As we have in recent years, once again we use this space in the Big50 issue to present some of the data gathered from this year's class. We have grouped companies by 2005 revenue, but most of the other figures come from 2004 totals or five-year averages.
Small Is Beautiful. One story in these numbers — particularly the five-year averages — is that you can make a good profit with a small volume of work. Ten percent net profit is an oft-cited industry benchmark, and as a group, the smaller companies come closest to achieving it. Of course, the actual dollars are higher for larger companies — a net of 6.3% on $8.3 million is about $529,000 — but the risk is greater as well.
High Producers. These averages are useful as general guidelines for office-field ratio and the volume of revenue that can be handled by individual employees. But they also conceal some the variety in the makeup of this group of companies. The lowest office-field ratio, for example, is 1:4.4. Of the two companies with no office help, the highest volume is $900,000.
Bonus Boost. Salary percentages can be deceiving. Smaller companies are pulling 10% or more on average in salary, but owners of larger companies are taking home more cash. On average, bonuses add almost 40% to owner compensation for companies under $1 million, and nearly 60% for companies over $4 million. For the rest, the average bonus is in the 17% to 24% range.
Top Dogs. Performance among some of this year's Big50 is extraordinarily strong, especially the four companies with five-year-average net profits of 20% or more. Overall, 14 companies had a net greater than 10%.
Ups and Downs.
Overall growth has slowed from the frantic 50% pace of two years ago, but it was still strong, especially for larger-volume companies.