What Is a Gazelle Company?

Marlene Garcia

A gazelle company defines a new business that grows rapidly over four years, netting annual sales of $1 million US Dollars (USD) or more annually. The company offers stock to the public and shows consistent growth and a healthy financial outlook for the future. In some areas, a gazelle company starts with fewer than a dozen employees, but quickly creates new job opportunities as it expands. Growth typically occurs within the start-up company and not through acquisitions or mergers between firms.

Companies that net more than $1 million in annual sales after four years are referred to as gazelle companies.
Companies that net more than $1 million in annual sales after four years are referred to as gazelle companies.

One study found gazelles represent only about one percent of all businesses, but account for approximately 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 firms. The average gazelle company hired 88 new employees per year, while larger and more established businesses employed 20 to 250 new workers annually. Some established firms hired only two or three new workers within the study period.

Some economic analysts have proposed government support for individual entrepreneurs to assist them in creating a new company. During an economic downturn, job growth linked to a gazelle company’s rapid expansion could impact recovery efforts, the study found. Making it easier to obtain financing and easing government regulations for new business might create more gazelles to stimulate the economy. Tax breaks might also encourage growth of small businesses.

A gazelle company sometimes evolves from foreign investment, especially in the technology sector. Easing or expanding the business visa process might entice foreign investors with cash to start a business. Another recommendation that could result in a new gazelle company involves support for university research with commercial potential.

The term gazelle company started in the United States and spread internationally to describe a start-up with an annual growth rate of 20 percent or more in sales. This rapid growth might come with challenges in meeting customer demand and adequately training new employees within a small company. A gazelle company typically revises its business strategy and organizational structure as it grows to remain successful.

Leaders of these firms suggest creating a culture of innovation and finding a niche market for goods or services offered. Many successful start-ups seek creativity when hiring employees and capitalize on their fresh ideas. They might devise products to help mid-size firms become more productive and profitable when revenue declines.

You might also Like

Readers Also Love

Discuss this Article

Post your comments
Forgot password?