much moleskin will I need to cover my blisters?
Write out the difficulties you expect to encounter along the way. What obstacles will you need to overcome? What equipment will you likely need to replace along the way?
•Will I need oxygen?
Do you expect to make a large purchase of technologies or acquire other companies to reach your goal? Will you need an infusion of cash at some point up the mountain? Do you plan to expand internationally? Are you going to run a Super Bowl ad or dominate the market with advertising? If you answered yes to any of these, where will the money come from? Will you self-fund from the profits of the company? Will you seek additional funding: venture capital, private equity, debt financing, friends and family, angel investors, crowdfunding, personal savings, or a strategic partner?
•What other supplies do you need?
What is your required list of equipment? If your company deals entirely in virtual goods or services, list out all the computers, desks, chairs, phones, etc.
•Where will we camp overnight? What shelter do we need?
How many locations or markets do you need to be in to achieve the goal? How many offices or buildings will you need?
•Which route will I take up the mountain?
Plan the ascent up the mountain year-by-year. Plan what the revenue per year increase will look like. Plan how many people you need to hire and when. Determine when you must move into your new office space. Plan for any acquisitions or purchases of technology or intellectual property. Do it year-by-year all the way up to the month you reach your goal.
•How long will it take you to reach the summit?
Is it six years, ten years, or three years? This is best determined by first discovering the revenue number, growth rate, and number of units sold. Once you have a clear vision around these items, you can confidently estimate a timeframe.
•How will I train for the expedition?
What skills do you, as the CEO, need to have to accomplish your goal? How will you get that training? How will your current and future team get the skills they need?
•Who will join you on this adventure?
When you hit your goal, how many people will be working at your company? Lay out the org chart. Use your current production rates to determine the number of people needed to produce the product or deliver the service. Add in sales, marketing, and customer support departments. Add in key roles for HR, operations, and finance. Will you bring legal in-house? If you feel like you are taking a stab in the dark about how many people you will have when you hit your goal, you can reverse engineer this as well by working backward from “revenue per employee” (RPE). For example, if you have a goal of $10 million and your rev/employee is $400,000, that equals twenty-five employees. Here is a chart that displays RPE by industry of S&P 500. Startups in growth mode are going to be in the $150,000-$400,000 range.
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.
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:
| Revenue | YoY Growth Rate | Cumulative Growth Rate | Three-Year Growth Rate |
| $3,000,000 | 0 | 0 | 0 |
| $6,000,000 | 100.0% | 100.0% | 0 |
| $9,000,000 | 50.0% | 200.0% | 0 |
| $12,000,000 | 33.3% | 300.0% | 300.0% |
| $15,000,000 | 25.0% | 400.0% | 150.0% |
| $18,000,000 | 20.0% | 500.0% | 100.0% |
| $21,000,000 | 16.7% | 600.0% | 75.0% |
| $24,000,000 | 14.3% | 700.0% | 60.0% |
| $27,000,000 | 12.5% | 800.0% | 50.0% |
| Revenue | YoY Growth Rate | Cumulative Growth Rate | Three-Year Growth Rate |
| $30,000,000 | 11.1% | 900.0% | 42.9% |
| Average | 31.4% | 500.00% | 86.43% |
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.”
| Annualized Growth Rates | ||
| Dow Jones | S&P500 | NASDAQ |
| 9.70% | 11.33% | 18.46% |
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.
| Year | Growth Rate (Median) | Top 50 |
| 2020 | 165% | 9127% |
| 2019 | 158% | 7453% |
| 2018 | 172% | 9154% |
| 2017 | 142% | 9339% |
| 2016 | 143% | 7684% |
| 2015 | 150% | 8123% |
| Six-Year Avg | 155% | 8578% |