Smart50 shine amid gloom

Melbourne dished out some spectacularly bad weather last night but it wasn’t enough to dampen the enthusiasm of the great crowd that assembled for the Smart50 awards ceremony.

We always come away with a real buzz from the awards, which were sponsored by accounting and financial services firm WHK.

This year it there was a little extra excitement in the room because we were getting to know so many new faces thanks to the fact that 42 of the 50 companies on the list were new members.

That’s incredible turnover, as I write in my analysis of the 10 big trends of the class of 2011 and it underlines the fact that there is a new breed of entrepreneur coming through who have been heavily influenced by the GFC and learned to succeed despite difficult economic conditions.

The average growth rate of the class of 2011 – 97% compared to 60% last year – is spectacular given the multi-speed economy that many of those companies are battling.

The fact that this year’s list includes companies from industries that have done it very hard over the past few years – such as manufacturing, transport and even agribusiness – is even more impressive.

Talking to the entrepreneurs last night it become clear that something of a new growth model is emerging.

For many years that model has been fairly simple – find a niche, gain a strong foothold, borrow from the bank and dominate that niche. Competitive advantage came from building size in a relative short space of time.

But all that has changed, partly due to the GFC and the post-GFC period and partly due to rapid changes in technology.

For many of the companies on the list the rapid, bank-fuelled expansion we’ve seen in previous years is not possible – they cannot get the bank funding they need to expand rapidly and in some cases they don’t want it.

What we are seeing instead are business models built around flexibility and agility.

The Smart50 are deliberately planning and running their businesses around the idea that products, projects and new business areas may need to be scaled up or down very quickly to adapt to changing market circumstances.

SMEs have always been nimble, but in the current climate the ability to adjust, tweak and in some instances completely remake your business is a huge competitive advantage.

And the Smart50 has that ability in spades.