The leaders of The PROFIT HOT 50 companies honoured here have pulled off a remarkable feat. They've proven that even in today's stop-go economy, you can achieve go-go growth.
The firms on our 13th annual ranking of Canada's Top New Growth Companies averaged revenue growth of 1,131% from 2009 to 2011. The fastest of them all grew its sales by an eye-watering 32,714%. Read more about the No. 1 company. What's more, an overwhelming 80% of these star startups landed in the black in a challenging 2011.
The ranking and company profiles throughout the HOT 50 package deserve the attention of all entrepreneurs with an interest in growing their businesses. These stories offer not only inspiration but valuable insights into how to build a growth company.
What did these firms do to get off to such a superb start? Although there's no single formula for success, one thing that's clearly essential is attracting top talent—and then hanging onto it. Even if few startups can boast benefits packages to equal those from Corporate Canada, the vast majority of the HOT 50 offer employee training, bonuses tied to individual performance and formal performance appraisals. And the HOT 50 have cultivated appealing company cultures that marry a "work hard, play hard" spirit with the excitement of helping to build a business that's breaking new ground.
A solid majority of Canada's hottest startups (58%) have tapped growth opportunities outside our borders. Almost all of these exporters made sales in the U.S.; the next most popular foreign destinations were the U.K., the rest of Western Europe and Australia. These globetrotters derived 31% of their total revenue from foreign sales.
One striking thing about this year's ranking is how many firms have carved out a niche as a low-overhead alternative in their sector. By operating super-lean, these businesses can price their wares at rates well below what established players charge.
No matter which strategy you adopt, you'll go nowhere fast without capital. Anyone starting a business should study the "Growth Fuel" chart, which reveals huge shifts in where the HOT 50 have found financing over the past two years versus in their startup year. Vastly more of these firms now use banks, credit cards, leasing or SR&ED tax credits than during their launch stage just a few years ago.
For a final insight into what's entailed in building a successful startup, here's how one CEO—Greg Wolfond of SecureKey Technologies Inc. (No. 2 on the list)—put it: "All these things take longer and require more from you than you think they will at the start. But then they work out much better than you had anticipated."
How We Ranked Them:
Entries are ranked by two-year revenue growth, and verified through financial statement review. All growth rates are calculated from base-year revenue of at least $100,000. For more on the ranking procedure and eligibility criteria, visit PROFITguide.com/rankings.
Entries were solicited through a form published in PROFIT and on PROFITguide. com, and through targeted direct mailings to qualifying companies. The nomination drive also was promoted through Canadian Business, Connected For Business, Maclean's and several major business organizations. The information in this issue, plus further information on each HOT 50 company on PROFITguide.com, are the only data that PROFIT will release on the HOT 50.