A Gazelle company is a new business that grows rapidly over four years, netting annual revenues of $1 million USD or more each year. They account for about 10% of new job opportunities each year and can stimulate the economy. The term “Gazelle” describes a start-up with a 20% or greater annual growth rate in sales. Gazelle companies typically review their business strategy and organizational structure as they grow to stay successful.
A gazelle company defines a new business that grows rapidly over four years, netting annual revenues of $1 million US dollars (USD) or more each year. The company offers shares to the public and shows steady growth and good financial prospects for the future. In some areas, a Gazelle business starts out with fewer than a dozen employees, but quickly creates new business opportunities as it expands. Growth typically occurs within the start-up and not through acquisitions or mergers between companies.
One study found that gazelles make up only about one percent of all businesses, yet account for about 10 percent of new job opportunities each year. The research used statistics and databases that measure the number of new jobs created in large and small businesses. The average Gazelle company was hiring 88 new employees a year, while larger, more established companies were hiring 20 to 250 new workers each year. Some established companies only hired two or three new workers during the study period.
Some economic analysts have proposed government support for individual entrepreneurs to assist them in setting up a new company. During an economic downturn, the study found that job growth linked to a rapidly expanding gazelle could impact recovery efforts. Making it easier to get finance and easing government regulations for new businesses could create more Gazelles to stimulate the economy. Tax breaks could also encourage small business growth.
A gazelle company sometimes evolves from foreign investment, especially in the technology sector. Easing or expanding the business visa process could entice foreign cash investors to start a business. Another recommendation that could lead to a new Gazelle company is to support university research with commercial potential.
The term “Gazelle” began in the United States and has spread internationally to describe a start-up with a 20% or greater annual growth rate in sales. This rapid growth could lead to challenges in meeting customer demand and adequately training new employees within a small company. A Gazelle company typically reviews its business strategy and organizational structure as it grows to stay successful.
The leaders of these companies suggest creating a culture of innovation and finding a niche market for the goods or services they offer. Many successful startups look for creativity when hiring employees and capitalizing on their original ideas. They could design products to help midsize businesses become more productive and profitable when revenues decline.
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