Who said trees don grow to the sky

In reality, your business will not continue to grow forever. As your business progresses, there are factors that come into play that will cause your business to pull back. Generally speaking, the larger a company becomes the more difficult it becomes to achieve a high growth rate.

To put things into perspective, there are valuable lessons a business owner can learn from observing trees. Trees sway and move with the wind. They survive storms and other harsh elements, but are strong enough not to break.

It is critical that a business move with the times and adjust accordingly to stay on course without compromising values or integrity. No matter how short or tall a tree is, it tends to spring back to action after an unfortunate incident. Similarly, a business must possess flexibility and be ready to bounce back after facing challenges and experiencing the peaks and valleys that come along with owning a business.

It continues to grow at a slow and steady pace, inching towards the sky. The same should hold true for a business—continuous growth by taking small steps every day and inching upwards gradually. A business that grows at a healthy rate, is better positioned to sustain an unexpected shortfall. As time moves forward, gravitational forces make it harder and harder for the market to grow at the same rate as it did in years prior.

For stocks, gravity is their valuation. As the cycle matures, stock prices move from undervalued to fully valued and at times overvalued, and investor expectations for growth should inversely move from high to moderate. That being said, all stock market cycles are unique and it is difficult to predict exactly where we are in the cycle. However, we can look to valuation gravity to help us set expectations for future returns based on what we have seen in the past.

With that said, the average may be somewhat misleading here because it is pulled up by a high outlier return. This post is presented for illustrative and discussion purposes only. Investors are advised that their investments are not guaranteed, their values may change frequently and past performance may not be repeated. From time to time, markets may experience high volatility or irregularities, resulting in returns that differ from historical averages. This volatility can lead to returns that are lower than the historical annualized averages or may also result in losses.

Under no circumstances does this post suggest that you should time the market in any way and no investment decisions should be made based on the content of this post. A business will not continue to see increasing revenue growth forever. At some point, companies, or even the marketplace, matures to where it cannot support a soaring growth rate.

Product, customers, and markets will not continue to grow simply because they have always grown. A growth mindset can mean striving for business growth that can be market share or net profit as opposed to top line growth. If a company sales decline by ten percent but the overall market declines by twenty percent, effectively there was market share growth.

Mangrove trees are an example of growth not measured in height. They are part of a complex biological ecosystem. In the water beneath their roots, they provide food as well as habitat protection for fish and other aquatic creatures.

Mangroves root systems also play an especially important role in protecting coastlines from storms and rising waters. A spreading root system helps balance weight and maintain an anchor to the ground. In many cases, a tree will grow only fast enough to support itself and carry out its normal functions.

Trees offset for heavy growth by producing reaction wood, formed in place of normal wood. Reaction wood, also called compression wood or tension wood, is much denser and stronger than normal wood.

It balances the forces of gravity and helps push the tree back towards level or balance. Overcoming adversity is akin to producing reaction wood.