THE COMPANIES
How to Build an Inc. 500 Company
Pssst. Want to see your company's name on the Inc. 500 list in a few years? If your answer is yes, it pays to keep one word in mind: computers. Sure, all kinds of companies make our list. You can find everything from an ice-cream maker to a pizza chain on the 1997 Inc. 500--if you look hard enough. But the truth is, ordinary businesses like those are underrepresented on the Inc. 500. Year after year, the list includes a disproportionate number of companies that are capitalizing on the most recent trends in digital technology. This year that's more true than ever: a whopping 36% of the companies on the 1997 list report that they're in some facet of the computer industry. Although that's the highest percentage in the past decade, computer-related companies have always made up at least 20% of the list during that time. And throughout the history of the list, companies like Microsoft, Oracle, and Gateway 2000 have gone on to gain national prominence after appearing on the Inc. 500 list.
What's going on here? Shouldn't an industry dominated by the likes of Microsoft at some point become inhospitable to new entrants? To judge from the Inc. 500, that hasn't happened so far. Because of its continuous change and development, the computer industry is a driving force in our economy. Each technological advance spawns a crop of growth companies racing to exploit a new market. Some of those growth companies, in turn, make our list in their early years.
If computers are a constant on the Inc. 500, other things do change with time. One such long-term shift: over the past 10 years, the proportion of retailing companies on the list has shown a gradual decline. Last year and this year, that proportion dropped to what may be an all-time lowof 5% of the list. (That's less than half the percentage of retailers that have appeared on the list in some earlier years.) The drop is one sign that, in this age of superstore chains, traditional retailing may have become less friendly to new privately held growth companies. Then again, who knows if that trend will last? Industries keep changing--and change always spells opportunity for smart entrepreneurs. -- Martha E. Mangelsdorf
| The Inc. 500 by Sector |
| Retail |
5% |
| Distribution |
9% |
| Manufacturing |
27% |
| Service |
59% |
| The Inc. 500 by Revenues |
| % of companies with revenues of-- |
| Less than $5 million |
27% |
| $5 million to $9.9 million |
27% |
| $10 million to $19.9 million |
25% |
| $20 million to $29.9 million |
9% |
| $30 million to $49.9 million |
6% |
| $50 million or more |
6% |
The Inc. 500 by Age
The average company made the list at the age of 9
*Numbers do not add up to 100 because of rounding.
| The Inc. 500 by Industry* |
| Computers |
36% |
| Business services |
22% |
| Consumer goods and services |
9% |
| Telecommunications |
8% |
| Health care |
5% |
| Construction |
5% |
| Industrial equipment |
5% |
| Financial services |
4% |
| Media |
2% |
| Environmental goods and services |
2% |
| Transportation |
1% |
THE START-UP YEARS
Source of Idea for Company*
% who say it came from working in same industry: 60%
*Out of 428 respondents
Who helped in coming up with the idea? No one: 35%
*Out of 396 respondents
**Includes overseas investors, employees, insurance, government grants, and other sources.
| Where the Money Came From |
| % of CEOs* who tapped-- |
| Personal savings |
79% |
| Family members |
16% |
| Partners |
14% |
| Personal charge cards |
10% |
| Friends |
7% |
| Bank loans |
7% |
| Angel investors |
5% |
| Mortgaged property |
4% |
| Venture capital |
3% |
| Other** |
8% |
| Top Four Sources of Inspiration |
| Partners |
20% |
| Future customers |
18% |
| Industry colleagues |
14% |
| Family members |
7% |
*Out of 412 respondents; numbers do not add up to 100% because of rounding
| Revving Up |
| Length of time from idea to start-up* |
| 6 months or less |
59% |
| 7 months to one year |
19% |
| 13 months to two years |
12% |
| More than two years |
9% |
Home Economics
% who started business at home: 50%
