Pod Insights The $100 MBA Show The Growth Rate Most Businesses Should Actually Aim For About this episode Most entrepreneurs obsess over speed, chasing growth without a clear strategy. But the truth is, growing too fast can be just as dangerous as not growing at all. The real question isn’t if you should grow, but how fast your business can grow without breaking. This lesson breaks down the exact growth rate most businesses should aim for, especially in the early stages or under seven figures in revenue. Omar reveals the proven 3-step framework he has relied on for over a decade to guide his own companies. It’s all about steady progress, keeping your business healthy, and building a foundation that lasts. If you want to know the growth rate most businesses should actually aim for, this episode gives you the answer. Press play to hear Omar’s framework and learn how to scale at the right pace, building a business that grows strong and sustainable. MBA2754 The Growth Rate Most Businesses Should Actually Aim For Recommended episode to explore:3 Ways To Force Yourself To Take Action Watch the episodes on YouTube: https://lm.fm/GgRPPHiSUBSCRIBEYouTube | Apple Podcast | Spotify | Podcast Feed Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
Transcript 0:00 Speaker 00 Today's episode is supported by Cash App. When it comes to Bitcoin, you may be surprised to learn that it was invented way back in 2008. But you still haven't made the jump to Bitcoin yet? Cash App makes it easy. When you buy Bitcoin on Cash App, they hold real Bitcoin for you, one to one, and you can withdraw it anytime. It works more like real money and less like something locked in an account. No extra steps, no restrictions, just access and control when you need it. With Cash App, you can actually do that. For a limited time, new customers can get $10 added to their balance. Just use code BITCOIN10 when you sign up. And, don't forget this part: send at least $5 to a friend in the first two weeks. Terms apply. Cash App is a financial services platform, not a bank.
0:45 Speaker 00 Banking services provided by Cash App's bank partners. Bitcoin services provided by Block Incorporated brand. For additional information, see the Bitcoin disclosures at cash.app/legal/podcast. Small business owners, listen up. You started your business, but you can't do it alone. And that means you have to hire people to help. That's where Justworks comes in. Justworks is a payroll, benefits, and global hiring platform to unburden your brain from all the complicated small business stuff. They handle the things you can't afford to get wrong, so you don't have to worry. So you can focus on the parts of running a business that you enjoy, knowing everything else is running smoothly. You don't have to worry when it just works. Let's clear something up right away.
1:30 Speaker 00 In business, you're either growing, or you are dying. There is no in-between. Costs go up, competition improves, expectations rise. And here's the thing: growing too fast can kill you just as quickly. The mistake most people make is chasing growth without a strategy. So today, I want to give you that strategy, with a simple three-step framework for how fast your business should actually grow, without going broke, without breaking your business, or losing all hope to live. This is the same framework and numbers I have used over the last 14 years to grow my most successful businesses, from SaaS to my education company, to my media company. And each of these steps are important, but step three is the most crucial
2:15 Speaker 00 if you want to avoid failure creeping up on you and surprising you and making you go out of business.
2:27 Speaker 00 Welcome back to the $100 MBA Show. I'm your host, Omar Zenhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business.
2:40 Speaker 00 I got a quick favor to ask. If this show has helped you in any way, leave me a quick review. You could do so wherever you listen to podcasts. This helps me and my team reach even more people who need the same no-fluff, practical business advice that you're getting from the show. It only takes a few seconds, but it makes a huge difference. Thanks for being a part of our journey to help others on their journey. Let's start with step one: Measure Growth on the Right Timeline. This is where most people go wrong at the start. If you're early-stage, if you're under seven figures in revenue, monthly growth tracking will mess with your head. Trust me, I know. Why does this happen? Because there's just too much noise and there's too much emotion
3:24 Speaker 00 when you go month to month, and there's just not enough data. One slow month can feel like a failure, and one good month can feel like you're a genius, right? Neither is true. What you should track instead is quarterly growth. Once you go past a million dollars in revenue, then you can go monthly. But at the start, quarterly gives you enough time to see real trends, to see if you're moving in the right direction. It has enough room, too, to test ideas for a three-month period. There's enough distance from the day-to-day chaos for you to actually see if growth is really happening. Quarterly tracking keeps you rational and not reactive. Okay, you're really starting to understand that, okay, what I'm doing today is going to impact my business in the next three months,
4:09 Speaker 00 and we're going to see that in that quarterly growth period. Now again, once you cross that million dollars in revenue, then, and only then, does monthly growth really start to matter? Because now you have small percentages that will equal big dollars. You have more at stake here, and you need to have a closer eye month to month. And efficiency matters more here. Also, cash flow timing becomes critical when you're at that million-plus month. So as a rule of thumb, if you're early stage and making less than a million dollars annually, then you want to track your growth quarterly. Now, if you're making more than a million dollars in revenue a year, then you want to track monthly. This creates a simple, calm, sustainable system for you to track growth. Well, then you might be saying to yourself, well, okay, Omar, but how
4:54 Speaker 00 much should I be growing each quarter? That leads us to step two. Step two is all about the number, the actual number that will move the needle for your business. Now, I want to give you a number that actually makes sense. Now, every business is different, and maybe your number is a little higher, a little lower, but I want to give you something to work with. Okay, so I have found that 10% growth per quarter is a good place to aim for at the start. And then you can adjust. Maybe you're blasting past that, and then you can adjust your quarterly growth number. But the point here is that 10% is actually a good number, and you're going to see why, because the math will math. 10% is not flashy, it's not reckless, but it's still good enough of a challenge.
5:36 Speaker 00 And more importantly, you're playing offense. A 10% per quarter compounding does something powerful. Your business will double roughly every two years, which is a good target. So you don't have to wait five or 10 years for your business to double. Two years, 24 months. Now, here's why this matters. 10% per quarter in growth roughly equals 46% growth per year. Compounding accelerates fast when you're consistent. And that's why quarter over quarter, you're going to start seeing this growth just exponentially grow. So this is what it looks like in real life. Say, for example, you're doing $250,000 in revenue a year. In just two years, you're going to make half a million
6:16 Speaker 00 dollars in revenue if you maintain that 10% growth quarter over quarter. And this is why I like 10% because it's achievable to do consistently. You want to do at least 10% every single quarter. Maybe some quarters, you're going to go 15 or 14, and your numbers will even go higher. But I'd like to go for at least 10%. So I know that that is the finish line for every quarter. I like steady, intentional improvement. Over drastic improvement because when you have drastic growth, you have to service that growth, meaning you have to hire, you have to find more supply, you need to build out better infrastructure, whether that's servers or even a physical space.
6:58 Speaker 00 The point here is that when you grow steadily 10% quarter over quarter, you can predict the growth and the things you will need to service that growth and able to support your business. And here's the part most people miss. 10% quarterly growth is not about doing more and hustling harder. It's about doing things slightly better each time. That means doing a little bit better with converting your customers into a sale, right? Converting a little higher, retaining a little longer, keeping your customers for longer, charging a little bit more, removing a little bit of friction for your customers when they use your product or service. When you're stacking those gains, time does the heavy lifting for you. What you want to do is you want to create a business that time is on your side,
7:42 Speaker 00 that if you just consistently do what you're supposed to do, as time goes on, your business starts to grow, just like you're investing in the stock market. This is how serious businesses scale without imploding. Today's episode is supported by Rosetta Stone. I absolutely love Rosetta Stone because it's helping me learn Italian faster than I can ever imagine. Why do I want to learn Italian? Well, who doesn't love Italy? But of course, Nicole's family is Italian and I love to have some quick Italian conversations with her mom. And Rosetta Stone just came out with Rosetta Stone Sapphire, their biggest launch in over a decade. One of the coolest features is chat missions, which turns conversation practice into a game. With chat missions, you're put in interactive scenarios and given three objectives.
8:27 Speaker 00 A mission to accomplish, like asking how much something costs, ordering a cold brew coffee, or getting a wifi password. Along the way, you get real-time corrections and feedback to help you sound more natural and confident. It's a supportive way to build confidence before putting your language skills to use in real life. I've been using Rosetta Stone for over two years and I actually can have some small Italian conversations with Nicole's mom now. Just the other day, she asked me, when are you traveling? And I said, dopo domani mattina. Which means after tomorrow morning. She was incredibly impressed I was able to answer in Italian. How could you put a price tag on a happy mother-in-law? If you want to take your language skills to the next level, don't wait to try Rosetta Stone Sapphire. The $100 MBA listeners can get 20% off the Rosetta Stone Sapphire
9:10 Speaker 00 subscription when they sign up today. This gets you access to Rosetta Stone Sapphire in 25 languages. Support for today's episode comes from Square. You probably know Square is the thing you tap your card on at your favorite coffee shop, restaurant, salon, or local store. But for the person running that business, Square is a whole lot more than a way to get paid. Square brings the tools you need to run and grow your business together in one system. From payments on appointments, to staff, inventory, sales, and customer relationships. Whether you're selling lattes, cutting hair, detailing cars, running a restaurant, or starting something new. Square keeps your business tools working together so you can focus less on managing the moving parts and more on what's next. And right now, listeners
9:51 Speaker 00 can get up to $200 off Square hardware when you sign up at square.com/go/mba. That's S-Q-U-A-R-E.com/go/mba. Visit Square to get started because running a business is complicated enough. Your tools don't have to be.
10:10 Speaker 00 If this episode's resonating with you, you want to make sure you subscribe to the show because I have an upcoming episode that I'm working on that's all about the debate of remote work versus office work. I'm doing this research right now. We find out the real reason CEOs in big companies these days hate remote work and want everyone back into the office. And why I'm doing the same, why I'm building a local office here in Sydney. Subscribe so you don't miss it so that you get it immediately in your feed when it comes out. Step three, and this is the most crucial step, and this is the part that people don't like to hear, but it is critical. And that you need to remember that if your business is flat quarter over quarter, that means two quarters in a row, six months in a row,
10:54 Speaker 00 flat, no growth, that's not stability. That's decline in slow motion. At this point, in your mind, in your business, you should be firing the alarms. Right? Everything should be red alert right now because this is the beginning of the end. If you don't do something about it, trust me, I know I've seen businesses go down. My own businesses when I first got started started out where things are just flatlining. They're not growing. They're just the same and I didn't take different types of actions to really address this issue and therefore the business tanked. Now you might be saying, why does this happen Omar? It's just flat. I'm not like declining. I'm not getting less sales. Well,
11:33 Speaker 00 let me tell you why, because costs go up over time, competition improves, customer expectations start to rise as time goes on. Technology keeps moving. Standing still is losing ground. You have to be gaining ground just to stay afloat. And I'm telling you right now, I don't want you to get it twisted. Growth doesn't always mean, you know, running more ads or creating more content or adding more stress on your plate. Right? No, it often in my experience means you just need to have better retention to keep your customers coming back for more, better pricing, better offers, better focus with you and your team. In my opinion, if you have two quarters in a row that is flatlined, you have no growth, you need to call all hands
12:17 Speaker 00 meeting with all your team members and say, guys, we're at war. It's wartime right now. We need to do everything we can to have a growth quarter next quarter and we need to grow back at 10% minimum. Let's do what we need to do. What are some things that we can do so that we can get more customers, retain more customers, improve our product or service, improve our awareness, have better customer support. You really got to focus and make something happen because a third quarter of flatlining could be a death sentence. Listen, I'm not here to make it all doom and gloom and depress you. No, but I'm giving you a warning that I never got when I got started and I wasted a lot of time and money in businesses that failed and I didn't
12:59 Speaker 00 see the early warning signs and the numbers don't lie. This is why it's so important to track your growth because when you track your numbers, you can see in black and white if you're doing well or not. And if you're not doing well, you know, you need to take action. And remember the goal isn't just revenue here. You want to make sure That you're profitable. You want to make sure that you have a great team that you love working with every day. You have a great culture that is sustainable, that you're building a great product that your customers love, that you're actually making an impact on the world so that you're enjoying what you're doing. And the reason why I say 10% and now you should be growing 50% month over month. No, a lot of people will say that, and I think that's actually bad advice. Sustainable growth gives you time to think. It gives you room to breathe and margin
13:42 Speaker 00 for mistake. So that if you make a mistake, if you make a bad choice, it's not disastrous. And that's how real businesses last. I want you to do an experiment after this episode. Go on chat GPT, go on to any AI app you want to use and do a little research on companies that are over 100 years old. Okay, companies have been around for a long time or around that time. Let's say, for example, like Coca-Cola and ask the AI, how much has this company grown on average month over month or quarter over quarter or year over year? And you could do the math. The point here is that you're gonna notice that it's not exponential growth quarter over quarter or month over month. You're gonna find out it's small growth over time. And the reason why they're able to sustain themselves is because of that. Plenty of businesses boomed
14:27 Speaker 00 and grew exponentially in a short period of time and are gone now. They're ancient history. So you gotta be wary of the fact that I need to grow, but I need to grow in a sustainable way. Before I go, I want to leave you with this. If you take one thing from this episode, let it be this. You don't need explosive growth. You need consistent growth and you just period need growth. Okay, no Stacey's. There's no Stacey's in life and in business, right? You don't stay the same. You're either growing or you're dying. So make sure you're on the offense and you're growing. Small gains applied relentlessly every single quarter or every month will beat big swings every day of the week. The bottom line is no growth is the real danger. So make
15:12 Speaker 00 sure you're always in the plus column. If you want to turn what you learned today into action, you need to check out an episode that we published earlier this year called three ways to force yourself to take action. Because in that episode, I show you step by step how to get off your rear end and make things happen in your business. Because growth doesn't come from knowing, it comes from doing. Thanks so much for being a subscriber and being a part of our community here at the 100 MBA. Keep growing deliberately.
15:43 Speaker 00 If you found today's episode helpful and you want more practical business lessons to help you start, grow, and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify, or wherever you listen to podcasts. By hitting subscribe, you get our next episode automatically, and it's the best way to support the show. It's absolutely free, and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.
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