GACELA COMPANY

Accelerate your business with these expert tips about "Gazelle business". Analyse and discover this TIP!

The gazelle companies are the dream of any entrepreneur or SME. A gazelle company is one that is growing rapidly, even in times of crisis at an annual rate of between 20 and 25% per year, turnover increases of more than 75% cumulatively for three consecutive years and at least 10 employees. These types of companies are young, i.e. they have few years of existence (between 2 and 5 years) and are employment generators as a result of its accelerated growth. 

The aim of the mentorDay acceleration programme is to get all our alumni to create gazelle enterprises!

Among the most important aspects that define gazelle companies we can find:

• They are small companies, although they often have more than 10 workers.
• These are companies that have among 2 and 5 years of lifealthough other scholars estimate their age to be between 5 and 10 years old.
• For 3 years in a row they maintain growth of between 20 and 25%.
• These companies are very innovative, especially in product, process and organisational aspects.
• Your profitability is usually higher than 15% by maintaining the balance between growth, costs and profits.

They are characterised by a small, efficient team that achieves profitability and rapid growth. They are startups who can become ponies, centaurs and even unicorns in a quick way compared to others. The pandemic has not been able to stop the gazelle companies.99.4% of the companies that were gazelles in 2016-2019 are still active in the first quarter of 2021.

The growth of this type of companies in Spain led them to reach 6.25% of the total number of companies with at least 10 employees in 2019 (they were 3% in 2012). Specifically, In the year before the pandemic, there were 5,800 gazelle companies, 3,000 more than in 2012. In the three-year period 2016-2019, the gazelle companies cn Spain, nearly 300,000 jobs were created in the last few years in net terms, more than half of the total net employment generated in Spain by companies with 10 or more employees. In three years they went from an average of 41 employees to 104!!!!

In terms of their relationship with job creation, while gazelles, as a whole, have a positive impact on employment creation, represent only 5% of the fabric of enterprises with at least 10 workers, they generate 63% of the jobs of all enterprises of that size. In the period under review, gazelles created an average of 67 jobs per three-year period of activity, for a total of 275,000 jobs.

Even in the serious context of economic crisis caused by the pandemic, there continued to be high-growth companies in the period 2017-2020.3% of the total number of companies of its size. By sector, the activities of Security and Investigation, Business Services, as well as Building Construction and Civil Engineering were the branches that contributed most to the generation of new high-growth companies in Spain.

In terms of the capital that these companies have at their disposal, the report shows that one third of them are foreign-ownedand that most of them are active in the digital economy sector.

Interesting report by the COTEC Foundation on Gazelles companies (+)

In which sectors are gazelle companies found?

• These companies are very important in the labour market of a country, as they create jobs at a much higher rate than other companies.
• Gazelle companies can be found in all economic sectorsAlthough it is often mistakenly thought that the sector that attracts the greatest number of gazelles is the technology sector, This is not the case.
• In Spain, the sector with the highest number of gazelles is the commerce sector, with more than one third of the total. 21% of total gazelle companies estimated to exist in the country.
• It is estimated that there are about 30,000 gazelle companies nationwide.
• In Europe, the sector with the largest number of gazelles is the information technology sector, with a 29% of the totalfollowed by real estate and construction.

ALTHOUGH IT MAY SEEM STRANGE AT FIRST GLANCE, THERE ARE ALSO A LARGE NUMBER OF GAZELLES IN AGRICULTURE.

Other interesting aspects of these companies:

• Another common aspect is that they tend to be located in the big city environment.
• They are proactive companies, that is, they are constantly analysing the potential risks that they may faceand taking action to mitigate or nullify their consequences before such risks occur (see TIP).
• As is known the growth of a company depends onabove all, of its management team, of the marketing of its product and of its possibility of business financing. Gazelle companies link their growth to the combination of these three dimensions.
• The gazelle companies se must be equipped with good equipment and skills, and must also continuously validate their environment.
• This type of company are often highly focused on a specific niche market or geographic area, and they also tend to have a very close relationship with their customers.
• Like negative feature it can be noted that because they are companies that generally take a lot of risk, they can also The fact is that they are more likely to stumble than other companies that are not growing at the same pace.

For this very reason, being a gazelle enterprise does not mean that their long-term viability is assured. This is mainly due to the fact that rapid growth also entails high financial needs that cannot always be covered.

The biggest problem when you prosper too fast is that you burn a lot of money and you can run out of cash.

The solution is to have a CEO and a good CFO who are skilled at monitoring cash flow and raising new financial resources.