Over the years, the middle market has experienced some impressive growth rates and has come to be defined as the U.S.’ largest and most dynamic group of businesses.
Encompassing a tremendous range of businesses in every industry and every corner of the country, the middle market cannot be categorized as easily as it’s Main Street or Fortune 500 counterparts. From manufacturing plants to biotech labs, these companies build, manufacture, distribute, and invent — the cogs and wheels of our commercial community.
Companies in the middle market can range from 25 to 1000 employees, and have revenues from $5 million to $1 billion. These companies also vary in their stages of the corporate life cycle — some still getting their foundation built, others expanding internationally, and others are hungry for acquisition targets. While the definition of a middle market company can vary, one thing remains constant – these companies are the heartbeat of the American economy.
Some of those statistics — that the middle market employs close to 50 million Americans or boasts a growth rate double that of the S&P — supports the idea that the middle market is vital to our country’s continued economic development. Even so, these companies largely fly under the radar — producing, selling and building behind the scenes. They are neither your local boutique nor big box retailer; they are neither the hot new tech start up nor Nasdaq-traded conglomerate. Sometimes, this “middle of the road” status — accentuated by their fundamental disparateness — can cost them the visibility they deserve. As these companies strive for expansion and innovation, identifying and addressing their unique challenges will be essential in helping them grow.
The challenges these businesses face have to do with attracting the right talent, finding new customer segments, maintaining culture through expansion, adjusting to policy, and finding capital partners to help them grow, among many more. Because the owners of middle market companies often spend their days with their sleeves rolled up – walking factory floors, testing in labs, or overseeing assembly lines — not much time is dedicated to addressing these challenges and finding solutions.
At Axial, we’ve found that middle market business owners identify most with other owners in their same industry. In recently speaking with a manufacturer from the west coast, we learned about the challenge he is experiencing when trying to hire engineers deciding between tech startups in Silicon Valley. A manufacturer in North Dakota is also struggling to find technical talent to grow his production, but for very different reasons. Regardless of the individual circumstances of each business, these owners jumped at an opportunity to discuss with each other their experiences and the issues that are affecting their industries at large. Together they brainstormed ways to incentivize, revitalize, and attract new talent to reshape their workforces.
This is just one example of how sharing best practices and unique experiences can help owners find solutions for the challenges they face. And this is just business owner-to-business owner. Now think about the partners and policymakers that also affect how these businesses survive and prosper. In a questionnaire we’ve begun focused on identifying the key issues these business owners face, over 80% of respondents have named a specific policy issue as one of the top things that will affect the growth of their business in 2015.
As we start a new year, one of our goals is to create a lasting conversation about how middle market companies will continue to grow – whether it’s changes they need to make within their own companies, or external factors to which they need to adjust. We’re inviting both business owners and their partners — including financial advisors, investors, customers and employees, suppliers, vendors, policymakers, and the media — to join this conversation and to identify by industry, company size, and geography. In doing so we will bring together the voices that can help find the best solutions to move the entire middle market to growth.
That is the origin of a new initiative we’re calling Middle Market Monday, an inaugural holiday focused on middle market businesses and creating a community where a conversation can live as a first step in achieving recognition, resources, and support for the middle market as a whole. We’ll celebrate the first Middle Market Monday on January 26, 2015 and before that date are asking business owners to visit www.middlemarketmonday.com and submit their perspective on how they will grow in 2015. So, if you are a business owner or partner of middle market companies, visit us and share your voice or email us at [email protected] with your thoughts.