The companies celebrated in these pages make up a fast growth super-elite. The PROFIT 200 have increased their revenue at such a blinding rate—an average of 1,044% over five years—it’s as if they’re operating on a different planet than mere mortal firms. And the fastest of them all—NexJ Systems Inc.,—grew its sales by a breathtaking 15,025%.
Of course, Canada’s Fastest-Growing Companies don’t really do business on a different planet. They face the same challenges that every firm encounters whatever its sector and growth rate, such as how to manage HR, sales, finance and marketing. The PROFIT 200’s success at solving these challenges deserves the attention of all entrepreneurs with an interest in growing their businesses.
This super-elite group didn’t achieve their extraordinary top-line growth at great expense to the bottom line. An overwhelming 87% were profitable in their most recent fiscal year. And they made a vital contribution to the country by creating 14,943 jobs from 2006 to 2011.
As the table entitled “Sector by Sector” right, growth stars are especially thick on the ground in industries such as IT services for business, marketing services and software development. But the ranking also shows you can build a fast-growing business in practically any niche. The list includes a chain of mobile windshield-repair kiosks, a manufacturer of wireless traffic lights, a supplier of fresh cooked food for schools and daycares, and—how cool is this?—an online retailer specializing in robots.
Canada’s biggest urban areas are entrepreneurial hotbeds. Of the 200 firms on the list, 80% are based in one of the six Census Metropolitan Areas with more than one million people. The leader was Toronto, home to 37% of the companies, followed by Vancouver (15%), Montreal (13%), Calgary (7%), Ottawa-Gatineau and Edmonton (4% each). But you can also find growth stars in far smaller centres, including Lloydminster, Alta.; Magog, Que.; Kingsville, Ont.; and Luseland, Sask.
The PROFIT 200 have pursued many different paths to hypergrowth. Although exports have made up a declining share of the Canadian economy over the past decade, selling outside our borders remains one of the best ways to scale up a business fast. (See “Selling to the World”.) The 56% of PROFIT 200 companies that export did foreign sales totalling $2.4 billion last year—compared to $240 million in foreign sales reported by 46% of the PROFIT 200 five years prior. Another measure of just how much exports can drive a company’s revenue growth is to look at the companies at the very top of the ranking: seven of the top 10 generated at least 85% of their sales outside Canada last year.
The CEOs who run the PROFIT 200 are a highly diverse lot. (See “Anatomy of a Growth Leader,”.) Although 29% have a graduate degree, 10% have high school as their highest level of education. Their ages range widely, from 26 to 64. So does their compensation. Fifteen chief executives made at least $1 million in 2011, led by one who made $14 million. But 16 CEOs made less than $100,000, including one who paid himself nothing.
Because the PROFIT 200 ranks firms based on their revenue growth in percentage rather than dollar terms, the bigger your revenue in the base year, the harder it is to make the ranking. So, it’s impressive to see how many large companies have pulled off this feat. Ten of them had 2011 revenue of at least $100 million. Sunwing Travel Group Inc. (No. 94) led the way, with sales of $1.04 billion. Next came 5N Plus Inc. (No. 15), at US$493 million; and Mood Media Corp. (No. 2, after topping the list last year), at US$330 million.
Massive Job Creators!
14, 943 net jobs created by The PROFIT 200, 2006 to 2011
Another impressive feat is to remain on the PROFIT 200 for an extended run—because the hill becomes ever tougher to climb when you’re being ranked based on percentage growth. A remarkable 14 companies are appearing on this year’s ranking for at least a fifth time. The leaders here are Sunwing and iFinance Canada Inc., both on the PROFIT 200 for an eighth time; and ARTE Group and Tenzing Managed IT Services, each for a seventh time.
Even in an economy stuck in low gear, smart entrepreneurs are showing how to achieve dazzling growth rates—and then maintain them year after year.
How we ranked them
Entrants were ranked by five-year revenue growth, with revenue and net income verified through financial statements. Growth rates were calculated using base-year revenue of at least $200,000. More details about the ranking procedure and eligibility criteria can be found at PROFIT200.ca.
Entries were solicited through an entry form published in PROFIT and on PROFITguide.com. They also were solicited through the PROFIT-Xtra e-newsletter, L’actualité, Canadian Business and Maclean’s magazines, through targeted direct mailing to Canadian growth companies and by the organizations that are thanked on page 86. The information published in this issue and on PROFIT200.ca is the only data that PROFIT will release on Canada’s Fastest-Growing Companies.
To view complete PROFIT 200 rankings, click here.
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