Originally Posted by Katsunami
It seems that many companies and many people still do not understand that it is impossible to sustain the same growth rate. Let's say, you're growing with 10% each year, and you started out selling 100 units in 2010.
Then you'll need to sell:
100 * 1.10 = 110 in 2011 (+10 units)
110 * 1.10 = 121 in 2012 (+11 units)
121 * 1.10 = 133.1 in 2013 (+12.1 units)
Or, generally:
100 * 1.10^(year-1) = number of units to produce each year.
You'll need to sell more and more each year... and many companies want to actually see their growth rate growing. That's absurd and unsustainable.
In other words:
1.10 ^ x = 2 || (After how many years will a growth by 10% cause the production to be doubled?)
x * log 1.10 = log 2 || ("Take down" x from the exponent)
x = (log 2) / (log 10) || (Set x free)
x = ~7.3
You will need to double your amount of sold units every ~7.3 years, only to sustain a growth percentage of 10%. If you want to grow 15% per year, you'll need to double sales every ~5 years.
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