What to do next
Show the working, step by step
Where I used this
At Praava Health I directed growth from 2021 to 2023: about 45% a year overall and about 57% a year in consumer (B2C) revenue.
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Read a growth rate carefully
- The base. Growth from a small base looks fast. Doubling 10 customers is easier than adding 10% to 10,000.
- Price or volume. Revenue can grow because prices rose while customers stayed flat. Check both.
- Seasons and one-offs. Compare the same season each year, and take out one large deal before calling it a trend.
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Growth slowing, or not fast enough for the plan?
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Questions
How do you calculate CAGR?
Divide revenue now by revenue at the start, raise it to the power of 1 over the number of years, and subtract 1. Growing from 1 million to 2.1 million over two years is about 45% a year.
How do monthly and yearly growth rates relate?
They compound. 3% a month is about 43% a year, not 36%, because each month grows on top of the last.
What is a good growth rate?
It depends on your stage and market. A useful test is to compare it with how fast your market grows: growing faster means you are taking share.