LITMIR.BIZ

      Source: https://craft.co/reports/s-p-500-revenue-per-employee-perspective

      •How do I hire a guide for the ascent?

      Who has experience creating successful ventures? Ask that person to mentor you, or hire a coach. There’s no need to make the mistakes other climbers have made—a coach or mentor will help you avoid such pitfalls.

      •What will the celebration look like at the top?

      How will I celebrate my victory when I finally summit? Do something big to celebrate, like taking the entire company on a Caribbean cruise with everyone’s families. Or celebrate by getting the payday you’ve been working for. Sell the company to your largest competitor or a private equity group and make sure you celebrate personally as well as with a reward and party for the company.

Perform a Reality Check

      Now that you’ve laid out your plans in intricate detail, let’s do a reality check by looking at others who have climbed the mountain and see how things measure up. Let’s assume an expected growth rate of $3 million to $30 million in six years. The formula for growth rate is:

      ([Present—Past] / Past) * 100

      We will calculate as if the “Present” is at the end of the goal and “Past” is today. So in our scenario, the growth rate when we reach the goal would be:

      ([$30,000,000—$3,000,000]/$3,000,000) *100 = 900 percent

      This is a 900 percent growth over ten years. How does that play out year-over-year if we lay it out linearly? Growth is rarely in a straight line, but for these purposes it helps to illustrate what it looks like:

      This is an average growth rate of 31.4 percent. So how does this compare to other growth stories? The following chart reflects the median growth rate of publicly traded companies in the major markets over the last ten years from the time of this writing.

      “Dow Jones: The Dow Jones Industrial Average tracks thirty large, publicly owned blue-chip companies trading on the New York Stock Exchange (NYSE) and the NASDAQ.”

      “NASDAQ: The NASDAQ composite was created by the National Association of Securities Dealers (NASD) on February 8, 1971. The NASDAQ Exchange is mostly composed of more than three thousand stocks of the world’s leading tech and biotech leaders like Comcast, Apple, Netflix, PayPal, Google, Microsoft, Oracle, Amazon, and Intel.”

      “Annualized Growth Rate: The yearly average increase in the total value of an individual investment.”

      “Blue Chip: A blue chip is a nationally recognized, well-established, and financially sound company. Blue chips generally sell high-quality, widely accepted products and services. Blue-chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth.”

      These numbers represent large blue-chip companies, which are different from where you are, so there are a couple of other indices we need to consider. Companies in their first ten years have the potential to grow much faster than the publicly traded markets listed above. According to data gathered from Inc. Magazine, the average three-year growth rate for the five thousand fastest growing companies in the US is 155 percent. This compares to our scenario very well. Our average three-year growth rate is 86.43 percent, which is very conservative for a new start-up. The chart below shows the median growth rates of private companies listed on the Inc. Magazine’s. 500/5000 index for the last six years. It also has the top fifty fastest growing privately held companies so you can see how the very top performers do.

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