With 2020 already one month behind us, the middle market sits at an interesting crossroads regarding its immediate future. Citing a recent LBMC Middle Market Business Executive Survey, Nashville Business Journal (NBJ) points to an uncertain future for middle market business in 2020 and beyond, referencing an “upcoming slow down” among other broad market predictions.
That said, the survey, which was comprised of input from 750 polled middle market executives, also projected periods of growth in this same timeframe. NBJ points to numerous focal points middle market companies should embrace to capitalize on this growth and enhance their respective operations. Here are a few ways to approach several of these considerations, adopting new trends and ideological shifts while fine-tuning your company for a potentially nebulous future.
Improving financial performance via efficiency
Your company’s financial performance is likely at the center of many crucial 2020 goals, making this area an already relevant and inevitable facet of overall growth. Specifically, however, NBJ cites “improving margins and increasing revenue through productivity/efficiency” as primary focal points within financial improvement; this reflected nearly 50 percent of polled leaders.
To dissect the latter point further, many leaders are shifting focus from broad technology spends to investments in the fine-tuning of existing systems, with 27 percent of companies outsourcing technology support and services to supplement internal operations. That said, it is important to remember that the majority of technology spends in 2020 will also continue to emphasize business intelligence, analytics, and cloud strategy.”
Therefore, effective middle market strategy in the new year will hinge on a three-way balance of re-allocated spending, revisited existing infrastructure, and constant consideration for evolving data-driven solutions; this promotes both financial stability and continued efficiency amidst an ever-changing technological backdrop.
Increasing business value
Business value goes hand-in-hand with growth, as your business’s present viability serves as the best indicator of its potential future performance. The best leaders understand that, to enhance company value and keep themselves poised for success, they must always focus on how to capitalize on what is on the horizon, and, given the aforementioned uncertainty of this horizon in the middle market, value-based goal setting has become not only a moving target, but an partially veiled one.