Fastest growing firms in security?
NEW YORK—Well, despite the economy, we know at least a few physical security players have grown in the last few years. The Inc. 500/5000, a list of "the fastest-growing small companies" as defined by rate of growth over the period from 2006 through 2009, was released this week and includes the likes of VMS-maker Exacq, integrators Security By Design and Intelligent Access Systems, residential firms like Defender Direct and Pinnacle Security, and online distributor Brickhouse Security.
Exacq led the way for the physical security industry, ranking at #173, with sales of $9.7 million in 2009, representing a 1,642 percent growth rate. For installers, it was Detroit-based Security By Design in the lead, with $6.7 million in 2009 sales, for a growth rate of 956 percent.
Of course, as you go down the extended list to the bottom of the 5000, you don't have to grow very fast to make the list. Sacramento-based All Phase Security, which does both installation and guarding services, came in at #4,506 with modest growth of 13 percent over three years, reaching $7.5 million in revenues for 2009. Logically, it is harder for older companies (All Phase was founded in 1994) and larger companies to grow at the percentage rate that makes the top of the list. It can be seen as plenty impressive for Monitronics, also founded in 1994 and with $234 million in 2009 revenues, to come in at #4,222 with 26 percent growth.
Nor is every security company that is growing fast represented on this list. A company must agree to submit its audited financials for all the world to see and some firms are not comfortable with that. Further, a company might be unaware of the list and application process entirely.
However, Jason Buckman, CEO and owner of Security By Design, said the process isn't overly strenuous. "This was brought to us by our CPA," Buckman said. "It's just a one-page form that you put your revenue numbers on and your CPA signs. They don't come out and do an audit ... It's just our revenues, and at the end of the day, if anyone really wants to find that out, they'll do it anyway. For us, it's a good positive marketing piece to get our name out there."
Buckman said it's a nice thing to have on the resume, too, for larger end users who are concerned, especially in this economic climate, about a small integrator's staying power and capabilities. "Part of the motivation," he said, "was to show we're not a small company. It's in writing, and it's a reputable source ... [End users] are concerned small companies won't last. They're doing a lot more due diligence on your capabilities financially. That's made things more difficult over the last couple of years of trying to do business."
Not so difficult, of course, that Security By Design couldn't grow at a 956-percent clip.
For Exacq director of sales and marketing Tom Buckley, inclusion on the list has a positive impact he's familiar with: In 2000, Integral Technologies, the last firm run by the majority of Exacq's leadership team, ranked on the list with 1999 sales of $14.4 million. "We got a lot of play out of that," Buckley said. "It got us local attention. We're always looking for good employees, and local attention got us that." The market paid attention, too, he said, and he felt it had more impact than would have winning the New Product Showcase at ISC West or some other industry-specific award. (For more on the similarities between Integral and Exacq, see here.)
And maybe the list is a predictor of future success. Lenel was #9 on the list in 2000, Buckley noted.
This time around, the local recognition hasn't come for Exacq yet, but "we heard instantly from Anixter," Buckley said, "and we heard from PSA. Our bigger distributors are certainly interested in that kind of information." Nor is it a bad message to send out to the reseller community, he said. "They'll feel good about being with a winner for right now," Buckley predicted.
Buckman at Security By Design hopes potential end users have a similar positive connection with his business going forward: "That was a lot of the motivation," he said, "to show that we're not just a little privately held company. We've got the wherewithal to compete with the larger companies."