Middle Market Companies’ Challenges in 2015
It’s reassuring to know what your peers are thinking when you’re a corporate CEO or CFO. For example, what do your peers consider to be the biggest challenges facing them in 2015?
This was the question posed in a survey sponsored by Axial Market, the online M&A marketplace, as part of an effort by several organizations like Axial to better understand middle market companies.
The survey included corporate executives of middle market companies, which their participating organization, the National Center for Middle Market (middlemarketcenter.org), defines as companies with revenues between $5 million and $1 billion, or an employee count between 25 and 1,000. Survey respondents came from many industries and all US geographic regions.
Biggest Concern for 2015
So what did middle market corporate executives respond with as their biggest concerns?
Perhaps not surprisingly, middle market company executives listed regulation and government policy as the biggest potential challenge. This issue is clearly beyond the control of middle market company management. It most certainly has a major impact on customer demand as well as the cost of doing business.
The specific issues varied by industry. Life science companies worry about the impact of healthcare reform and FDA actions. Financial services companies worry about greater financial industry regulation. The energy sector focuses on environmental regulation and energy prices.
I take it as an optimistic sign that the next two most mentioned challenges involve how to manage growth. Middle market company executives listed (i) finding funding, and (ii) finding personnel.
Finding funding, whether working capital or growth equity, is a typical goal of clients at Monarch Bay. While the financing environment has improved dramatically since the downturn of ‘08/’09, the financing market could be described as variable or unpredictable. New capital providers have formed to replace those who left the financing market. So, capital is available, it’s just more difficult to find.
Finding personnel is a surprising challenge, given the large population of unemployed or under-employed workers, and the numerous electronic clearinghouses, such as Monster, which now exist. There seems to be an opportunity for an entrepreneurial firm to help middle market companies find their personnel.
A summary of the survey results, including regional and industry variations is available through this link.
At Monarch Bay, we can’t fix problems of government policy and regulation, but we can assist in finding financing. Please contact us to discuss your company’s capital needs.
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