How the 2005 Inc. 500 Companies Were Selected
BY Jim Melloan
This year's list measures revenue growth from 2001 through 2004. From January 27 through May 15, we accepted preliminary qualification forms that were filled out online at Inc.com. We also solicited applications from companies that we thought had a good chance of making the list. After the preliminary qualification period was up, we contacted the leading contenders and asked them to fill out more detailed applications.
Entrants had to have four full years of sales, and they had to be U.S.-based, privately held, and independent -- not subsidiaries of other firms -- as of December 31, 2004. (Since then, a number of companies on the list have gone public or been acquired.) This year we raised the minimum revenue required in the base year from $200,000 to $500,000. The last time such a change was made was in 1995, when the minimum was raised from $100,000 to $200,000. We felt the change was necessary to ensure that the high growth rates on the list build on a substantial base.
By the way, there's some confusion about the right way to express the period being measured. While it's true that there are four years' worth of revenue figures to look at in measuring growth from 2001 to 2004, the period between the points -- the end of 2001 through the end of 2004 -- is a three-year period, so "three-year growth" is the proper term, and we use it in this issue.
With this list we have completed the transition begun last year to measuring growth over three years instead of four, so as to better capture today's quick-moving economy. Also toward that end, we are moving up publication of the 2006 Inc. 500 issue. Preliminary qualification forms are available now at Inc.com and will be through the end of this year.