Every year, the Fortune 500 list ranks American businesses according to their revenues, based on their previous financial report. This list is then published, and the next 500 companies are included in the Fortune 1000.
Seeing your business on any of these lists is quite a significant achievement. However, there are several eligibility criteria in order to make it on the list.
If your dream is to see your business on the Fortune 500 List, you need to read on to find out all the details. Let’s start!
Firstly, the Fortune 500 list ranks American businesses. This statement implies a few specific aspects. Firstly, operating in the US and having a company incorporated in the US is a must. The company can be either private, public, or even a cooperative, such as a credit union or mutual insurance company.
However, it is crucial for the company to file its financial statements with a government agency. If the company is consolidated into another firm for reporting reasons, it does not qualify for the Fortune 500 list.
There are several important rules when it comes to sales revenues reported by the company, too. Companies are ranked based on the reported revenues during the last financial year. Not all companies use the same fiscal year, but they are similar. If the company has a subsidiary and its revenues are consolidated into those of the company, they are also included.
Although the Fortune 500 list also displays the profit after tax for every firm, it is not part of the eligibility criteria. For instance, a business can be part of the Fortune 500 list without having any profit – or even making a loss.
Actual Revenue Required
If a business owner wants to make it to the list, the pathway is not so straight. In fact, there is no given dollar amount of revenue that you should have to be considered for the Fortune 500 list. In other words, the business must outperform all the other businesses, which means that the revenues required differ each year.
When the list was established in 1955, businesses needed a minimum of $49.7 million in revenues in order to be listed on Fortune 500. However, in 2018, the last place on the list went to CINTAS, a workwear vendor with revenues that summed up to $5.428 billion.
Fortune calculated the threshold in 2013 and concluded that the revenues increased by approximately 4.3% over decades, after adjusting for inflation. Thus, if you want to make it to the list, you could use this estimate to find out a reasonable revenue goal over the next 10-20 years.
Longevity seems to be another key aspect when considering the Fortune 500 List. Unless your business is almost a major one, you should consider the next decades in order to make it to the list. Some companies, such as IBM, even date back to the 19th century, while Google was founded 20 years ago.
Apart from having long-term objectives, Fortune also mentioned other essential attributes in 2013. They stated that adaptability is important, as making it to the list will take many years. This means that your current offerings or the existing business might have to be changed and adapted to the future.
It would be best if you adapted to social trends, customer preferences, and more, to keep delivering them value all of these years. For instance, IBM used the personal computer as a business tool, but they stopped building them many years ago.
Seeing the Big Picture
Some other aspects are more difficult to pinpoint. Big ideas, innovation, and vision are such examples. For instance, car maker Tesla made it to the 260th position a few years ago, even though it was on the verge of failure a few times.
Teams and employees are important, so the management’s ability to attract and retain talent is critical. Companies with strong growth on a year-on-year basis also have higher chances of making it on the Fortune 500 list.
All in all, it is vital to ensure sustainable growth for years and decades to make it to the Fortune 500 list. Great ideas and innovation are sure ways to attain your dreams. If you want to excel, create long-term objectives, and stick to them, despite setbacks!