What We Can Learn From the Forbes Best Small Companies List
Friday, November 19th, 2010
Forbes Magazine recently released their list of America’s 100 Best Small Companies.
Right off the bat, I need to say that the phrase “small companies” is relative. We’re not truly talking about “small businesses” with this list. The annual revenues of those on the Forbes list were in the 8 and 9 figures – from a low of $29 million for NV Energy to a high of $987 million for Skyworks Solutions.
But the list is instructive because it gives you an idea of the kinds of businesses that are growing, even in this economy. And if you need inspiration for your own business or are looking to spot trends in businesses, look no further than this list.
The industries on the list varied greatly, ranging from health and technology to education and mattresses. The diversity is exciting because it lets you know that there is room for all kinds of businesses.
Candidates for the list had to:
1) be publicly traded for at least a year;
2) have annual revenue ranging from $5 million to $1 billion; and
3) have a stock price higher than $5 a share.
Forbes looked at the companies’ earnings growth, sales growth, return on equity and account policies (eliminating any company with questionable financial systems). Each area was evaluated over the most recent 12-month and 5-year period.
Interestingly, there are at least three education companies on the list (Strayer Education, Capella Education and American Public Education). This reminds us that it’s the information age; helping others gain knowledge is hot right now.
In fact, WebMD Health makes their money off of information. They believe that better information leads to better health. Since they ranked number 5 on Forbes’ list, we could say that better information also leads to better business. This is the digital age, where online information rules. There are also companies to facilitate your network of information (F5 Networks Inc.), secure and store your information and make your information public through Web hosting (RackSpace Hosting).
For more on the methodology, as well as details about the 100, visit Forbes.com/best-small-companies. There is a lot to see including multiple apparel and consulting companies, as well as household names like NutriSystem (No. 6) and Tempur Pedic (No. 15). The list may just inspire you with ideas for your next business, or help you spot some trends as to which businesses are doing well today and will prosper into the future.
(Article courtesy of SmallBizTrends)