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Height of pole is direct result of your vision

Each week, as I write these columns, I often think they may be too simplistic for the many CEOs, CFOs, and other chiefs among the readership of this paper. Many of you have experiences at levels I have never sought or achieved.

Recently, however, at the governors' conference in St. George, I heard something that made me think that perhaps I am correct in trying to serve the small-business community with which I'm most familiar. It was announced that of the 52,000 businesses in Utah, 49,000 businesses have 19 or fewer employees.Prior to harvesting my company, designated by Inc. Magazine as one of 500 of the nation's fastest-growing private companies, I had a total of 50 employees in eight offices in six states. However, since six of the operations were separate "S" corporations, each was a small business with only one office having more than 19 employees. Therefore, my business experience fits into the profile of the vast majority of the business owners in the state.

Perhaps I have become caught up in what happens to university students, especially MBA candidates, who most often spend their time discussing high finance, such as mergers between mega-banks or cable companies and such.

While this is important, I believe all of us need to realize just how many small independent businesses there are in the United States. Perhaps the following metaphor will help us all appreciate the variety in the size of businesses.

Suppose we lined up flagpoles in a straight line across the United States, each representing one of the roughly 21 million businesses in order of size of annual revenues. These flagpoles would stretch along an imaginary 3,555-mile road from San Francisco to New York. There would be 5,907 businesses per mile, fewer than one business per foot.

If we said each increasing foot of the flagpole represented $10,000 worth of annual sales, the line of flagpoles would be a very interesting sight.

A row of poles less than two feet high would stretch from San Francisco to Reno.

Near Columbus, Ohio, about four-fifths of the way across the nation, the flags would fly only about 10 feet in the air, representing $100,000 in annual revenues. This would represent 80 percent of the businesses.

However, the closer we get to the East Coast, the faster the size of the flags would grow. Three thousand businesses in the country have sales of more than $500,000. These flagpoles cover less than a mile and are flying 50 feet in the air.

The next one-third of a mile is occupied by the 2,000 flags which represent more than $1,000,000 in sales. These flagpoles are more than 100 feet in height.

The last 1,100 flagpoles would reach to cloud height of more than 5,000 feet. These flags represent sales of more than $50,000,000 annually.

But this is not the end of the route. On the last 100 feet of the last mile, we would find the 100 largest firms. They have sales of billions of dollars, so their flags are miles above the clouds.

Along the last 10 feet of the road, there are the 10 largest companies. Their sales are billions and billions of dollars. Their flags fly hundreds of miles in the air.

All of these companies started out as small entrepreneurial firms. The difference is the size of the founders' visions, the strength of their teams, the age of the companies, and the worth of the idea.

How tall is your flagpole this year? How about next year, and in five years? In many cases the height of your flagpole is a direct result of your vision.

Author's note: The above material was adapted from an idea first published on Page 43 of "Economics." Explained by Robert L. Heilbroner and Lester C. Thurow.