Jump to content

Sales Growth Rate


Recommended Posts

Hi Folks-

Long time reader, first time poster! I look forward to making a formal introduction soon...

We are working on testing the honesty of some of the projections in our BP. To that end, I was wondering if anyone would be willing to share, on a percentage basis, their annual revenue growth, especially years 3-5, and how it was accomplished (self-distrib, wholesalers, line extension, etc). Thanks in advance for any feedback!



Link to comment
Share on other sites

  • 1 month later...

The typical way to evaluate business plan projections is to do a sensitivity analysis. That is, how much does a change in sales change the net profit.

You can do a monte carlo simulation, but that's overkill in most cases.

Doing a pessimistic, optimistic, and most likely scenario is probably good enough.

You'll need to tie it all back into pro forma balance sheet and income statements. As sales go up, so does your net working capital requirements. That means you'll need lots more cash, and you'll have to get it from somewhere. It's typically not possible to sustain high growth without external financing.

About 60% of bankrupt companies had positive net incomes. So it's pretty easy to "grow yourself to death" if your product is popular.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...