The normal growth rate for a listed company is 10% pre tax or 6-7% post tax profit.

The normal growth rate for a listed company is 10% pre tax or 6-7% post tax profit.

A company is a long-distance runner, not a sprinter. By examining the income statement, you will find that the company’s revenue and net profit have been steadily increasing over the past 10 years.

An article in the Financial Analyst Magazine confirms that the fastest growing companies typically come to a sudden halt due to rapid growth. In the long run, a 10% pre tax (or 6-7% post tax) profit growth is sustainable.

However, the 15% rapid growth that many companies have set for themselves is just an illusion. Higher growth rates (or sudden rapid growth within 1-2 years) will inevitably slow down, just like an inexperienced marathon runner trying to complete the entire race in a 100 meter sprint.

Insight, slow is fast. Enterprises need to live long, not grow fast. We want to live for 500 years, not become a Fortune 500 company.