Closing the Revenue Gap for U.S. Diverse-owned Midsize Businesses Presents a $1.3T Opportunity, according to Research from JPMorgan Chase and Next Street
28 November 2023 - 12:00PM
Business Wire
New study explores the opportunities and
challenges faced by diverse-owned businesses across the middle
market
Today, JPMorgan Chase and Next Street released The Middle
Matters: Exploring the Diverse Middle Market Business Landscape, a
new report that provides insights into the midsize businesses that
power our economy.
Conducted and analyzed by Next Street, the research reveals that
while midsize businesses generate significant revenue nationally
and locally, there is an opportunity to better support them as they
face headwinds such as increasing competition, slowing revenue
growth and an uncertain economic outlook.
The report details the U.S. midsize business:
- Market: There are approximately 300,000 midsize
businesses across the U.S. that generate $13 trillion in
annual revenue and employ more than 40 million
people.
- Importance: These businesses account for 33% of
annual revenue generated and 30% of all private sector
employment in the country, despite representing only 5% of the
total number of national employer businesses.
- Discrepancy: Diverse-owned businesses represent roughly 30%
of the middle market, but generate only about 20% of the
total market revenue.
- Opportunity: Closing this gap could generate an additional
$1.3 trillion in annual revenue, presenting a meaningful
opportunity to support national economic health and
prosperity.
“Midsize businesses are critical to the health of our economy
and communities,” said Terry Hill, Co-Head of Emerging Middle
Market, JPMorgan Chase Commercial Banking. “They create
millions of jobs, as well as the products and services that power
our day-to-day lives. By providing tailored solutions that meet
their unique needs, we can help companies build lasting legacies
that uplift communities for generations.”
The Diverse Landscape
To date, there has been limited investment in research that
highlights diverse-, women-, and veteran-owned midsize businesses.
Understanding the needs of midsize businesses that make up the
middle market offers a significant opportunity to empower
underserved business owners and bolster the economy.
Diverse-owned midsize businesses are, on average, 10 years
younger and employ fewer employees than non-diverse-owned
businesses. According to the businesses surveyed, diverse-owned
companies are growing at a faster rate (32%) than their non-diverse
counterparts (19%). That said, the report finds that diverse-owned
midsize businesses face roadblocks to growth.
Key challenges include:
- Accessing capital and advisory services
- Acquiring growth financing and improving capital structure
- Creating and implementing strategic business and innovation
plans
In addition to exploring the current state of the middle market,
the report describes opportunities for broader access to financial
resources and overall support for midsize businesses.
“There is growing support in the business community for a
greater understanding of the middle market overall, and the dynamic
businesses within it,” said Charisse Conanan Johnson, Co-CEO of
Next Street. “We hope this new report serves as a call to
action for middle market stakeholders to accelerate additional
research efforts and solutions to serve the needs of diverse-owned
midsize businesses.”
The full report can be found here, and infographics with key
findings from the report can be found here.
Report Methodology
The report, The Middle Matters: Exploring the Diverse Middle
Market Business Landscape, is a new study based on research
conducted and analyzed by Next Street. The study included primary
and secondary data sources, surveys, interviews and focus groups.
For this research, the middle market is defined as those businesses
generating between $11 million and $500 million in annual revenue.
Most midsize businesses fell into the $11mm to 100mm range of
annual revenue. Next Street’s analysis primarily focused on the
middle markets in Chicago, Dallas and Los Angeles—which, when
combined, represent 12% of the overall U.S. middle market.
For the purposes of this report, “diverse-owned” includes
Black-, Latino(a)-, Asian-, and other people of color-owned
businesses, women-owned businesses, and veteran-owned
businesses.
About JPMorgan Chase Commercial Banking
JPMorgan Chase Commercial Banking is a business of JPMorgan
Chase & Co. (NYSE: JPM), a leading global financial services
firm with assets of $3.9 trillion and operations worldwide. Through
its Middle Market Banking & Specialized Industries, Corporate
Client Banking & Specialized Industries and Commercial Real
Estate businesses, Commercial Banking serves emerging startups to
midsize businesses and large corporations as well as government
entities, not-for-profit organizations, and commercial real estate
investors, developers and owners. Clients are supported through
every stage of growth with specialized industry expertise and
tailored financial solutions including credit and financing,
treasury and payment services, international banking and more.
Information about JPMorgan Chase Commercial Banking is available at
www.jpmorgan.com/commercial-banking.
About Next Street
Next Street designs and develops solutions to connect
entrepreneurs and small business owners with the right resources at
the right time, with a focus on small businesses facing
disproportionate barriers. With a proven track record of nearly 20
years, an ongoing commitment to becoming an anti-racist
organization, and an extensive network of small business advocates,
operators and investors, Next Street accelerates the impact of
institutions and advisors on small businesses and provides millions
of businesses with the experts, tools and capital they need to
thrive. Learn more at nextstreet.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20231128621204/en/
JPMorgan Chase: Alexis Copson alexis.a.copson@jpmorgan.com
Next Street: Fuaud Yasin fyasin@nextstreet.com
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