The report noted that mid-market enterprises are doing this while comprising less than 1% of all U.S. businesses, making a tremendously outsized economic contribution across industries.
Why is this? “Mentally, the CEOs of mid-market firms are the ones more than any other population [of CEOs] who are focused on growth,” Julie Weeks, lead researcher for the index, told Mid-Market CEO Briefing. “Very small firms aren’t as focused in the very long term on scaling the business, while the mid-market firm is where a lot of the scaling is happening.”
Another interesting aspect of Weeks’ research revealed that the seven states where middle-market firms are over-represented compared with other sizes of companies are all in the Midwest or Eastern seaboard.
“Part of that is industry distribution,” she explained. Mid-market firms “are more likely than average to be in manufacturing, and part of that is manifested in these regions. They also are major states for wholesale trade. And manufacturing and distribution are the core of the nation’s economy. This shows that there’s a lot of life left in some of those Rust Belt states.”
Indeed, manufacturers are heavily represented in mid-market firms across America. And while the mean age of owners of middle-market companies is only 42, there are so many manufacturers in part “because these are businesses that were started a generation ago, back when manufacturing was very robust in a lot of these states.”
Nearly 98% of middle-market firms are privately owned, on average employing 368 workers and generating $45.1 million per firm per year. That compares with 23,226 employees and $7.7 billion on average among larger enterprises and an average of four employees and nearly $276,000 in average revenues among small companies.