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Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
Mm cleveland partnership presentation july 24 2012   final (1)
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Mm cleveland partnership presentation july 24 2012 final (1)

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Dr. Anil Makhija, Executive Director for the National Center for the Middle Market presented the results of the Q2 Middle Market Indicator at the Greater Cleveland Middle Market Forum on July 24, …

Dr. Anil Makhija, Executive Director for the National Center for the Middle Market presented the results of the Q2 Middle Market Indicator at the Greater Cleveland Middle Market Forum on July 24, 2012.

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  • 1. Greater Cleveland Middle-Market Forum July 24, 2012in collaboration with 1
  • 2. Engine of Sustainable Job CommunityEconomy Growers Pillars Middle Market ConclusionsIndicator Growth Resilient and ChallengesChampions Diverse 2
  • 3. Small Large ?Businesses Corporations 3
  • 4. Foundational,multi-sourced research 4
  • 5. Database Sources 5
  • 6. Comprehensive Survey 2,028 C-level interviews (total) 1,447 Middle Market decision maker interviewsPrincipals Company C-Level MD & EVP(Partners/Owner) Officer Execs 16% 51% 24% 9% 6
  • 7. Small Large ?Businesses Corporations 7
  • 8. Small Business ? Big Business <$10M ? >$1BAnnual Revenue Annual Revenue Annual Revenue ~6M ? ~2,000 Businesses Businesses Businesses 35% ? 31% Employment Employment Employment 8
  • 9. 9
  • 10. Small Business Middle Market Big Business <$10M $10M - <$1B >$1BAnnual Revenue Annual Revenue Annual Revenue ~6M 195,000 ~2,000 Businesses Businesses Businesses 35% 34% 31% Employment Employment Employment 10
  • 11. The Middle Market is resilient.In the face of extraordinaryeconomic challengesand the recent recession,Middle Market businessessurvived and grew. 11
  • 12. 82% Survivorship rate• Unprecedented credit crisis• Severe economic downturn• Sharply increasing commodity costs• Sweeping regulatory changes 12
  • 13. Survivorship Rate by Business Sector 97% 82% 57%Big Business Middle Market Small Business 13
  • 14. 14
  • 15. Jobs Contribution per Surviving Business (2007 – 2010) big business middle market +20 - 2,000 jobs per business jobs per business downsizing growing 15
  • 16. Community Pillars Middle Market firms are foundations of their communities, providingsustainable jobs and more 16
  • 17. In business more than 20 years… 71% 70% 16% Big Business Middle Market Small Business 17
  • 18. “Supporting the communities we serve is probably the most important part of what we do.” CFO, Wholesale Trade $500M and 2,150 employees 18
  • 19. Markets operated inMiddle Market 43% 30% 27% Big Business 18% 22% 60% Markets sourced fromMiddle Market 42% 35% 23% Big Business 20% 32% 49% Local/Regional National Global 19
  • 20. The Middle Market is diverse in revenue,geography, industry and structure 20
  • 21. $10-50M $50-100M $100M-$1B Operates more like Consistent Resemble smaller business practices; multi-nationals businesses, despit project strong e revenues growth$9.3T revenue 34% 15% 51% 195,00 firms 80% 11% 9% 40.7 million employees 39% 15% 46% 21
  • 22. The Middle Market isdiverse and complex 22
  • 23. Ownership Middle Market Diversity Structure Public Private Family Owned Local/Regional National Global 23
  • 24. Geography 24
  • 25. 25
  • 26. Geography Industry 26
  • 27. 27
  • 28. 28
  • 29. 29
  • 30. Middle MarketGrowth Champions A unique subsetwe can learn from 30
  • 31. 31
  • 32. 32
  • 33. Middle MarketGrowthChampionsDistinguishingCharacteristics Sharper customer focus 33
  • 34. 34
  • 35. Middle MarketGrowthChampionsDistinguishingCharacteristics Broader geographic vision 35
  • 36. 36
  • 37. Middle MarketGrowthChampionsDistinguishingCharacteristics Invest in innovation 37
  • 38. 38
  • 39. Middle MarketGrowthChampionsDistinguishingCharacteristics Strong management culture 39
  • 40. 40
  • 41. Middle MarketGrowthChampionsDistinguishingCharacteristics Superior talent management 41
  • 42. 42
  • 43. Where are we today?Quarterly release of MiddleMarket Indicator (MMI)MMI = forecasted revenuegrowth for the next 12 months 43
  • 44. Research Methodology What… • National Survey Of C-Level Executives • 1,002 financial decision makers in Private and Public Organizations Who… with $10 million-<$1 billion in Gross Revenue When… • Field Period: June 8-19, 2012 How… • Self Administered Online Survey • Past year growth • Anticipated growthInsight Areas • Confidence in economy • Challenges to growth • Detailed corporate profiling 44
  • 45. The Middle Market continuesto be an engine of growth andjob creation. 45
  • 46. Financial Performance –Total Middle Market Middle Market Performance & Projections Past Year Reported Gross Revenue Next 12 Month’s Revenue Outlook 70% Firms Reported Growth 69% Firms Reported GrowthQ1 6.9% 5.2% 16% Firms Reported Decline 9% Firms Reported Decline 62% Firms Reported Growth 61% Firms Expect GrowthQ2 6.1% 4.8% 16% Firms Reported Decline 6% Firms Expect Decline The proportion of firms indicating growth in YOY revenues is lower in the 2nd Quarter 46
  • 47. Past Year FinancialPerformance– Gross Revenue By Revenue Segment $10M - <$50M $50M - <100M $100M – <$1B 2Q 1Q 2Q 1Q 2Q 1QBase: Total Respondents (574) (558) (163) (186) (263) (258)Mean Total growth 5.8% 6.0% 5.3% 6.5% 7.0% 8.3% • Growth is strongest among larger firms than smaller organizations. • Those in the $50mm to $100mm segment are growing at a slower pace than their peers. 47
  • 48. Past Year FinancialPerformance– Gross RevenueQ1 Manufacturing, Retail Trade, and Healthcare lead the way while Construction remains a laggard.Q2 Manufacturing, Financial Services and Services lead the way while Retail Trade has become the laggard. By Industry Manufact- Wholesale Retail Construc- Financial Health- Services Other uring Trade Trade tion Services care 2Q 1Q 2Q 1Q 2Q 1Q 2Q 1Q 2Q 1Q 2Q 1Q 2Q 1Q 2Q 1Q Base Total (169) (157) (172) (176) (66) (66) (44) (47) (67) (63) (178) (168) (81) (53) (223) 272)Respondents Mean Total growth 8.5 7.2 7.3 9.8 5.1 6.9 4.5 7.9 6.5 1.6 7.5 7.4 5.1 9.3 6.1 5.6 48
  • 49. Previous Year Employment Growth –Total Middle Market 2Q Total 1Q Total Decrease Decrease Increase Increase Stayed The Same Stayed The Same 2.0% Total Growth 1.5% Total Growth Despite headwinds, the middle market continues to add jobs at the same rate as the 1st quarter. 49
  • 50. Previous Year Employment Growth –Revenue Segment By Revenue Segment $10M - <$50M $50M - <100M $100M – <$1B 2Q 1Q 2Q 1Q 2Q 1QBase: Total Respondents (574) (558) (163) (186) (263) (258) Total Growth 1.7% 1.2% 2.5% 0.7% 2.2% 2.3% (Mean) Q2 Employment growth is stronger among midsized Middle Market Firms. Q1 Employment growth was stronger among larger Middle Market Firms. 50
  • 51. Previous Year Employment Growth –Industries Total MM 2Q 1Q 2Q: Services Base: Total Respondents (1000) +4.8% (1002) +2.0% Jobs grew Manufacturing +2.6% +3.4% most in: Wholesale Trade +0.7% +0.5% Retail Trade -0.4% +1.7% Services Construction +1.1% -2.7% Fin. Services Financial Services +3.6% +1.6% Healthcare +1.9% +3.5% Manufacturing Healthcare Construction 51
  • 52. Employment Growth – Future Outlook 2Q Only One third of middle market firms expect to add jobs over the next 12 months. By Revenue Segment $10M - <$50M $50M - <100M $100M – <$1B Base: Total Respondents (574) (163) (263) Mean Total Growth 1.8 1.5 1.8 By Industry Manufact- Wholesale Retail Financial Services Construction Healthcare Other uring Trade Trade ServicesBase: Total Respondents (169) (172) (66) (44) (67) (178) (81) (223) Mean Total Growth 3.5 1.5 1.5 -0.1 2.9 2.0 2.2 2.2 52
  • 53. But going forward, there are headwinds… 53
  • 54. Confidence: By Geography Global US Local Economy Economy Economy 2Q 1Q 2Q 1Q 2Q 1Q Confident Somewhat confident Somewhatnot confidentNot Confident Confidence in both the Global and US economies is dramatically lower than in the 1st quarter. 54
  • 55. Key Challenges –Total Middle Market Highly/Very Challenging 2Q 1QThe cost of health care 90 92The cost of doing business 89 88Ability to maintain margins 85 86The uncertainty of how government actions will impact my business 85 81Ability to pass on increased commodity costs 79 75Ensuring compliance with regulation 75 69Ability to expand into new markets domestically 75 -Effectively managing through external change 73 76Ability to attract, train and retain talent 70 77Ability of your organization to innovate new products, services or processes 67 76Increased domestic competition 66 68Corporate tax issues 65 59 Healthcare costs and other margin pressures are most challenging to MM Leaders. Regulation and uncertainty of government actions are also key issues. 55
  • 56. Actions Likely with Additional $ -Total Middle Market 2Q Total 1Q Total Hold Hold Cash CashInvestIt Invest It Leaders are far more likely to hold an extra dollar as than in Q1. 56
  • 57. The MMI – Middle Market IndicatorGoal: To provide an ongoing measure of thestrength of the Middle Market that is predictive ofgrowth, reliable in its reporting, and enhancesNCMM’s thought-leadership reputation 57
  • 58. MMI Q1 = 5.2%MMI Q2 = 4.8%MMI: Predicted RevenueGrowth for the next 12months 58
  • 59. The health of the Middle Market is vital to overall U.S. prosperity 59
  • 60. National Center for the Middle Market Corporate Outreach & Student Learning &Research & Influence Growth Accelerator Experience Become the nation’s thought leader in the Middle Market 60
  • 61. Grants Research Middle Market Indicator White PaperCorporate Outreach Executive Education Growth Champion CEO Series Middle Market Career Fair Student Activities Fisher Invitational featuring a Middle Market Firm www.middlemarketcenter.org 61
  • 62. 62
  • 63. www.middlemarketcenter.org 63
  • 64. Greater Cleveland Middle-Market Forum July 24, 2012in collaboration with 64

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