‘Steady’ is not a word you’d normally use to describe an entrepreneur.
The more typical image is as flamboyant buccaneers, identifying a customer need, raising capital and using energy and intellect to fulfil that need, managing risks along the way.
Tales abound of erstwhile entrepreneurs starting an enterprise in their parents’ garage, from a laptop in their bedroom or from a run-down shop. Almost overnight they become millionaires, then billionaires and high-profile media personalities.
That happens, of course, but for many business owners the journey to riches is a little more sedate and in some cases, more predictable. The few who do succeed (the statistics say that the majority don’t) and become successful and wealthy often achieve this over years, or decades of steady and predictable growth.
Through the wonderful power of compounding (known and loved by many investors), 10% growth, year after year, will create a business of scale if carried on for long enough.
Of course, most businesses don’t grow in a straight line.
They have good years and bad.
The year 2020 for many businesses will be more about survival than growth. With depleted reserves and additional loans, many may take several years to recover. But recover they can and as long as the longer term trajectory is up, they can get back on their former growth curve.
Let’s look at an example.
A small shop with turnover of £100k in their first year. Sales growth averaging 10% each year for 20 years would rise to a turnover of over £670k in year 20. That’s growth of nearly 7 times! That excludes inflation. So that is more units sold, more profit (if margins and overheads are managed) and more scale.
Of course, that is a hypothetical and simplistic scenario.
There’s a truism in business though - that what you plan for, you achieve. Planning for a minimum of 10% growth (in normal times) is eminently achievable for most businesses. The plan needs to have substance - in our example of the shop, in one year growth may come from increasing the range, another year from expanding or reconfiguring the space, adding new employees, moving on-line etc. Growth won’t be linear but if the trend line is a minimum of 10% growth, scale can be achieved by steady, consistent, application.
Getting rich quick can be a compelling and seductive objective for some. The lucky few with extraordinary talent or perfect timing may succeed.
For the majority, steady, persistent application can deliver similar results...but it doesn’t happen overnight.