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Tom Noon

The Law of Compounding

blog2We have all seen this image at some point in our lives- it is the power of compound interest.

Notice the hockey stick curve? This is the amazing benefit of a dedicated month after month strategy of saving.

But did you know this principle has impact in other areas of life?

Yes, the law of compounding works in many areas of our lives!

Take my family for instance.I have 4 children and 11 grandchildren. It took just under 20 years to get the 4 children. In another 20 years, 11 grandchildren (and growing) In 20

more years I could have between 20 and 40 great grandchildren; and maybe 100 great-great grandchildren 20 years later.

This is the law of compounding at work! Doing positive things over and over in such a way that the result is saved.

The application to business is the benefit of a Continuous Improvement Process.

Basically, you make continuous deposits of new systems and processes to improve the operations of

your business.

Rather than just reacting to all the crazy stuff that comes in the door day by day, you begin to catalog and manage issues and if they are important enough for you to pay

attention to them, you figure out how to solve the issue forever. This will require a system or process change. Problem solved, value of the business increased. Basically it’s a business value saving program.

Over time through the law of compounding the value of your business grows and grows and multiplies just like the interest table above.

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