Virtually ignored by the media, one of the most important drivers of America’s economy flies largely under the radar. It accounts for a third of private sector GDP and jobs, and has been growing even over the past four difficult years, yet it gets little attention from policy makers or the public. This overlooked, perhaps surprising, force in U.S. business? The Middle Market segment.
8. Small Business ? Big Business
<$10M ? >$1B
Annual Revenue Annual Revenue Annual Revenue
~6M ? ~2,000
Businesses Businesses Businesses
35% ? 31%
Employment Employment
Employment
8
9. th
the U.S. largest
Middle Market global
is the economy
MM
$3.8 Trillion in
Private Sector GDP
9
10. Small Business Middle Market Big Business
<$10M $10M - <$1B >$1B
Annual 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 extraordinary
economic challenges
and the recent recession,
Middle Market businesses
survived and grew.
11
13. Survivorship Rate by Business Sector
97% 82% 57%
Big Business Middle Market Small Business
14. Western Middle Market Companies
Net Jobs Contributions: 2007 - 2010
-37,528 New England
+192,483
MM
Midwest +2.2M
+459,917 Jobs
Big Biz NJ & NY
Mountain- -3.7M
Jobs +369,296
Plains
+162,383 Mid Atlantic
Southeast +330,154
Southwest +372,735
+323,715
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, providing
sustainable jobs and more
16
17. In business more than 20 years…
71% 70%
16%
Big Business Middle Market Small Business
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 in
Middle Market 43% 30% 27%
Big Business 18% 22% 60%
Markets sourced from
Middle 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 business Resemble
smaller businesses, practices; project multi-nationals
despite revenues strong growth
$9.3T revenue 34% 15% 51%
195,00 firms 80% 11% 9%
40.7 million
employees
39% 15% 46%
21
51. Growth
Champions Rest of MM
72% Successfully strengthen
customer relationships 53%
Industry leading marketing
44% and communications
capability
28%
41% Have a
social media strategy 20%
51
55. Growth
Champions Rest of MM
66% Innovators in new processes
43%
54% Invest in innovation & new
product development 29%
44% Dedicated
funding for R&D 25%
55
57. Growth
Champions Rest of MM
66% Set formal annual growth
targets for each fiscal year 31%
58% Have formal process to track
growth targets 33%
61% Contain costs through
operating efficiency 37%
57
58. Middle Market
Growth
Champions
Distinguishing Sharper customer focus
Characteristics
Broader geographic vision
Invest in innovation
Strong management culture
Superior talent management
58
59. Growth
Champions Rest of MM
Recruiting
53% power to attract the skill
levels required 28%
Variable employee
55% compensation based on
growth targets
28%
29% Emphasis on employee
training & education 17%
59
61. The health of the Middle
Market is vital to
overall U.S. prosperity
61
62. Key Middle Market Learnings
• Huge U.S. economic contributor
• Resilient - job creator even in tough times
• Foundation of communities
• Diverse and complex
• Much to learn from Growth Champions
66. Begin Middle Market
National Dialogue and Advocacy
• Increase understanding of the Middle Market
• Strengthen andIncrease and
Attract the best
build capabilities
Strengthen and
• Attract the best and of today… to
The rest brightest talent
brightest talent of
understanding to
build capabilities
Middle MarketMiddle Market
firms
Middle Market firms
the