One Hundred, Of The Fastest Growing Privately Held Companies In The United States.

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In the fall of 1971, Bill Nicolai was camping in Washington State's North Cascade mountains when his tent collapsed and he almost froze to death. That winter, Nicolai designed the Omnipotent -- a highly durable waterproof tent that became the first product of Early Winters, a Seattle retail and mail-order business whose sales will easily top $8 million this year.

About the same time that Nicolai was coming to grips with the perils of backpacking, Jeff Stoops was taking his first step into the trucking business. With his father as a silent partner he purchased a tractor in 1971. The 10-wheel rig became the first vehicle in an Indiana-based transcontinental fleet with more than $15 million in revenues this year.

While Nicolai and Stoops were preoccupied with tents and trucks, Stanford B-School graduate Chuck Schwab launched his own brokerage firm. Form a small, no-frills office in San Francisco's financial district in 1971, Charles Schwab & Co. has ticker-taped its way to $46 million in revenues this year, with 180,000 clients served by 31 offices coast-to-coast.

Nicolai, Stoops, and Schwab are all chief executives of companies that qualified as charter members of the INC. Private 100.

Statistically, the INC. Private 100 is a precedent-setting roster of 100 of the fastest-growing privately held smaller businesses in the United States. This list represents an elite club whose members have generated sales gains ranging from 972% to 9,372% over the past five years. (Six of these companies are profiled briefly beginning on page 46.)

The INC. Private 100 share a number of characteristics besides meteoric growth. The median sales of the group in 1980 was $5.9 million; 85 of the 100 companies were founded after 1970; and 98 boast black ink on their bottom lines. In addition, 73 of the 100 are service companies, and only 22 have grown through acquisition. These last two characteristics -- service and internal growth -- are in sharp contrast to their publicly owned cousins on the INC. 100 (May 1981), the majority of whom are manufacturers whose growth during the past five years was assisted by acquisitions.

Ownership aside, the primary differences between the INC. Private 100 and the INC. 100 are size, growth rate, and diversity. The closely held firms tend to be much smaller. Overall, they are about one-fifth the size of the fastest-growing public companies. Some 70 of the Private 100 firms are still below the $10-million mark in volume, versus 23 among the INC. 100. Only 7 of the private firms, as opposed to 55 of the public companies, have surpassed $25 million in annual sales.

The private companies also outpace the public ones in overall performance. From 1976 through 1980, sales of the Private 100 soared by 1,974%, resulting in a compound average annual growth rate of 113%, better than the INC. 100's compound annual rate of 89% and an outstanding achievement when measured against the 14% eked out by the country's 500 largest corporations.

The Private 100 are far more diverse than the publicly held companies, both in types of business and in geographic location. While the public companies represent a wide range of manufacturing and service businesses, the majority fall within three major industry clusters: computer and business-equipment makers, oil-and-gas producers, and manufacturers of medical products. And although there are INC. 100 companies in 25 states, the majority have headquarters in California, New York, Colorado, Texas, or Minnesota.

Not surprisingly, the largest segment of manufacturers in the Private 100, six firms, are in the computer field. Beyond that, the roster includes companies that make products ranging from Easter-eggkits and pet-food flavors to road-repair machinery and ammunition systems for the Air Force.

The 73 service companies on the list are even more diverse. The two largest groups consist of seven software/data processing businesses and seven hightech engineering support firms. Beyond those, the list includes a handful of personnel specialists, four restaurant chains, and three publishers.

The five wholesalers in the Private 100 are companies that sell electrical supplies in Wyoming, furniture in Washington, drugs in Kansas, wood stoves in Connecticut, and wine in Arizona. Overall, the Private 100 are headquartered in 36 states and the District of Columbia; California, Texas, Illinois, Massachusetts, and North Carolina are the leading home states.

While the statistics reflect the explosive growth and diverse nature of the INC. Private 100, the true significance of this elite group is the human element. Behind each entity is an entrepreneur whose ingenuity and perseverance has led to outstanding growth. That growth must be measured in terms of people as well as sales.

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