We started Fast50 last year and had our inaugural awards during ISC West 2012 because we wanted to create a level playing field and an awards and best practices program that would recognize the entire landscape of systems integrators and alarm dealers. On these pages we have assembled three lists: the overall ranking based on the highest percentage of growth; ranking by revenue growth; and ranking by percentage growth. You can see these lists on the accompanying pages and also note that there may be additional companies aside from those in the overall rank because of the nature of the other two compilations. We congratulate everyone in the program and thank the industry for their support and these dealers and integrators for taking time to submit their forms and privately disclose their revenues (which are not published, another perk of the program). We also thank the Security Industry Association, Silver Spring, Md., and ISC West (Reed) for their endorsement of Fast50 and their help in promoting and marketing our program.
First, because of the nature of America’s Fastest Growing Systems Integrators—and the fact that it only includes 50 companies—every firm that placed, no matter where in the lists, are to be congratulated. This is an elite compilation and everyone deserves recognition. This year, 2013, we had many more entries, which made the competition even stiffer. The fact that more companies entered could be based on the fact that the recession is waning, that more dealers and integrators are increasingly aware of the positives of marketing their companies in programs like this, that more were familiar with the program, or simply that they wanted the world to know that they could achieve success even in these recessionary times.
The mechanics of Fast50
Here’s how the program works: The companies ranked in the SD&I Fast50 are recognized and ranked based on percentage growth and revenue growth, and their overall ranking balances those two considerations. To do so, it employs a simple but effective algorithm that balanced those two factors and here’s why we did it this way: If we ranked companies purely on revenue growth, it would tend to favor larger companies. Think of it this way. Let’s set up two non-existent companies: ABCDEF Security and GHIJKL Protection. ABCDEF Security is a $400 million company and has $4 million in average growth, while GHIJKL Protection is a $200,000 company that saw average growth of $125,000. On a purely revenue growth comparison, GHIJKL’s $125,000 growth pales in comparison to ABCDEF’s $4 million growth. Conversely, if we ranked the companies purely on percentage growth, it would tend to only favor smaller companies that can see early explosive growth. In that case, GHIJKL Protection’s 62.5 percent growth well outshines the 1 percent growth of ABCDEF Security. And that’s why we balance it.
We also balance the equation by studying two years of financial change. By using two years, we also ensure that high-growth companies aren’t just “flash in the pan” types of businesses, but are able to sustain themselves. It also balances ups and downs. For example, a company on our list could have had negative growth in its first year but then achieved such strong growth in year two that the average was powerfully in the positive.
To begin with, companies confidentially report to us there most recent fiscal years worth of gross revenues. Using those numbers, we compute the revenue growth and percentage growth for each of their two most recent fiscal years. We average the two years of growth numbers to generate an average revenue growth for the company, and we do the same for the company to create an average percentage growth. Companies are then ranked based on their average revenue growth over the last two fiscal years, and we also rank them by percentage growth during that same time period. We publish those lists in addition to the overall ranking. We compute the overall ranking by averaging their position on each of those lists and then ordering the companies by their average overall ranking. Last year, if there was a tie in the overall ranking, we let average revenue growth be the tie-breaker. This year, we allowed for ties, and these resulted simply because of the formula average of the revenue and percentage ranks; it was a product of one being higher for dollar increase and one being higher in percentage increase.And that’s how we come up with the list of the SD&I’s Fast50 Fastest Growing Systems Integrators in North America.
In addition to financial data, we also request additional data (markets served, growth verticals, public versus private), and we use that data to give you a more holistic view of these fast growing companies, so you can understand what’s driving growth for these dealers and integrators.