The annual Fast 50 rankings give small businesses plenty to celebrate, but even the best performers see challenges ahead.
Our annual Fast 50 rankings is generally a celebration of the achievements of some of the best small businesses in the market.
This year is no exception. The companies making the list have had extraordinary growth, starting with No. 1 company, SAVA Workforce Solutions, which achieved a five-year compound annual growth rate of 326.05 percent.
The small businesses on this list have shown an ability to adapt and change with the market. Many are taking advantage of various small business programs to build businesses that will stand the test of time.
The types of companies that populate the Fast 50 range from resellers to consultants and IT services providers to research and development firms. The list is entrepreneur heavy with most companies having a founder or team of founders at the helm.
The aggregate value of 2010 revenue for the Fast 50 is $1.4 billion. The No. 50 company NextPoint Group, came in with a five-year compound annual growth rate of 62.49 percent. Not too shabby.
So there is plenty for these companies to celebrate, but as you read the profiles of the Fast 50 we are highlighting here, you’ll quickly realize that these companies, despite their growth, also are facing a tough market and they know it.
Just like their larger brethren in the government market, their customers are facing austere budgets with dim prospects for the rampant growth of the past decade.
The response from these companies comes in several shapes. First, there is a push to control costs because government agencies are putting more and more emphasis on price in the contract bids they evaluate.
That in turn puts pressure on contractors to control their own costs if they want to remain profitable.
“If your overhead rates are low, you’ll stand a better chance of winning,” said SAVA’s general manager David Poirier.
The key is to balance bidding the best people with controlling costs. For Poirier that is the key to success.
In the current budget environment customers are reticent to move on new projects.
“People are very reluctant to say ‘Let’s do this initiative or that initiative’ when they don’t know if they’re going to get the funding or not,” said Brent Gendleman, president and CEO of 5AM Solutions, No. 41 with a 75.17 percent compound annual growth rate.
Another impact of the tighter budgets is increasing competition.
As we see funding streams shift around and priorities shift and certain programs being defunded, companies that can be flexible and agile really gain a sustaining advantage in their ability to compete,” said Dawn Halfaker, president and CEO of Halfaker and Associates, No. 11 with 153.32 percent five-year growth rate.
But the problems of tight purse strings and program at risk of losing funding can create opportunities as agencies scramble to perform their missions with fewer resources.
“Sometimes we’re able to help with that process and perhaps achieve savings,” said Nicole Geller, CEO of GCS Inc., No. 35 with 82.45 percent compound annual growth rate.
“Sometimes the cuts really do allow for people to take a breath and reevaluate and reprioritize, and sometimes you’re in the plus part of that,” Gendleman said.
A paramount focus for these companies is performance, making sure they are delivering value to their customers.
“Regardless of company size, political climate or the budget battle, if you’re good at what you do and have happy customers, I think you’re well-positioned for success,” said Christopher Romani, president and CEO of Integrity Management Consulting, No. 7 with a 188.18 percent compound annual growth rate.
The theme of a customer focus and a dedication to the customers mission is repeated often by the Fast 50 companies. It is both a passion for the market and a survival instinct.
“You have to make sure you’re keeping an eye on what the government is buying and where [government buyers] are spending their money,” said Frank Blair, managing partner of Edaptive Systems, No. 19 with a 105.2 percent growth rate. “Because if you’re not flexible enough to change direction, you’re going to get mauled,”