Fastest-Growing 100 companies have contained their payroll costs with improved productivity. Since 1998, the average sales per employee has increased fivefold, from $37,476 to $190,984. While the average payroll among the Fastest-Growing companies has grown 241.5 percent in the last five years, revenues have grown 392.2 percent (see table, "Statistical Composite").
Although the Grant Thornton study identifies financial concerns as the single most important issue facing middle-market companies, Fastest-Growing 100 CEOs have discovered adequate money sources to fund their growth. "We let revenues lead expenses," says Mr. Saenz. "We are self-funded. We've never had to borrow money. Maybe that has smothered growth, but it's good to not have any debt."
"The only bad thing about working for the government is that they pay in 30 to 60 days," says Mr. Flores. "A lot of companies don't work with the government because they take so long to pay, but the good news is that they will pay [eventually]. It's hard trying to establish a line of credit, being a small company and growing so fast. You can overcome [the objections of bankers] when you show them the work is being done." In contrast, Ms. Tuder managed to negotiate her first contract with up-front payment, a decision she credits with providing a financial base during her company's formative years.
|Statistical Composite: Typical "Fastest-Growing 100" Company|
|Five-year sales growth||392.27%|
|Company age||13.4 years|
|Number of employees in 1998||77|
|Number of employees in 2002||263|
|Revenues in 1998||$10.09 million|
|Revenues in 2002||$50.28 million|
|Per-employee productivity in 1998||$37,476|
|Per-employee productivity in 2002||$190,984|
|© 2003 Hispanic Business Inc. Reprinting, copying, or transmitting all or part of this information requires written permission.|
For companies eager to reach the middle market quickly, Ms. Rodriguez suggests exploring new marketing strategies, such as franchising and exporting, as well as paying attention to the company's culture. "Intrapreneurship," or fostering innovation inside a company, should be rewarded and success recognized. Ironically, the most innovative companies tolerate failure, she says, because it can lead to unexpected innovation if properly managed.
As the senior member of the Sphinx work force, Mr. Flores has innovated by starting a consulting practice focused on identifying and recovering errors in clients' garbage bills. He calls the trash business "one of the biggest revenue industries in the world," and claims recycling programs, bill auditing, and contract renegotiation can save big money.
For Sphinx, it represents another opportunity for growth in a slow, price-conscious time. "The trash industry is always there, 24/7," says Mr. Flores. "Customers love it because when I come in and do an audit, it's free if I don't recover anything."
Written by Senior Editor Joel Russell. The 2003 Hispanic Business Fastest-Growing 100 directory research by Business Economist Juan Solana, Research Supervisor J. Tabin Cosio, and Research Assistants Cynthia Marquez and Mike Caplinger.