by Katie McConnell
Over the last couple of years, good news about business has been hard to come by. Yet, underneath the headlines of downsizing and layoffs, there are glimmers of success as many companies (companies you've likely never heard of) continue to grow and create revenue and jobs. Many of these companies are so-called second stage companies, companies that are past the initial start-up phase. The Edward Lowe Foundation, which studies and supports second-stage companies, defines them as growth focused, privately held companies, with six to 99 full-time employees and $750,000 to $ 50 million in sales or similar range of working capital.
Exactly 50 of these success stories were on display last month at the Colorado Companies to Watch Awards. Operated out of Colorado's Office of Economic Development and International Trade with support from community partners and private sector sponsors, the program, now in its third year, celebrates and raises the profile of successful second-stage companies from all industry sectors and communities in the state.
In addition to the awards ceremony, the Colorado Companies to Watch organizers honor each one of the winning businesses individually throughout the year through the "This Week's Company to Watch" project. A company-focused press release is distributed, and community partners and sponsors facilitate an on-site celebration for each company.
The impacts of these companies are quite impressive. From 2007 through 2010, the 50 winning companies generated $975 million in revenue and added 851 employees (both in Colorado and out of state), reflecting a 114 percent increase in revenue and 123 percent increase in jobs for the four-year period. That translates into a 30 percent annual revenue growth and 31 percent annual growth in employees. This growth means more jobs and increased economic vitality in the individual communities where these businesses operate. Many local governments participate in the program to celebrate and demonstrate support for their local businesses.Local Leadership: Boulder, Colo.
Boulder is a city that is leveraging the Companies to Watch Program as a way to celebrate its second-stage companies. Boulder, a hotbed of entrepreneurship, has an abundance of start-ups. However, this presents its own unique challenge as the city tries to keep up with the new businesses and build connections to them as they mature.
Second-stage companies, because of their growth rate, may be bumping into new regulations or exploring expansion locations. Having connections to these businesses allows city staff to intervene in regulatory issues or explore location options within the community.
The City of Boulder's Economic Vitality Program, Boulder Economic Council, Boulder Chamber of Commerce and Boulder Small Business Development Center work closely together. This collaboration not only enables these entities to reach out and provide support to growing businesses, but also provides insight on which companies fit the second stage company profile and should be nominated to the Companies to Watch Program. This year, Boulder had eight local companies win.
After submitting nominations and attending the awards program, Boulder is actively engaged in the individual recognition events. Held during each company's "This Week's Company to Watch," these events celebrate a successful company at their home office and are attended by Boulder's Economic Vitality Program, Boulder Economic Council and Chamber of Commerce.
Boulder's mayor, city manager or council members also attend these events, allowing city leadership to personally congratulate and express support for these successful companies. Additionally, the city council and mayor pass a proclamation celebrating the winning companies. These activities raise the profile of local companies and demonstrate Boulder's commitment to these businesses.Getting Started: Opportunities for Local Governments
While not all states or regions have sophisticated programs geared at second-stage companies like Companies to Watch, local governments can learn and adapt the principles of this program to support and celebrate growth businesses in their own backyard.
For most local governments, the first step is to understand the landscape of the business community. Second-stage companies, despite their capacity for growth, are those that local governments are often unaware of. Since these businesses are focused on growth, local government small business programs that are typically geared towards startups (like business plan and permitting assistance) are no longer helpful.
In addition, growth companies likely fly under the radar of traditional economic development programs meant to attract and retain larger employers.
As exemplified in Boulder, Colo., partnerships can be an important link for cities interested in connecting with local businesses. In order to begin to forge these connections, local governments should seek out partners that commonly interact with the local business community, such as: chambers of commerce, technology councils, universities, small business development centers and economic development organizations.
For cities looking to get a handle on their business landscape, including the number of second stage companies, the Edward Lowe Foundation has created a free tool that allows users to access data about businesses and jobs at the state, metropolitan statistical area (MSA) and county levels. To learn more, visit www.YourEconomy.org
.About the Companies to Watch Program
Companies to Watch (CTW) is a unique awards program developed by the Edward Lowe Foundation to honor second-stage companies that demonstrate high performance in the marketplace, exhibit innovative products or processes or otherwise make those companies "worth watching."
Since applicants are evaluated on more than growth, it widens the playing field for companies not often recognized for the critical differences they make in their industry or state.
CTW also plays a strong role in driving energy and building statewide community by involving multiple players throughout the process. Currently, there are CTW programs in Michigan, Indiana, Colorado, North Carolina, Wisconsin and Florida. For more information, please contact Joy Kitamori at firstname.lastname@example.org
This article is part of NLC's Center for Research and Innovation ongoing focus on small business development and entrepreneurship. To learn more, please contact Katie McConnell email@example.com