A first before moving on to the next challenge:
- Week 1-2: Solve Rock A (Completed)
- Week 3-4: Solve Rock B (Completed)
- Week 5-6: Solve Rock C (Completed)
- Week 7-8: Solve Rock D (Completed)
- Week 9-10: Solve Rock E (Completed)
The total time is still 10 weeks, but with a major difference—you see results immediately.
Why Scenario 2 is More Effective
- Scenario 1: You wait 10 weeks before seeing any impact.
- Scenario 2: You see results in just 2 weeks, and each solved constraint makes the next one easier.
The Compounding Effect of Solving Constraints
Fixing Rock A (the biggest constraint) first increases momentum and efficiency, making the next rocks easier:
- If cash flow is your biggest constraint (Rock A), fixing it means you can afford to hire (Rock B) sooner.
- If process inefficiency is your constraint, solving it may reduce workload and eliminate the need for extra hires.
- If a system integration is slowing you down, solving it might automate processes and resolve multiple issues at once.
This compounding effect accelerates overall business growth. Instead of struggling with multiple constraints for 10 weeks, you gain momentum with each completed rock.
Step 3: Do You Have a Focus Problem or a “Who” Problem?
If a constraint has persisted for two or more quarters, the issue might not be what you’re doing, but who is responsible for solving it.
Ask yourself:
- Have I been distracted by other priorities instead of truly focusing on solving this constraint?
- Have I given this my full attention and it’s still not solved?
- If so, is the wrong person responsible for fixing it?
- Does the person tackling this issue have the right authority, resources, and skills to get it done?
If the problem is lack of focus, that’s the first thing to fix.
If the problem is the wrong person, shift accountability or bring in outside expertise to break through the bottleneck.
How Your CFO Can Help Here
A CFO or financial advisor should play a key role in making sure the right people are working on the right problems. They can:
- Ensure financial and operational priorities align
- Help assign responsibility to the right team members
- Offer data-driven insights to track progress and impact
Final Thoughts
Most businesses fail to see results quickly because they try to fix everything at once. But by focusing on your biggest constraint first, you:
- Generate immediate results
- Build momentum faster
- Make other problems easier or even irrelevant
Your Next Step
Work with your accountant or CFO to identify the constraint that’s holding your business back. Then, dedicate all your efforts to solving it first—before moving on to anything else.
If you need help identifying the biggest constraint in your business, Argento CPA specializes in CFO advisory services. Let’s talk about how we can help you unlock faster, more profitable growth.