Wharton recognizes city's top 100 small business ventures

Many of the study's 'Philly 100' are located in the nearby suburbs. Does $6 million in annual revenues and a 391 percent annual growth rate sound too good to be true? For the Philadelphia area's top 100 small businesses, these numbers are a reality. The statistics represent the average of 100 local small businesses recognized by the Wharton Small Business Development Center. A veritable gospel for local investors, the "Philadelphia 100" annually ranks small businesses based on their previous three years of sales performance. Some results of this handy "Who's Hot" list are not surprising: service and technology companies sizzle, and a health care firm -- American Healthcare Services of King of Prussia -- ran away from the pack with a whopping 7775 percent growth rate between 1993 and 1995. And following a recent trend, the location of most of the businesses was no surprise -- the suburbs. In fact, only 12 businesses of the 100, and a mere two of the top 10, are located in Philadelphia County. The eight-year history of the survey has seen a steady move to the suburbs, said project director Stephanie McAlaine. According to McAlaine, this transition is simple economics -- as businesses become service- and technology-oriented and communication becomes cheaper, proximity to foot traffic loses its value. "Unless you're a retailer, location is [now] a less vital fact in business," she said. Philadelphia's Director of Commerce Steve Mullin agreed that growing businesses have been leaving the city. But he stressed that many of the prospering businesses grew out of smaller entrepreneurial projects at University's Science Center. Mullin also underscored the importance of regional development. "We'd rather have businesses [that leave Philadelphia] go to Valley Forge than North Carolina," he said. What is surprising about the 100 are its demographics. Seventeen percent of the businesses are owned by women, a rate far above the national average of 10 percent. And although 50 percent of the businesses employ family members, only 20 percent call themselves "family businesses." McAlaine speculated that business owners want to avoid being seen as "mom and pop shops." Moreover, the vast majority -- 82 percent -- of the 100 are owned by thirty- and fortysomethings. "There is a school of thought that says people get this rush" from starting a business, then bore of maintaining it, said McAlaine. Older people with more children are less likely to take entrepreneurial risks, she said. The Philadelphia 100 project culminated with the Philadelphia 100 Conference at the Pennsylvania Convention Center Wednesday. A sort of Rotary Club for entrepreneurs, the conference is intended to bring together small businesses and potential investors. So what does Wharton's Small Business Development Center get for its effort? A chance to promote its service -- management consulting -- through increased name recognition and exposure at its conference. The Development Center, which each year receives 40,000 to 50,000 applications for the Philadelphia 100, considers only companies with less than $25 million in annual revenue. The rankings are co-sponsored by the Philadelphia Business Journal and the Entrepreneurs' Forum of Greater Philadelphia.