Ever wonder what characterizes a business like yours?
If you have a middle market company, you’re part of only 3% of all U.S. companies. Your firm is valued somewhere in the $5M to $1B range. If you live in the Metro Denver area, your firm is one of about 1,400 similar firms employing over 589,000 workers–including local brands like Hammond’s Candies, Square Two Financial, Smashburger and Peak Resources. Your firm is most likely privately held.
Your firm and its peers have a disproportionate influence in our economy: these firms account for one third of the private sector economy and have created 70% of new jobs added since 2007. In Colorado, these second stage companies currently create 7% of Colorado’s revenue and one third of our jobs.
If your firm is like most, it
- tends to be closer to your customers and
- is more fiscally conservative;
- it is usually slower to adopt innovation or exploit foreign markets.
Your primary concerns are around
- containing health care costs,
- maintaining margins and controlling business costs,
- attracting, training and retaining talent.
In the midst of these pressures, it’s easy to over-identify with the challenges of your firm’s situation. To gain some perspective on the challenges, consider leveraging a benefit hidden in your firm’s identity as a corporation [click here for a past discussion on this].
Attracting, training and retaining talent is the lifeblood of any firm. One mid-market firm I work with is typical: they are now focused on building managerial capacity into their first level managers recently promoted from individual contributor roles.
If the hidden cost of replacing employees is high, consider the hidden cost of “losing” you, the owner.
Mark Woeppel launched a management consulting firm, Pinnacle Strategies, in 1992. In 2009, his phone stopped ringing and sales plummeted 75 percent. Woeppel had to lay off his half-dozen employees, had exhausted his assets, and even stopped leaving his house. To cope with the stress he started eating too much and gained 50 pounds. Furthermore, he fed an old addiction: playing the guitar while locked in a room for hours.
But, he had a sliver of hope that kept him working to develop new services; he even penned a whitepaper at the nadir of the Recession. Finally in 2010, that whitepaper led Pinnacle to its biggest-ever contract with an aerospace manufacturer. Last year, Pinnacle’s revenue hit $7 million. Its 5,000% improvement landed it No. 57 on the 2013 Inc. 500.
“I used to be like, ‘My work is me,’ ” he says. “Then you fail. And you find out that your kids still love you. Your wife still loves you. Your dog still loves you.”*
While there may be many outward similarities between middle-market firms, they are still largely shaped by the owner-founder. There’s only one of you, so be sure to take care of him!
Toolkit:
If you’re the owner of a middle-market firm like Mark Woeppel, congratulations…and condolences!
Consider what you might do to make sure your Key Employee–you!–stays healthy to keep your firm on track.
**Thomas Stewart, executive director of the National Center for the Middle Market at Ohio State University as quoted in The Denver Post http://www.denverpost.com/business/ci_26462023/middle-market-companies-trying-find-their-voice, by Aldo Svaldi, The Denver Post,Posted: 09/03/2014 05:38:36 PM MDT
