Frequently Asked Questions (FAQ)
about the PROFIT 500 and STARTUP 50
Benefits of participation
1. What is the PROFIT 500?
Celebrating its 29th anniversary in 2017, the PROFIT 500 ranking of Canada’s Fastest-Growing Companies ranks Canada’s top private and public companies based on five-year revenue growth. Results of the annual ranking, with stories profiling the growth leaders who make the list, will be published in a special report in the October issue of Maclean’s magazine (reaching 2.6 million readers from coast to coast) and at CanadianBusiness.com.
2. What is the STARTUP 50?:
We love startups, too! We also celebrating the growth of younger companies with the STARTUP 50, a special companion ranking of Canada’s Top New Growth Companies, ranking public and private firms on two-year revenue growth.
3. Why should my company enter the PROFIT 500 or STARTUP 50?
The PROFIT 500 and STARTUP 50 are designed to celebrate winning companies, and past winners report they have benefited in many ways from their appearance on the list. In addition to national media coverage in Maclean’s and at CanadianBusiness.com, many winners get publicity from local and industry-specific media outlets. It is also common for winners to see increased employee motivation, receive industry accolades and make contacts with potential new customers and collaborators. We also honour winning firms at an exclusive CEO Summit, featuring top-tier speakers and unparalleled networking opportunities. Finally, there’s also the sheer satisfaction that comes from knowing your business is among Canada’s best.
4. How are the PROFIT 500 and STARTUP 50 ranked?
The PROFIT 500 ranks firms by their percentage sales growth over the past five years. For the 2017 ranking, participating firms must reveal their gross revenues for 2011 and 2016 (or 2012 and 2017, where 2017 results are available).
The STARTUP 50 ranks younger companies (founded after July 1, 2011 for the 2017 ranking) on two-year sales growth. Participating STARTUP 50 candidates must reveal their gross revenues for 2014 and 2016 (or 2015 and 2017, where 2017 results are available).
5. What financial information will be published about the companies?
To best serve participating companies, PROFIT adheres to the following guidelines regarding the financial information we publish:
- Revenue figures for the most recent year (e.g., 2016) will be published only as a range (e.g., an actual revenue figure of $3.7 million will be published as “$2-5 million”)
- We will not publish revenue figures for the base year used in our calculations (e.g., 2011 for PROFIT 500 candidates; 2014 for STARTUP 50 candidates), though we will require that information for verification purposes
- We will not publish any information about the profitability of individual companies
- Sample: The financial accompanying a winning firm’s 2017 PROFIT 500 listing might be presented like this: “EntrantCompany Ltd. / 2016 revenue: $2-5 million / 5-year growth: 127%.” (Click here to review the information published on 2016 winners)
6. How is revenue recognized for the ranking?
PROFIT defines gross annual revenue per generally accepted accounting principles (GAAP). Sales that cannot be booked as revenue under GAAP do not count for the purposes of the PROFIT 500. (For instance, a travel agency can claim as revenue its commissions on airline tickets sold, but not the total dollar value of the tickets.) Gross revenue must be reported net of returns and discounts. Franchisors must report corporate revenue only.
7. How are candidates’ claims verified?
All candidates must submit complete financial statements for the fiscal periods used to calculate a five-year (PROFIT 500) or two-year (STARTUP 50) growth rate. Our policy of verifying financial statements is what gives the PROFIT 500 and STARTUP 50 credibility, and is a mandatory step for prospective winners. Companies that fail to provide financial statements will not be considered for the PROFIT 500 or the STARTUP 50.
8. Who can enter the rankings?
To qualify for the PROFIT 500 ranking of Canada’s Fastest-Growing Companies, or the STARTUP 50 ranking of Canada’s Top New Growth Companies, a company must:
- Be headquartered in Canada with significant operations in Canada
- Be independent (i.e., not a division or subsidiary, unless the parent company is a holding company)
- Have majority Canadian ownership if owned by private individuals or companies. (Public or venture-backed companies with 50% or less Canadian ownership will be judged by PROFIT on a case-by-case basis)
- Operate at arm’s length from related companies that have also declared their candidacy for the ranking (See “Can related companies apply separately?” below)
9. What are the revenue requirements for the PROFIT 500?
There is no maximum revenue limit for the PROFIT 500. Minimum revenue requirements apply as follows:
- In the most recent fiscal year used in the five-year growth calculation (e.g., 2016): PROFIT 500 companies must have revenue of $2 million or more
- In the base year used in the five-year growth calculation (e.g., 2011), qualifying companies must have been generating operating revenue
- In the base year used in the five-year growth calculation (e.g., 2011), any companies with revenue of less than $200,000 will have their revenue for that period lifted to $200,000 for the purpose of calculating five-year growth that is not grossly exaggerated by immaterial differences in the base-year revenues of otherwise equal candidates (for instance, a company that grows from $1 to $2 million would have a higher growth rate than a company that grows from $2 to $3 million). Here’s a sample calculation that shows how this works: A company that reports 2016 revenue of $2.2 million and 2011 revenue of $100,000 would be assigned the minimum 2011 revenue of $200,000, resulting in a five-year growth rate of 1,000%: (2,200,000 – 200,000) / 200,000) * 100 = 1,000%.
10. What are the revenue and eligibility requirements for the STARTUP 50 ranking of Canada’s Top New Growth Companies?
The STARTUP 50 is meant to celebrate companies that have demonstrated strong growth, but that are not yet five years old (and are therefore do not yet have five years of sales data to measure). We will do that by ranking startups based on two-year revenue growth. Companies are eligible for the 2017 STARTUP 50 if they started operations between July 1, 2011 and July 1, 2014. There is no maximum revenue limit. Minimum revenue requirements apply as follows:
- In the most recent fiscal year used in the two-year growth calculation (e.g., 2016): startups must have revenue of $1 million or more
- In the base year used in the two-year growth calculation (e.g., 2014), qualifying companies must have been generating operating revenue
- In the base year used in the two-year growth calculation (e.g., 2014), any companies with revenue of less than $200,000 will have their revenue for that period lifted to $200,000 for the purpose of calculating two-year growth that is not grossly exaggerated by immaterial differences in the base-year revenues of otherwise equal candidates (for instance, a company that grows from $1 to $2 million would have a higher growth rate than a company that grows from $2 to $3 million). Here’s a sample calculation that shows how this works: A company that reports 2016 revenue of $1.2 million and 2014 revenue of $50,000 would be assigned the minimum 2014 revenue of $200,000, resulting in a five-year growth rate of 500%: (1,200,000 – 200,000) / 200,000) * 100 = 1,100%.
11. Are non- and not-for-profit enterprises eligible?
12. Are franchisors or franchisees eligible for the PROFIT 500 or STARTUP 50?
Franchisors are eligible; Franchisees are not. However, franchisors are ranked by corporate revenue only; they should not report system-wide sales.
13. Can related companies apply separately?
In the case of related firms that do not operate at arm’s length from one another, only one of those companies is eligible. Also, divisions and subsidiaries are ineligible.
How to enter
14. How do I enter my company in the PROFIT 500 or STARTUP 50?
We use the same form for both rankings. Simply fill out a short ballot before the entry deadline of May 31, 2017. If it looks as though your firm is a contender, we’ll contact you with next steps.
15. How much does it cost to enter the PROFIT 500 or STARTUP 50?
There is no entry fee for either program.
16. Should we report fiscal or calendar revenues?
Fiscal. For the 2017 ranking, you must report revenues from the most recent fiscal year completed through April 30, 2017 and for the fiscal year five years prior (two years prior for STARTUP 50 candidates). For instance, the PROFIT 500 will rank firms with a September 30 year-end on the basis of the fiscal years ending September 30, 2016 and September 30, 2011 (September 30, 2014 for STARTUP 50 candidates). In the case of a January 31 year-end, we require revenues as of January 31, 2017 and January 31, 2012 (January 31, 2015 for STARTUP 50 candidates).
17. What if my fiscal year end has changed in the past five years?
We encourage you to enter the rankings. Each case will be considered individually.
18. What if my company reports in U.S. dollars?
Submit your financial information to PROFIT in whatever currency you used for reporting.
19. What happens after I enter the PROFIT 500 or STARTUP 50?
If your company’s growth rate appears to place you on either list, in early 2017 we will contact you to fill out an in-depth candidate’s questionnaire and to verify financial information. Once those steps are complete, if your company remains eligible, we will send your chief executive an email to confirm the financial data we have on file is correct. If your company makes the ranking, you will be informed several weeks in advance of the list’s release, though please note that we will not reveal any company’s exact position until the ranking is released.
Terms and conditions
20. Can my company be disqualified?
PROFIT, Canadian Business, Maclean’s and L’actualité reserve the right to remove any company from the PROFIT 500, STARTUP 50 and/or les Leaders de la croissance ranking[s] at any time if we determine the company to be ineligible, or that inclusion of that company would discredit PROFIT, Canadian Business, Maclean’s, L’actualité or their respective ranking programs. PROFIT, Canadian Business, Maclean’s and L’actualité also reserve the right to withdraw invitations to events related to the rankings.
21. Errors in the rankings
On rare occasions, the growth rates of participants in the PROFIT 500 program are misstated due to incomplete or inaccurate information provided by participants or errors in the interpretation of that information by PROFIT. In such instances and upon the request of the participant in question, we may publish a correction notice at our sole discretion to the rankings at PROFIT500.com. <!– in a subsequent issue of Canadian Business magazine and possibly, at the sole discretion of PROFIT, on PROFITguide.com. Published rankings will not be adjusted to reflect any such corrections. –!>
For more information
22. I still have a question. Who do I call?
If you need more information, please email the PROFIT 500 research team at firstname.lastname@example.org or call our toll-free hotline at 1-800-713-GROW (1-800-713-4769).
“Being highlighted by PROFIT is very beneficial for businesses. I appreciate the visibility it enables our company to have. It creates an incredible amount of interest in our company.”
iBwave Solutions Inc., Montreal