How fast can you grow your company?
Based on most recent data released by the U.S. Department of Commerce Bureau of Economic Analysis (preliminary release with their second release due on February 26) with numbers crunched by TradingEconmics.com, the U.S. economy as a whole grew at 2.4 percent in 2015.
A better benchmark for Inc. readers, most of whom run small and mid-cap companies, is the data compiled and crunched by Sageworks, tracks the growth rate of privately held companies in the United States.
According to Sageworks, in 2015 the average privately held company grew by 7.3 percent. That number drops to 7.01 percent for privately held companies in the U.S. with sales under $10 million per year.
The fastest growing company on the Inc. 5000 list for 2015 was Ultra Mobile, with a growth rate of a whopping 100,849 percent, while the slowest growing company on the Inc. 500 list was Vacuum Systems International with a growth rate of 43 percent (still roughly 6 times faster than the average privately held company.
At various business conferences I keynote at I get asked this question all the time: how fast can I grow my company. Often this question is followed by, "But if I grow fast, I'm afraid my business would even further take over my life."
While this is a valid concern I wanted to put this into perspective.
The average annual growth rate of our business coaching clients is 64.2 percent. Here's a sampling of ten of them.
Company Annual Growth Rate
Alaska Financial (Financial Services) 60.5%
Blackwell Realty (Real Estate Services) 308.7%
Blossom Bariatrics (Medical) 50%
City Global (Product Development) 38.7%
Colorado Computer Support (I.T. Services) 84%
Ensunet Technology Group (I.T. Services) 82.8%
Hostek.com (Web Hosting) 29.3%
Quality Property Maintenance (Repair & Maintenance) 23.8%
The Fireplace Place (Specialty Retailer & Hearth) 69.8%
VAPEHAPPY (Online Retailer) 36%
All of them enjoyed growth at several times the average for privately held companies in the United States. But here's the most important point--at the same time each of these companies grew, they also radically increased their Owner Independence Index (OII).
The Owner Independence Index is a simple measure of a company's reliance on the presence of its owner for the business to function smoothly and successfully. The less reliant the company on the owner, the greater its Owner Independence Index. The change over time is the increase (or decrease) of that company's OII.
Here is that same list of ten companies, only this time, with the cumulative percentage increase in each companies' OI Index for the same period of their annualized growth rate.
My point is that for most small and mid-cap companies, it is not only possible to grow at 25 percent, 50 percent, even 100 percent or more per year, but done right, this growth doesn't require the owner to sacrifice his or her life.
In fact, the only sustainable way to grow your company is for you to also build your team, systems, and internal controls so that your business produces more--independent of you or any one other key player.
Let these numbers stretch you to reach for more growth, and also push you to make the growth you reach for sustainable and smart, by reminding you of the importance of systems, team, and sound internal controls.
For a further resource to help you scale your business the right way, click here to access a free tool kit with 21 in-depth video trainings to help you scale your business and get your life back.