Tuesday, 24 April 2007

Real Business Hot 100

Real Business this month has their annual list of 100 fastest growing profitable companies, the Hot 100. I find this list reassuring for two reasons:

(1) we could nearly be on the list and (2) we aren't on the list.

Entry-level growth rate to get a spot on the list is just shy of 60% per annum (spot 100 is occupied by Eynsham Group, at 57.6% annual growth). Our 37% annual growth over the same period (last three years) is pretty respectable (very respectable if you take all revenue under the 0800handyman brand, i.e. include franchisee revenue, then you are looking at 63% growth per year).

But I definitely wouldn't want to be growing at the 100-300% growth rates exhibited by the top 30 companies. That sounds like a recipe for disaster. Why is fast growth per se so sought after? Will it really make much difference to how big that company is in ten years time? Surely they are just going to grow super fast for a few years and then spend a few more years recovering. Better to grow steadily for ten years than race along for three only to be overtaken later by someone who has everything much more under control.

Hare or tortoise? Tortoise gets my vote every time.

1 comment:

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