They may be medium in size, but businesses in the mid-market sector certainly contribute a hefty share to the Australian economy. Defined as businesses with an annual turnover of between $10 million to $250 million, the mid-market creates one in every four new jobs and generates more than $450 billion every year. That’s more than a third of all Australian business revenue.
While each business owner has a unique story to tell, one common characteristic stands out: courage.
They have overcome the initial barriers and challenges of starting a business and are now setting out in search of the stability and reputation enjoyed by their larger competitors.
To take this next step, they once again need to be brave; to innovate, to continue to surprise and delight their customers and stand out in an increasingly competitive world.
American Express recently conducted research among mid-market companies to understand whether these observations reflected a broader trend.
It was encouraging to find that seven in 10 Australian mid-market businesses have plans to grow this year – though worryingly, 60 per cent will struggle to access the capital needed to achieve their ambitions.
It’s no secret that without access to finance and healthy cash flow, businesses – regardless of their size – will fail.
Even the greatest brands of our time needed a helping hand in their early days. The founders of Nike actually started out with just $1,000 in their pockets – and if it wasn’t for a last-minute cash flow boost in the 70s that helped meet escalating costs, it’s possible it wouldn’t be the business it is today.
How many iconic brands would be missing from our lives today had they not secured financial support early on? And how many will we miss out on in the future unless these needs are met?
While mid-market businesses may be in a stronger position than their smaller peers, high-growth firms may not have a strong credit history, which can make traditional lenders hesitant to support them.
And with increasing operating costs, fierce competition and economic market volatility both at home and abroad, managing cash flow effectively can be a tricky balancing act.
In the midst of increasing change and global uncertainty, we must all rally together to support the mid-market so that it can fully realise the great promise it holds.
Barry Fletcher is the vice-president of foreign exchange international payments for American Express.