The Hidden Cost of Rapid Growth in Real Estate Business

By Andy Mulholland

He has a background in leading a top real estate team for over a decade and an understanding of the critical role of clear financials, Andy, along with his wife Ellyn, a seasoned real estate CFO, co-founded Simple-Numbers.

Are you a real estate team leader and you want to grow your business quickly but fear losing money in the process? If so, you’re not alone. Many real estate team leaders make the mistake of chasing fast growth without thinking about long-term profitability. Today, I’ll break down why it is not an ideal path to follow.

The danger of fast growth. A lot of team leaders spend too much money because they want to grow quickly. They look at other teams growing fast and think they should do the same. So, they start hiring and spending like crazy. However, there’s a huge problem. Most of the time, they end up producing at a high level themselves just to cover the costs. The result is that they give up all their commission dollars just to manage the expenses.

It may seem like a good idea to grow fast, but this approach often eats away at your profits. It’s like running on a treadmill—you’re moving fast, but you’re not getting anywhere. You’re working harder, not smarter.

Why is slow growth better? It’s tempting to want things to happen quickly, but slow and steady wins the race. Growing your business profitably means you build a strong foundation. You don’t have to throw everything at it and risk burning out.

By focusing on profitability, you set yourself up for success in the long run. Yes, it might take a little longer, but you’ll get there without draining your resources. This approach prevents the stress and pressure that come with rapid growth. You want your business to support you, not overwhelm you.

Make the right choice for your business. If you want to succeed, think long-term. Focus on growing slowly but profitably. Don’t make the mistake of burning through cash just to grow fast. Your business doesn’t need to be out of control. Keep it steady, and focus on sustainable growth.

Taking this approach will pay off. Your business will thrive, and you’ll keep more of your hard-earned profits. Stop chasing quick growth and focus on smart, profitable growth. Your future self will thank you.

Stop letting your real estate business drain you by trying to grow fast and tying your cash flow to your expenses. Instead, focus on growing your profitability first to ensure you have a steady cash flow that covers both your profits and expenses.

With the right mindset, you can grow at the right pace and keep your profits in check. If you have any questions, you can email me at andy@simple-numbers.com. I will help you get your bookkeeping right to ensure you understand your business’s true financial health.