The mechanism is straightforward. At low volume, one person holding a process is efficient. There is no coordination cost and no documentation to maintain. As volume rises, that person becomes the constraint on everything the process touches, and the business cannot grow past whatever they can personally handle.
It fails at the worst moment because the pressure arrives before the symptom is visible. Everything works until the week that person is ill, on holiday, or simply overloaded, and then several things stop simultaneously. The failure is not gradual and there is rarely warning.
The processes to identify are the ones with a single owner and a real cost of error. Invoicing, taking payments, ordering, scheduling, and handovers between stages usually qualify. A task only you can do that costs nothing when it goes wrong can stay in your head. One that loses money or a customer cannot.
The second thing to break is quality control, and it breaks quietly. At small volume you check everything personally because you touch everything. As volume rises that stops being possible, and unless something replaces it, the checking simply ceases without anybody deciding. Standards then drift downward at a rate nobody notices until a review describes it.
Communication is third. The informal updates that worked when it was one or two people stop reaching everybody, and the failure appears as a customer being told two different things. A business that never wrote anything down discovers that the shared understanding it relied on was actually one person remembering.
Cash breaks in a way that surprises profitable businesses. Growth consumes working capital because materials and labour go out before invoices come back, so the faster you grow the more cash you need. A business can be more profitable than ever and unable to pay a supplier in the same month.
Onboarding is the fourth, and it compounds. Bringing somebody in without documented processes means teaching them by working alongside them, which takes the time of the person who was already the constraint. The absence of documentation makes hiring slower exactly when hiring is the solution.
The fix in every case is the same and it is unglamorous. Write down the processes with a single owner and a real cost of error, starting with the highest risk. Not everything, and not perfectly, but enough that somebody competent could follow it.
Do it before you need it, which is the part that requires discipline. Documentation written under pressure is worse and the pressure arrives with the growth rather than before it.
Then check which processes still have one owner every few months, because the list changes. New things accumulate in one person's head faster than old things get written down, and the gap is where the next failure is forming.
Watch for the person who cannot take a holiday, because that is the clearest signal a process has a single owner. If a week away would create a problem, the problem already exists and the holiday merely reveals it.
Document by recording rather than by writing where that is faster. Talking through a process while doing it, then tidying the transcript, produces something usable in a fraction of the time and is considerably more likely to actually happen.
Fix the constraint rather than working harder around it, since a business where one person is the bottleneck does not improve by that person doing more.