Why Mid-Market Companies Deal with the Tough Times Differently
Mid-market companies are very important to the economy of every country. There are several ways of determining whether an organization is in the mid-market. We can consider the number of employees, annual sales or revenues as well as market rank and financing transaction size.
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.
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.
US mid-market companies are often considered to have between 100 and 1,000 employees according to a 2009 IBM study, while an SAP study found these mid-market companies generate sales of between $30 million and $500 million which represents 1% of the number of all US companies and generates nearly 30% of corporate revenues.
In the UK the Ministry of Industry and Trade uses 50-249 as the number of employees to define a mid-sized firm. This definition indicated that 2% of the firms employed 14% of the workforce and provided16% of the annual sales.
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 expert in interim management services to mid-sized companies during their restructuring phase. Go to his website Mid-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
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