If you’ve always associated the word gazelle with bounding animals more than small businesses, then we’re on even footing for this article.
I had only heard the term in passing before reading this Fox News report, which seeks to recognize the increasing role of the “gazelle” in economic and job growth. The definition of a gazelle is of a small business with great agility that shows enormous growth in a short time:
Gazelles? Yes, gazelles. That’s the hot new buzzword used by economists who study the mechanics of job creation to identify small businesses that surge quickly, experience double-digit growth across several consecutive years, and grow their payrolls accordingly. The greatest gazelle of modern times, of course, is Google – which, like many in its species, did not remain a small company for long.
“These are the companies we’d like to see more of,” said Dr. Martin N. Baily, a senior fellow at the Brookings Institution. “I mean, many of our household words today – whether it’s an Apple or Google – started out as a small company, some of them in garages or dorm rooms…And they became big companies with lots of employment and listing on the stock market. So those gazelle companies are pretty important to our economy in terms of net job creation. They are the ones who on balance create a lot of the new jobs in terms of net wealth creation.”
With so many challenges facing small businesses—from securing working capital to combating inflation—it’s little surprise that gazelles are endangered species. The loosest definition of the term has a company growing rapidly after four years for a period of about four years, but many businesses have enough trouble just staying afloat for four years, much less showing double digit increases in revenues.
The challenge issued in this report—something loosely echoed in an interview we did with small business author and expert Chuck Blakeman, which will go live tomorrow—is for government to make the climate friendlier for these kinds of businesses when they do emerge. Small businesses with bright ideas, determination and a little luck can get there, but gazelle owners like Michael Ortner thinks there’s a way to help that process:
“I think it would be difficult for the government to make bets on who the gazelles are going to be,” Ortner told Fox News. “So I think it is important for the government to have policies in place that give – that allow potential gazelles, or [existing] gazelles, to hold onto as much of their capital as possible.
What are your thoughts on this report? Are you a budding gazelle, so to speak?
Photo credit goes to pixelbase at http://www.sxc.hu/photo/1077175