Stoke the Fire: 3 Ways to Fuel Your Middle Market Potential

Posted on: August 30th, 2016

Many middle market companies reach a point where further growth becomes difficult as most of them have trouble realizing their potential. Generating new revenue doesn’t come easily and this might be due to lack of growth capital or lack of focus on new customer acquisition.

Middle market companies have the advantage of being smaller and more nimble than large companies.

Here are 3 ways middle market companies can fuel their growth.

1. Become Consistent

Consistency, in all of its forms, is a crucial factor to success in a business. Customers need consistent customer service, employees need consistent leadership and teams need consistent goals.

McDonald’s is a great example of a company that has delivered consistency as to product and service across its +1 billion of products served.

Build a model that delivers consistency and then replicate the model to scale and bring on more volume.

2. Improve Your Sales Management

The sales team is the heart of any company; they are the ones who drive new customer acquisition and can provide valuable market feedback for new product innovation.

If the sales team becomes complacent, revenue growth will flatten out. Inspired sales management and developing new ways of engaging with your salesforce is critical to ensure high levels of productivity.

3. Mergers and Acquisitions

Middle market companies should focus on acquiring funds for mergers and acquisitions. This is because the development of new business through mergers and acquisitions fuels growth and adds value to the company; it’s not only about revenue growth.

It increases the cost efficiency and the share price of the company after the merger. Mergers and acquisitions accelerate regional growth of companies and often is a safer way to enter a new market.

In the acquisition financing arena, capital availability is destiny as companies require reliable access to capital to grow over the long term. Unforeseen capital needs usually arise when acquirers least expect it. This can cause some concern for the acquisition financing provider, especially when covenants tighten up and that working capital availability is utilized faster than expected.

Mezzanine debt borrowing is usually a straightforward activity that many companies use for funding of transitional growth. Mezzanine debt lenders are highly transparent about their due diligence approach and their post-closing loan management making it easy for companies to engage with.

Elections have consequences and positive ones at that for the acquisition financing middle market. While much media attention is paid to the direction of the yield curve and the Fed’s likely rate cuts, scant attention is paid to the more important drivers of the acquisition financing market – business psychology and regulatory climate.