Mid-market firms are confident about their business prospects in 2023. Business leaders are finding ways to succeed and grow despite economic headwinds and uncertainty. They have learnt to adapt to new challenges, and feel able to negotiate changes in the business landscape, including the arrival of AI and increasing demands of ESG.
“Five years ago, or even further back than that, very inexpensive sources of capital were available. And if firms had problems, they could always refinance. However, over the last several years, executives at mid-market companies have been tested. They've had some tough experiences, but they have also had opportunities to put their talents and ideas into motion, and to get creative.
“So, the answer is no longer just to pull on the big lever of inexpensive capital. Now firms have to actually think through what they can do with what's available to them. Executives in the mid-market have been tested, and they have emerged from this even more capable and accomplished and resilient than ever before.” - Bryan Benoit, Global head of energy and natural resources and Global co-leader valuation services, Grant Thornton US.
Firms have managed to navigate the worst of the economic uncertainty and are now in a position to make the most of emerging opportunities for growth. The leaders of these firms will be looking to understand the areas in which they should be investing in order to maintain trajectory.
In the face of significant challenges the global economy has proved remarkably resilient.[vii] Recent forecasts from the IMF now point to slowing rates of global growth, with advanced economies feeling the effects to a greater extent than their developing economy counterparts. [viii] Mid-market businesses with strong foundations and clear strategies will be well placed to navigate these challenging markets. Companies will need to work harder (and smarter) to compete and achieve future growth, and key to this will be identifying the right investments to make. Mid-market firms report that they’re ready to step up investment in tech and skills to continue to build their brand and grow their business. These investments, along with the tenacity demonstrated by the mid-market, will be key to helping drive economic recovery. Accounting for 90% of all businesses and 50% of employment, small and mid-market firms make up the largest part of the global economy. [ix] The fact that leaders in the mid-market are so optimistic about their prospects is a positive sign not just for them, but also for economic development internationally and bodes well for global growth.
“Businesses should be thinking about how they can strengthen connections with their lenders and make decisions now to make them as attractive as possible to continue accessing the capital they need in the future. They're aware that they've got to keep attacking those markets, because if they retreat, there's only one way to go. They are investing very mindfully, making sure they've got the finance in place to weather any turbulence, but also to continue with necessary essential investment that allows them to come out strong the other end. Depending on the ambition of the firm, this will include investing in international markets, skills development and technology, and making sure that they are positioned to access international growth.” - Schellion Horn, Partner, Economic consulting, Grant Thornton UK.