This is the twentieth year REMODELING has devoted its May issue to honoring the incoming class of the Big50. Each year, the search begins just after Labor Day, when the call for nominations goes out. Remodelers can nominate themselves, but most candidates come to the attention of our editors through recommendations from previous Big50, from the leadership of several trade associations, and from the most prominent industry consultants. We've even received some nominations from happy remodeling customers and trade contractors.
Of course, the nomination is just the beginning. All candidates fill out an application that provides basic information about their company, including years in business (five to seven years is the norm, but younger companies sometimes qualify) and current financial data. Despite being called the “Big50,” size has little to do with it (more, below, on what “big” means). About 20% of each year's class have revenue of less than a million dollars, and about 10% take in less than $500,000 in the year they receive the award. The most important numbers are gross margin and net profit, and all Big50 inductees meet minimum standards for both short- and long-term profitability. The analysis takes into account how those profits are spent, and Big50 companies typically provide solid benefit packages for employees, including health insurance, retirement savings, profit sharing, and performance bonuses.
But sound numbers are just the ante. Editors interview candidates who meet the minimum longevity and financial requirements to uncover those attributes that make a given company stand out among the hundreds that apply. We look for long-term employees, because the best companies experience less turnover. We look for industry involvement through associations and trade groups because the best company leaders look beyond their day-to-day problems and devote time, energy, and resources to industry issues both locally and nationally. We look for community involvement because successful companies work hard to build their image and the image of our industry through active participation on school boards and neighborhood groups, local business organizations, and other worthy causes.
The cumulative effect of measuring a company against all of these criteria forms the background against which editors evaluate answers to three open-ended questions that appear near the end of the application. One asks about a recent innovation, with the goal of finding companies who are particularly creative and forward thinking in their approach to some aspect of their business. Another asks for three reasons for a company's success, hoping to find answers that reveal company owners who have a high level of self-awareness.
The third question is often the most telling. It asks applicants to explain just what it is that distinguishes their company from all others. Lots of remodeling company owners earn good margins, provide strong benefit packages, or are active in their industry and communities, but those selected each year for the Big50 award have something special. And when push comes to shove, it is often how editors evaluate the answer to this question in follow-up interviews that makes or breaks a company's chances of being named Big50.
It's also the answer to this question that somehow justifies the name “Big50.” There is lots of confusion about the term “big,” which is commonly used to indicate a large quantity or size. But “big” also means “chief” or “preeminent,” “outstandingly worthy or able,” and “of great importance or significance.” The sense of meaning I find most appropriate is “magnanimous,” which means “showing a lofty and courageous spirit,” and “showing nobility of feeling and generosity of mind.”
You'll find plenty of evidence to support this definition as you read through the profiles of this year's inductees. I hope they inspire you to take your own company to the next level. But I imagine we'll stick with the name “Big50” for a long while — the “Magnanimous50” is kind of a mouthful.