There are businesses contributing significantly to the UK economy. They are sometimes hard to recognise because they are under-represented. These are mid market businesses. They do not fit the profile for gaining attention as they are bigger than start-ups but smaller than the FTSE big players. However, according to a report by business advisory firm BDO, they account for nearly a third of all private sector turnover, and provide one in four private sector jobs.
Stuck in the Middle
“The UK mid market makes up around a mere one per cent of UK companies, but it’s a significant engine for economic growth”, explains Jonathan Barnes, Relationship Director at Santander. “There is a sense that despite this, middle-sized companies have been overlooked when it comes to getting a helping hand”.
The question becomes one of what can be done to boost the mid market businesses, if its success benefits the wider economy? One answer may lie in geographical detail.
“Revenue growth in the UK mid-market has tended to be concentrated in and around London. It has recently enjoyed a greater spread, but the emphasis is still on services as opposed to manufacturing. A more devolved government economic policy, whereby the regions receive help beyond the start-up phase could help”, explains Jonathan.
“Companies face market challenges, alongside skills and management issues”, Jonathan points out. “Any policies simplifying regulation and offering help with technological development would be of real value”.
This might be about stressing local links and creating local geographical clusters of enterprise and initiative.
“The principle of the Northern Powerhouse is a sound one, but there’s still the question of recognising the small, but significant, mid market sector’s contribution and ensuring that it’s reflected in policy-making”
Jonathan Barnes, Santander
Filling the Finance Gap
Mid-market firms are characterised by a certain agility. It comes from having greater resources than start-ups or smaller businesses, combined with a greater flexibility than is sometimes demonstrated by larger, slower-moving organisations. However, when it comes to financing, many medium-sized enterprises have found the going tough.
“We recognise that there has been a perceived gap in service provision when it comes to traditional forms of loans tailored to mid market businesses”, Jonathan comments. This gap has been partially filled with various forms of alternative funding provision, to the extent that it has infiltrated the mainstream.
“We’re eager to re-focus our energies on the middle”, Jonathan concludes, “and improve access to additional bank funding in order to remove financial constraints in this sector and help re-balance the economy”.
M3 Media Publishing appreciates the contribution, made by Jonathan Barnes, on highlighting issues faced by mid-market businesses. To read his insights in to further mid-market issues, please click on the links below: