Growth Hurdles
Certainly, it's hard to hold on to customers that are going through layoffs and mergers. But for the first time, CEOs tell us that "customer acquisition" is the biggest barrier to business growth. Incidentally, on this year's list fewer companies rely on "Fortune 1,000" customers as their main source of revenues than on lists from the past three years.
Percentage of companies that were limited by difficulties in
|
Class of
2001 |
Class of
2000 |
Class of
1999 |
| Acquiring new customers |
34% |
16% |
12% |
| Recruiting enough employees |
25% |
50% |
47% |
| Getting enough capital |
17% |
16% |
16% |
| Finding the right strategic partner |
7% |
4% |
5% |
| Remaining profitable |
6% |
3% |
4% |
Growth Accelerators
Does getting venture capital at the start increase a company's chances of achieving hypergrowth? There's no doubt about it. While the average five-year growth rate among this year's Inc 500 was 1,933%, the growth rate among VC-backed companies on the list was more than double that. Other correlations, though not scientifically proven, raise some interesting issues. For example, the companies whose CEOs took brief vacations fared better than those with CEOs who took more than 10 days off. But both groups experienced above-average growth.
Average five-year growth rate among the 2001 Inc 500 that had
Venture-capital funding at start-up: 4,619%
CEO with an M.B.A.: 2,542%
CEO who took 5 days or fewer of vacation yearly: 2,385%
Open-book management: 2,283%
CEO who took more than 10 days of vacation yearly: 1,983%
What's Happening to Employee Benefits?
News flash: according to the survey information we've gathered on the 2001 Inc 500, the tight labor market has loosened. You knew that, but our data reflect the new reality in two ways. First, recruiting is no longer cited as the number one factor limiting growth, as it was by the companies that made the 2000 and 1999 lists. Second, the percentage of companies offering two key employee benefits -- bonus plans and profit sharing -- continues to decline. And two popular benefits without direct price tags -- flextime and telecommuting -- are offered by fewer companies this year than last.
Percentage of companies offering
|
Class of
2001 |
Class of
2000 |
Class of
1999 |
| Bonus plans |
67% |
69% |
81% |
| Profit sharing |
43% |
47% |
48% |
Percentage of this year's companies that offer full-time employees
Health insurance: 97%
Retirement plan: 84%
Life insurance: 72%
Disability insurance: 71%
Flextime: 64%
Telecommuting: 51%
Tuition reimbursement: 45%
Job sharing: 23%
Sabbaticals: 16%
Child-care services: 3%
Where Sales Come From
Percentage of companies whose main source of business is
|
Class of
2001 |
Class of
2000 |
Class of
1999 |
| "Fortune 1,000" companies |
40% |
48% |
42% |
| Small to midsize companies |
37% |
31% |
33% |
| Consumers |
12% |
10% |
12% |
| Government |
10% |
9% |
12% |
| Nonprofits |
2% |
1% |
1% |
Note: Numbers do not add up to 100% because of rounding.
Seeing Through the Web
Last year's class of Inc 500 companies was betting big on the future of E-commerce. In fact, 61% thought developing a strategy for selling online would be critical to survival. Ahem, things have changed, and more than a little. This year, only 44% feel as strongly about hanging a shingle online.
Percentage of 2001 Inc 500 companies with Internet sales: 25%
Percentage of overall revenues that come from Internet sales among those companies: 13%
What's Ahead
The Money Hunt, 2002
When it comes to capital, Inc 500 execs aren't shy about going after it. However, only 40% of this year's CEOs plan to raise money in the next year. (In contrast, 63% of the 1996 companies aimed to raise money in '97, and 47% of the 2000 companies planned to raise funds this year.) And although 89% of the capital seekers on this year's Inc 500 expect to bring in more than $100,000, 95% of the money hunters on last year's list thought they'd bring in that amount. Still, only 13% of responding CEOs tell us they're even concerned about the current credit crunch. More likely, the Inc 500 will finance themselves with internal cash flow, as they've always done, until the terms of the deals are more to their liking.
