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.
Mid-market companies, also called mid-sized firms, typically have 100-499 employees, according to a study done by Ipso in 2006 in Canada, that found this sector comprises about 2% of Canadian businesses yet they invest in nearly half of all the IT spending in the country.
A study of mid-market companies in the US in June 2008 defined the mid-market as companies with annual sales between $5 million and $100 million. These companies represented 3% of the number of businesses but accounted for 30% of the jobs and 40% of the total annual sales in Indiana according to the Indiana Chamber of Commerce Foundation.
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.
A more common definition for mid-market companies elsewhere in the world tends to be 50-249 employees, according to the UK Department of Industry and Trade, and these mid-market companies employ about 14% of the workforce and generate 16% of the annual sales yet represent 2% of the total number of companies.
As a rule we find most mid-market companies have 50 to 500 employees and a few go as high as 1,000 employees and most have sales somewhere between $10 million and $100 million with a few going as high as $500 million.
Mid-market companies lack the resources available to large companies who can leverage pricing and supplier discounts in the market as well as offer more incentives to attract and retain talented staff plus secure financing on more attractive terms than mid-market companies.
The smaller companies can also out pace the mid-market companies with faster decision making and lower overhead structures.
Many mid-market companies enjoy a long term view because they have found protected market niches or have been able to find ways to survive by changing slowly. However with the increasing volatility in the global economy, few mid-market companies have the luxury to change slowly. We see a mad scramble by these small mid-market management teams in recent years to find ways to change more quickly to cope with the volume of additional work that market changes have thrust upon them!
Stuart Morley MBA is a recognised authorityin interim management services to mid-sized organizations during their restructuring phase. Go to his website Mid-sized organizations 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.
