Why Growing a Businesses Too Fast Is Risky

There is no time like the present to start a business. Many people’s perspectives about work are shifting, and entrepreneurship is becoming more appealing to those who want to be their own boss. In fact, nearly two-thirds of small business owners say they want the freedom and flexibility of building their own company from the ground up and running it themselves. Even better, 39% reveal they started their businesses because they wanted to pursue their passion. Interestingly, less than 10% say money is their main motivator. If you're like me, you work hard to turn your dreams into reality through optimism and determination. But what if I told you that simply chasing money, combined with too much growth too fast, can actually lead to the opposite of what you want in the long run?

When I started Homestead Road in 2007, I realized quickly chasing the dream is much more important because the money will eventually follow. There aren't many CEOs who have built sustainable business models with money being their only goal. At the same time, one of the biggest reasons why new businesses fail is they grow too fast. It's easy to get caught up in expansion and dollar amounts, but without focusing on the present moment and purpose of your company, you can lose sight of the big picture and set your business up for misfortune.

I realized I could make money easily in the real estate industry, but I also knew it wasn't just about selling houses. My goal was and is to give everyone an extraordinary, no-pressure experience. My team and I take the time to get to know each customer, their goals and their situations, and we always put their needs first. I also wanted to create a company that attracted, retained and inspired the best people in the business. That's our purpose, and making money is a byproduct of that.

Over the years, I also made a conscious effort to expand our reach at a deliberate pace. I opened offices in Minnesota, Wisconsin and Florida because the timing and markets were right, and while I certainly could have grown much faster, I chose not to. Here's why growing a business too quickly is not the best move:

1. Growing too fast can stretch your resources too thin and spell disaster long-term. You cannot expect successful growth if you’re having to stretch out your current resources such as cash, people and services beyond your standards of quality, and any challenge - even if it’s small - can become a big problem. If your business starts growing too fast, you have to ask yourself if you have the systems set up to support and manage your growth. Supporting growth at a faster speed requires the right tools. If you wait to build the right systems and proper infrastructure until you actually need them, it’ll be too late. That’s why it’s crucial to make sure you have enough resources in place and they're able to handle the growth before deciding to expand.
2. You will have a tougher time finding quality talent. If you grow your business too fast, chances are you will need to hire swiftly in order to keep up with demand. This can, unfortunately, lead to hiring people with no experience or people who simply are not a good fit for your company. Rushing the hiring process also means you won't be able to spend the time seeking out diverse talent. When you’re too busy trying to fill open positions, you lose sight of the importance of hiring with intention. It reminds me of one of my favorite quotes: “Life’s a marathon, not a sprint.” The faster we run, the greater the risk is of losing control and falling harder.
3. Growing too quickly can also lead to burnout and harm company culture. Rapid growth can put your employees in a position where they can't keep up with the job's growing demands and responsibilities. This can cause employees to worry about getting things done, rather than getting them done well. And ultimately, it can lead to burnout. It also becomes easier for a CEO to lose touch with employees, leading to disconnect and lack of trust or even worse, employees leaving for a company whose culture is more clearly defined and centered around the overall well-being. At Homestead Road, it matters a great deal to me that I’m checking in with my employees and asking them about how they’re feeling – a small yet genuine gesture that can go a long way.

When you grow too fast, you can damage a lot of the hard work you and your employees have put into making your business successful. By being more thoughtful and methodical about your growth, you can make sure to stay true to your passion and purpose. And keep in mind, slowing things down in your personal life is beneficial too! As we get ready to welcome the new year, my biggest goal for 2022 is to remember the small moments matter most. I plan to take one month off in the summer and dedicate it to spending quality time with my family. It's easy to lose sight of the important things in life, but it's important to take a step back and reevaluate where we're at and where we want to go -- both in work and in life. Your future self will thank you for it.