I hear often about new entrepreneurs seeking to expand their businesses. This week a friend told me about someone who is bootstrapping a traditional business in a crowded space.

She’s been in business for less than a year, is the company’s only employee, and works out of her home. Now she’s decided to hire quickly – in fact, she’s determined she wants to immediately hire three people full-time. Presumably she’ll instantly take her payroll commitment from providing for herself to somewhere in the ball park of $100,000 – $150,000/year. 

It’s no secret most entrepreneurs love to achieve; it’s hard wired into our psyche. We need to challenge ourselves. And many of us –  at times for better and sometimes for worse – possess a strong desire to command and conquer; to build our “kingdom.”

Tempered by reason, these are great strengths. When indulged by the baser part of human nature, as we’ve just seen they usually lead to crippling mistakes: unrestrained growth, over leveraging, ballooning expenses, expansion into too unrelated markets.

This phenomenon manifests itself in the most common mistake I’ve seen newly successful entrepreneurs make: creating unmanageable overhead, especially in area of payroll. They simply hire too many people too quickly. They think something like, “If I can make this much money with five people imagine how much I can make with twenty…then fifty!” The idea is similar to Jim Collins’ label “hubris born of success.”

From my observation, rarely does rapid expansion work out well for small business…even when it initially appears to, it is seldom sustainable and ends up costing much more than it ever made. When the industry cools  or the company hits a bump in the road the leader suddenly doesn’t have enough financial margin, particularly in the form of free cash flow, to weather the storm.

I’m convinced that timing and patience are the keys that open the lock whose chains surround the chest of growth. Living a business life on low fixed costs might not be sexy; neither is saving money or choosing an easily affordable mortgage payment. But it’s smart. Here’s to lean, sustainable growth.