In the short term, it hurts your profitability because you have to spend X amount of time correcting those mistakes. For new companies, the cost of correcting mistakes often means a further squeeze on profit margins that are tight to begin with. The unwary can find themselves actually losing money by taking on new work. Expect staff stress Extra work correcting mistakes can add to the stress faced by a staff that's also trying to adjust to changes the organization made to handle this new work. The strain can wreak havoc with retention of the most competent employees, whose dedication built the firm.
Rapid growth is one of the quickest ways to fail in small business.
If you grow too fast, things screw up. There's no way to avoid it. It's much tougher to keep them when herds of new employees show up. At that point, long-time employees feel less invested in the company's success. That's why stock options are so popular.