My co-author [of my new book … still in the final stages of development], Debbie, has just written this article for Entrepreneur.com …
… speaking of entrepreneurs, here is a question that you need to ask yourself NOW before it’s too late:
Is this an opportunity worth pursuing?
After all, time is precious … even more precious than money!
Let’s backtrack a little; let’s assume that you have:
1. Chosen Your Number and Your Date, and
2. Calculated your Required Annual Compound Growth Rate, and
3. Selected your Growth Engine.
So, you have – hopefully – selected your Growth Engine (it could be stocks, it could be a business, it could be real-estate investing, etc.) in the hopes – and need – that it will carry you to Your Number by Your Date.
But, what do you think it will mean if you are wrong?!
Let’s say that you are five years down the track and find that you chose the wrong Growth Engine: it can’t produce enough steam …
… now, if you rerun your calculations, you will probably find that your Required Annual Compound Growth Rate has shot into the stratosphere!
In reality, you have probably blown your chances of every reaching your Number … and, certainly delayed getting there by at least 4 or 5 years.
This ALMOST happened to me.
Except, that I was lucky enough to be challenged by Michael Gerber (in his seminal work: The E-Myth Revisited) to ask myself UP-FRONT: is this an opportunity worth pursuing?
So, I created a business model for my small, but slowly growing business … and found:
I had 5 corporate clients at that time … not bad, I thought for 5 years hard work. BUT, my models showed that I would NEED EVERY SINGLE ONE of Australia’s Top 1,000 Corporations as clients WITHIN 5 YEARS in order for my business to generate the $1.5 million after tax annual net profit that I calculated would be required in order to sell my business in just 5 short years for the $5 million that was my then Number.
What was my likely outcome if I hadn’t performed this relatively simple calculation?
Well, if it took me 5 years to get 5 clients, then the next 5 years should lead to … what? … 5 to 20 more such clients? And, I needed 1,000 … in fact, ALL of them!?
Obviously, unachievable on so many levels that my Number was doomed, if I didn’t do one simple thing:
Change my business plan!
In fact, that’s exactly what I did … unfortunately, twice (because the laws in Australia changed, making my first revision unworkable; thankfully, that problem arose … and, was solved .. within 2 years) … which is why it took me 7 years to $7million rather than the 5 years to $5million as I had originally planned … but, it could have been A LOT worse.
Here’s what to do:
Run the numbers now … see if your Growth Engine can get you to Your Number by Your Date … do it on paper now, rather than finding out in ‘real life’ when it’s already too late. If it can get you to Your Number by Your Date … go for it, what are you waiting for?
But, if it can’t …
… change Growth Engines, revise plans, do ANYTHING, until you find a way that can 🙂