Private companies continue to grow at a healthy pace and experience strong profit margins, according to the latest Private Company Report from Sageworks, a financial information company.
According to the report, private companies were generating an average annual sales growth of about 10% as of May 31st, or about the same growth they were seeing a year ago. The estimate is based on the sales growth reported by companies filing annual statements in the six months ended May 2013. Companies also continued to expand their profit margins in this period, reporting net profit margins close to 7%.
A sector analysis showed that service industries like consulting companies, architectural firms and computer systems design companies are seeing strong sales growth. Entrepreneurs who may be looking for business ideas with minimal upfront investment and minimal required staff may be interested in the health of these industries.
Sageworks chairman Brian Hamilton pointed out that, despite healthy sales growth and profit margin expansion, “Companies remain very resistant to increasing their overhead.” The healthy performance of these companies coupled with their tepid hiring practices remains to be a troubling paradox, according to Hamilton.
To read the full Private Company Report click here.