How Mid – Market Companies Are Different

There is considerable media coverage of large public companies and small mom and pop businesses but very little coverage of mid-market companies that are key players in every sector of the economy. What do we mean by mid-market companies? Well there several indicators of mid-market including: the number of employees, annual sales and market position.

In Canada a mid-market company normally refers to a company with somewhere between 100-499 according to IPSO and although they only represents about 2% of Canadian businesses they are big spenders when it comes to things like Information Technology accounting for nearly half of all annual Information Technology spending in Canada.

In the US mid-market companies are sometimes defined as having sales of $5 million to $100 million ( Indiana Chamber of Commerce Foundation Study) yet in 2008 this represented 3% of the number of businesses but accounted for 30% of the jobs in Indiana.

IBM in their 2009 study, defined mid-market companies as having 100 to 1,000 employees while a study by SAP defined mid-market in the US as firms earning between $30 million and $500 million.

The SAP study found that mid-market companies comprised 1% of the number of all US companies and generates nearly 30% of corporate revenues.

In the UK, the Department of Trade and Industry defines mid-sized firms as having 50-249 employees and these firms make up 2% of the firms in the UK but employ 14% of the work force and generate 16% of the annual sales. We find most studies define mid-market as companies with 50 to 500 employees but can be has high as 1,000 employees and generates annual sales of somewhere between $5 million and $100 million with a few definitions stretching the range to $500 million. Large competitors, especially public companies have a considerable advantage over mid-market companies as they have more influence on market prices, find it easier to attract and retain talented staff, or secure financing and negotiate supplier discounts on more attractive terms than mid-market companies. Mid-market organizations also have disadvantages compared to smaller companies who can react quickly to changing markets.

Therefore, mid-market companies often survive in markets where taking the long term view is a priority rather than short term profits.

In the same way many mid-market organizations owe their success to being in the right market with the right product and service at the right time without realizing it at the time, and when markets shift without warning they don't recognise the change until it is almost too late to react. We find that during times of significant change, the volume and complexity of issues increases and mid-market companies become very vulnerable unless they recognise their inability to cope and ramp up their management strength to cope with the issues at hand. Stuart Morley MBA is a recognised expert in advising mid-sized companies during their restructuring phase. Go to his website Middle Market Companies in Trouble for more information including video clips, articles specifically for mid-sizedmarket organizations and order his recently co-authored book (with Gord Griffiths and Morris Slemko) called “Weather the Storm” Survival Guide for Mid Market Organizations. categories: turnarounds,restructuring,refinancing,rebuilding companies,re-engineering,change management,mid-market companies,management,leadership,business,family business

Trending Articles