The Small Business Administration Office of Advocacy released a new report, High-Impact Firms: Gazelles Revisited.

This study examines firms with significant revenue growth and expanding employment. These are termed “high-impact firms” to distinguish them from gazelles [firms with rapid revenue growth.] The research offers summary statistics helping to define the scope and characteristics of high-impact firms. The report sheds light on several previously unanswered questions, including: What are high-impact firms before they become high-impact firms? What happens after their high-impact phase?

Among the overall findings of the report:

High-impact firms are relatively old, rare and contribute to the majority of overall economic growth. On average, they are 25 years old, they represent between 2 and 3 percent of all firms, and they account for almost all of the private sector employment and revenue growth in the economy.

Here are some highlights:
• From 2002 to 2006 there were 376,605 high-impact firms in the United States.
• For the three firm-size categories analyzed, the average size of high-impact firms in the 1-19 size
category was 3 employees at the beginning of the period of analysis, increasing almost out of the size
category to 16; for the 20-499 firm-size class it was 65 increasing to 209; and for the over-500 size class,
it was 3,648 increasing to 8,041.
• High-impact firms exist in all industries. While some industries have a higher percentage of these firms, they are not limited to high-technology industries.
• High-impact firms exist in almost all regions, states, metropolitan statistical areas (MSAs) and counties.
• In the four years after a high-impact firm undergoes its high-growth phase, only about 3 percent die.
Most remain in business and exhibit at least some growth.
• The data suggest that local economic development officials would benefit from recognizing the value of cultivating high-growth firms versus trying to increase entrepreneurship overall or trying to attract relocating companies when utilizing their resources.

A previous SBA report titled “Are Male and Female Entrepreneurs Really That Different?” was the subject of my September 25, 2007 blog post I can do anything you can do better - or at least just as well! One of the highlights of that report was that “…when controlling for factors typically influencing entrepreneurial performance, gender does not affect new venture performance. However, several factors - differing expectations, reasons for starting a business, motivations, opportunities sought and types of businesses - vary between the genders, and these result in differing outcomes. In essence, men are not inherently better owners, they have different business goals.”

Male or female, when starting a new business the entrepreneur has to have realistic expectations in line with the business they are in. But why not keep our aims high - to be a high-impact business. A successful business requires planning, dedication and hard work. Knowing that achieving growth is a huge factor in our long-term success may be the extra incentive we need to work even harder at the day-to-day business, and planning for that growth may make a difference.
A copy of the report is located at: http://www.sba.gov/advo/research/rs328tot.pdf and the research summarycan be found at: http://www.sba.gov/advo/research/rs328.pdf.