Oftentimes you will hear the phrase “exponential growth” bandied about in describing company growth at company pep rallies, investor sessions and nearly any time you get a group of CEOs in a room. The use is to highlight dramatic growth, typically doubling and doubling again.
This is fairly easy to do in the early stages of a company if the fundamentals are there. We know it isn’t difficult to go from $10,000 to $20,000 in sales. If your history is short, growth is a powerful motivator. But what happens when you are well-established multi-million dollar company and struggling to show 20, 10 or even 5 percent growth?
I suggest think exponentially. Specifically, think in terms of the “Rule of 70” which is a product of the Malthusian Growth Model. The Rule of 70 states that the years it takes to double an asset based on a constant rate of growth can be calculated by dividing 70 by that annual rate of growth. For example:
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| Annual Increase in Revenue |
Years to Double |
| 35% |
2 |
| 23% |
3 |
| 14% |
5 |
| 10% |
7 |
| 7% |
10 |
| 5% |
14 |
| 2% |
35 |
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The mathematics may be invigorating or sobering depending on how you have been planning your growth. Getting a good idea of time line is a great first step in visualizing your company’s growth. Setting a goal of doubling your company’s revenue might seem audacious, but it can be done achievable steps. Understanding your doubling time – whether 3 years or 35 years – allows you to be more strategic in your business management.
Next time we’ll talk about some considerations to make during your plan to achieve exponential growth.
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Darryl Parker owns Parker Web, a website management company based in Charlotte, NC. Parker Web has been named to the Charlotte Business Journal’s Top 25 List of Web Design Firms each year since 2004. Darryl Parker has been interviewed for articles appearing in CNN Money, CRN Magazine, and local publications for his knowledge in small business uses of the Web. As a website manager, he works with growth expectations every day. You can also learn more on Facebook via the Parker Web fan page.
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