Update: Many thanks to all of you who have submitted nominations for our list of the Best Small Companies in America – we’ve been inundated with fantastic small-to-midsize businesses. We’ll be collecting nominations through Friday, December 11. You can submit them to entrepreneurs@forbes.com.
In February, Forbes will publish a brand new list of The Best Small Companies, and we’re looking for nominations. We’ll be using the same criteria that I used in selecting the businesses I wrote about in my book Small Giants: Companies That Choose to Be Great Instead of Big (published in December 2005). The great companies I included back then were businesses widely acknowledged as being the best, or one of the best, in their industries. As a result, they had had numerous opportunities to grow much faster and get much bigger, but their leaders had chosen not to, because they had other goals they considered more important. Among them were Danny Meyer’s Union Square Hospitality Group, Gary Erickson and Kit Crawford’s Clif Bar & Company, Fritz Maytag’s Anchor Brewing, Zingerman’s Community of Businesses, and ten other companies not as well-known but equally admired within their respective fields.
Now we’re asking you to let us know about other small, private companies of that caliber. By “small,” I mean what I call “human-scale”—that is, still at a size where the people at the top have some contact with the lowest-level employees and where people throughout the organization have some access to the leaders. That size will vary from company to company. The ones in Small Giants ranged from two to 1,900 employees.
Very likely the company will be growing. Almost all of the companies in Small Giants were growing, even though they weren’t interested in growth for growth’s sake. Danny Meyer, for example, had once said he didn’t want to start any restaurant that he couldn’t walk to in five minutes from his home, but Union Square Hospitality Group was already beginning to expand beyond those parameters by the time my book came out. Among other things, it had opened a burger stand called Shake Shack in Manhattan’s Madison Park. The stand proved so popular that Meyer decided to open a second one on the Upper West Side in the fall of 2008, and from there it was off to the races. By the end of 2014, Shake Shack had 63 locations in nine countries, with system-wide sales of more than $140 million, prompting Meyer to spin it off as a separate public company—in part, he told me, because he wanted USHG to remain a small giant.
The point is that, yes, the leaders of small giants want to deliver an excellent return on investment to shareholders, but those shareholders (in most cases, just one or a handful of people) have other, nonfinancial priorities as well, such as being great at what they do, creating great places to work, providing great service to customers, having great relationships with suppliers, making great contributions to their communities, and finding great ways to lead their lives. They’ve learned, moreover, that to excel in all those things, they have to keep ownership and control inside the company and, in many cases, place significant limits on how much and how fast their companies grow. The wealth they create, though substantial, is a byproduct of success in these other areas.
So these are the criteria to bear in mind:
- The company has been acknowledged as outstanding by those who know it best in its industry and its community.
- It has had the opportunity to get much bigger much faster but instead decided to focus on being great rather than big.
- It has been recognized for its contributions to its community and society in general.
- It has maintained its financial health over an extended time (at least 10 years) by having a sound business model and a strong balance sheet.
- It is privately owned and closely held, usually with majority control in the hands of one or a small number of shareholders.
- It is human-scale.
There is one other factor we’re looking for although I wouldn’t call it a criterion. It’s what I refer to as mojo, by which I mean the business equivalent of charisma. When a leader has charisma, you want to follow him or her. When a company has mojo, you want to be connected with it. You want to buy from it, sell to it, work for it, wear its t-shirts and hats, read books and articles about it, go to hear its leaders speak, and so on. As Justice Potter Stewart famously said about pornography, it’s hard to define, but you know it when you see it.
Most of us instinctively recognize business mojo when we see it and if you know small, private companies that have it, we want to hear from you. You don’t necessarily have to be an employee or even a customer (although if you are, we’d certainly like to hear from you, too). Just send us an email at entrepreneurs@forbes.com and include the company’s name, the name of the CEO, the city and state (or province) where it is located, and your reason for nominating it as one of the best small companies in America. Please include your own name, location, email address, phone number, and relationship (if any) to the company you’re nominating.
Many, many thanks.
