July 22, 2004 -- Things are looking good for companies growing fast, but, while predicting a rosy future, chief executives officers are approaching the road ahead with caution.

Interviews conducted by PriceWaterhouseCoopers (PWC) with the CEOs of 392 of the fastest growing privately-held companies, as identified by media sources such as the Inc. 500, revealed that 73 percent believe the current economic upturn will last two to three years or longer.

At the same time, CEOs are focusing on the here-and-now, with two-thirds using a planning cycle of a year or less. The remaining group is operating from a plan that only covers the next two-to-three years.

"I see behavior that suggests that people believe we turned a corner," said David VanEgmond, head of PWC's Private Company Services Detroit office, referring to new hires and capital investment. "People see good signs, but they're still not willing to look forward too far."

Reaching the short-term goals they've set for themselves is believed to be well within reach for most of those surveyed. Nearly 90 percent said their ability to meet their business objectives over the next 12 to 24 months is either "excellent" or "good." This optimistic group expects revenue growth to average more than 20 percent in the next year.

The good times come with challenges, though, with an overwhelming amount raising concerns about finding the right help. When asked about what new risks they saw arising within the next two years, 82 percent cited hiring new employees and 72 percent worried about increased investment in training.

"Employees are such a significant element of a small company's cost structure," said VanEgmond. "We're talking not just about salary, but benefits and training. If there is any level of uncertainty about the future, businesses think about these costs as the costs of letting a person go."

VanEgmond observed that the trend of "cautious optimism" and the general wariness towards aggressive spending and hiring at a time when the economy is humming along comes in stark contrast to the exuberance of the so-called New Economy.

"Maybe," he said, "it's fair to say that lessons were learned."