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Mid-Market Businesses stuck in the middle with lack of specialised support

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Mid-Market Businesses stuck in the middle with lack of specialised support

By , March 4, 2020
Mid-market businesses - Succession Plus

“Clowns to the left of me
Jokers to the right
Here I am – Stuck in the middle with you”

– Stealers Wheel

The middle-market is aptly named, as it sits right in the middle of micro and small businesses (< $2mil turnover) and larger corporates (> $200mil turnover). It is also largely ignored by the government, regulators and lobby groups, making it difficult for mid-sized business owners.

Mid-sized businesses, depending upon which definition you use, are companies with revenue of $10 million – $500 million, belong in both and neither category.

They can access some of the advantages available to small businesses but are also subject to much of the same bureaucracy as big businesses, but without the scale and resources to absorb the time and costs as efficiently as the big end of town.

Only 4% of businesses in Australia are mid-market (approx. 83,000) and yet those businesses share 15% of total sales and pay over 19% of company tax. They outperform in all areas except government support and focused advice.

By definition, these businesses are more complicated. Though they often have more resources, they have a few of the issues of smaller business (access to capital and good advice) but are also often bound by the excessive regulatory framework of larger corporates. They are often still a family-owned business (at least majority family-owned) and therefore do not have the corporate governance structures businesses of this size probably warrant.

What makes it even harder is the fact that specialist mid-market advisers are hard to find. These businesses are typically too large for an accountant or business broker to work with but they are not yet large enough for the Big 4 accounting firms or the larger investment banks. Hence, stuck in the middle!

Succession Plus, however, is well placed to provide strategic and proactive advice to mid-market businesses on Business Succession and Exit Planning. Get in touch to be paired with a business adviser in your local area today. Also, check out our Mid Market Matters podcast for more information and tips on how to succeed once your business has reached mid-market size.

Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.