Growing The Business: Growth Assumptions
Lesson summary:
The lesson discusses whether or not to continue investing in a business that lost money in its first year. To make an informed decision, projections are made about the company’s potential growth over the next few years. The assumption is made that all the cash generated by the business will be used to buy more lemonade stands to expand the brand, and no money will be taken out or paid as dividends. The plan is to increase the price of lemonade by five cents each year and sell 5% more cups per stand per year, resulting in built-in growth assumptions.