Inc. 500 Reveals America's Fastest-Growing
By: Carol Hirsch
New York (October 20, 2004) --Inc . magazine, the premier publication for small and medium-size businesses, has released its 23rd annual Inc. 500 ranking of the fastest-growing private companies in the country. Wireless service provider InPhonic tops the list, with four-year average annual sales growth of 5,958%. The Inc. 500 Special Issue will appear on newsstands October 26th and will be on display until December 21, 2004.
The companies that made this list have thrived despite continued stagnation in the economy, posting an average year-over-year sales growth of 265%. Inc. 500 companies posted aggregate 2003 revenue of $12.6 billion, and 82% of them were profitable. And while the United States shed 410,000 jobs in 2003, Inc. 500 companies provided employment for more than 70,000 people.
Further demonstrating the resilience of this year's Inc. 500 crop is the fact that 102 of this year's honorees started in 1999--meaning that they weathered the start-up costs of the overcapitalized boom and thrived during the impending bust that was one of the toughest periods for young companies in recent memory.
"The best thing you can say about this year's crop of Inc. 500 entrepreneurs is that they didn't buy into the hype," said Inc. editor-in-chief John Koten. "When people were practically giving away funding in the late 1990s, these companies didn't overextend, and when everyone hit the panic button a few years later, they stayed calm and seized opportunity."
The Inc. 500 ranks privately held companies according to averaged year-over-year sales growth over the past four years. With approximately 75% of all new job creation in the U.S. coming from small businesses, the Inc. 500 is a prescient indicator of the companies and industries that are driving the economy forward. Eighty-five companies (17%) on this year's Inc. 500 say they plan to go public at some point. Over the years, the Inc. 500 has identified the next generation of world-class companies, with Microsoft, Stonyfield Farms, Timberland, Oracle, The Princeton Review, Morningstar, E* Trade, Intuit, and Domino's Pizza all appearing on the list before they became industry powerhouses.
The following are the top 10 companies on the 2004 Inc. 500
Rank Company Location Industry Average Annual Sales Growth 2003 Revenue
1. InPhonic, wireless service provider Washington, D.C. Telecommunications 5,958% $119.4 million
2. uSight, sells DIY software program to small and medium-size businesses Orem, Utah Software 3,283% $27.6 million
3. VCustomer, manages customer call centers in India for U.S. companies Seattle Business Services 2,955% $32.1 million
4. SeamlessWeb, food ordering service links businesses to network of restaurants online New York City Business Services 2,608% $29 million
5. Liquidnet, matches institutional buyers and sellers online New York City Financial Services 2,602% $50.3 million
6. METI, manages reengineering and technology projects for FAA and DOD El Paso Defense Contractors 2,461% $45.2 million
7. Sullivan International Group, offers variety of technical services to large utilities, municipalities, and the federal government San Diego Environmental Services 1,977% $16.2 million
8. Go Daddy Group, builds and registers websites Scottsdale, Ariz. IT Services 1,882% $40.8 million
9. Stentor, creates digital image-archiving systems for hospitals Brisbane, Calif. Health 1,810% $20.6 million
10. Coventry First, creates secondary market for insurance policies Fort Washington, Pa. Insurance 1,675% $268 million
California is the state with the most Inc. 500 companies (67). Florida is second, with 39 firms on the list, followed by Virginia (31), Texas (28), and New York (25). Like last year, Utah has the highest number of Inc. 500 companies per capita in the U.S with 6.8 per million residents--a distant second is Virginia with 3.9 per million residents.
For the second year in a row, Washington, D.C., is the top metropolitan area on the Inc. 500 with 29 companies, although it suffered a drop-off from last year, when it had 41. Boston is second, with 19 companies, followed by New York City (17), Miami (15), and Atlanta (14).
This year's Inc. 500 is the first to reflect the tremendous start-up costs prevalent in the late 1990s economic boom. Of the Inc. 500 founders, 36% had start-up capital of less than $20,000, compared with 48% last year--and 21% reported needing more than $300,000 to get going, compared with only 14% last year. Just 7% of Inc. 500 CEOs reported using formal venture capital to start their company, compared with 2% last year, while 62% depended entirely on private equity.
Some 85% of Inc. 500 CEOs have an estimated net worth of over $1 million, with 39% pulling down an annual compensation of between $100,000 and $250,000. Also of note is that only 8% of Inc. 500 company founders are women.
Entrepreneurs leading IT Services, Financial Services, Health, and Advertising and Marketing are poised to do the most hiring over the next year. The industries with the strongest showing on this year's list are IT Services, Health, Financial Services, and Business Services (based on number of companies in the sector).
Vesta, a seller of prepaid phone cards, had the highest 2003 revenue, $469 million, among Inc. 500 companies.
To be eligible for this year's Inc. 500, companies had to be independent and privately held through their fiscal year 2003, have had at least $200,000 in net sales in the base year of 1999 for Inc. 500 alumni and 2000 for new applicants, and $2 million in net sales for 2003. In addition, their 2003 sales had to exceed 2002 sales. Companies are ranked on averaged year-over-year sales growth. Inc. verifies all information using tax forms and audited financial statements from certified public accountants and by conducting interviews with company officials.
Beginning November 1, the full Inc. 500 list will be available online at www.inc.com with full year subscription for $19.95 or alone for $9.95. The fee allows users to search 2004 company profiles by industry and offers online-only premium information about this year's Inc. 500. From October 20 - 31, only 50 of the Inc. 500 will available for viewing at www.inc.com. Copies of the Inc. 500 issue will be available on newsstands nationwide beginning October 26 and can also be ordered at 1-800-290-5460 or INC@reprintbuyer.com.
Inc ., the only business magazine dedicated exclusively to owners and managers of fast-growing private companies, delivers real solutions for today's innovative company builders. It provides hands-on tools and market-tested strategies for managing people, finances, sales, marketing and technology. Inc . is the premier publication that focuses on small to medium-size businesses, which are responsible for more than half the nation's gross domestic product and 75% of its new jobs. And Inc . looks beyond work to address the entrepreneurial lifestyle. Inc ., a Gruner + Jahr USA publication, inspires and informs, with cutting-edge coverage that reflects our readers' energy, brashness, and imagination.
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