Women-owned and minority-owned middle market businesses have
outpaced the growth of mid-sized companies as a whole over the past
six years, according to the Middle Market Power Index: The Growing
Economic Clout of Diverse Middle Market Firms from American Express
(NYSE:AXP) and Dun & Bradstreet (NYSE:DNB).
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According to the new analysis, women-owned and minority-owned
businesses are entering the middle market at a much faster rate
than the average commercially-active business. While the number of
all U.S. mid-sized businesses increased by 4.1% from 2008-2014, the
number of women-owned middle market companies grew by 23.6% and the
number of minority-owned middle market companies rose by 22.1%
during that period.
“It is exciting to see that women- and minority-owned businesses
are now responsible for much of the dynamism in middle market
growth,” said Jeff Stibel, Vice Chairman of Dun &
Bradstreet.
Utilizing Dun & Bradstreet’s proprietary databases of
commercially-active U.S. firms, this third in a series of reports
from American Express and Dun & Bradstreet investigates growing
ethnic and gender diversity in the ownership of middle market
enterprises, defined as businesses generating between $10 million
and $1 billion in revenues. This report also looks at how these
firms differ from all middle market companies by size, industry
sector and number of years in business.
Diverse Enterprises Are Driving Revenue and Employment Growth
Within The Middle Market and Among Peers
Among the 136,603 middle market companies in the U.S.,
women-owned companies make up 6% and minority-owned companies make
up 5%. Despite their smaller representation, both groups are
generating an outsized portion of revenue and job growth within the
middle market population.
- While overall middle market revenue
fell 2.2% between 2008 and 2014, revenue rose 22.7% among
women-owned businesses and 19.3% among minority-owned
businesses.
- During that same period, employment in
the middle market grew 4.4%, but surged 37.8% among women-owned
firms and 38.7% among minority-owned firms – nearly nine times the
average rate.
These companies are also driving significant growth among their
peers beyond the middle market sector:
- Middle market women-owned firms
represent just 0.7% of all women-owned enterprises in the U.S., but
employ 23% of the workforce accounted for by all women-owned
companies and contribute nearly one-third (32%) of revenues
accounted for by women-owned companies.
- Similarly, minority-owned middle market
firms represent 1.6% of all minority-owned enterprises in the U.S.,
but employ over one-third (34%) of workers accounted for by all
minority-owned businesses and generate 42% of the revenues
accounted for by minority-owned businesses.
“This report shines a light on the substantial contributions
that diverse middle market businesses have made to the country’s
overall economic health over the past six years,” said Susan
Sobbott, president, Global Corporate Payments, American Express.
“The analysis shows women and minority-owned companies are punching
above their weight and fueling all-around growth in the middle
market.”
Women- and Minority-Owned Middle Market Companies Have Room
to Grow
Most middle market enterprises fall within the lower end of the
revenue size spectrum, with more than half (51%) generating
revenues between $10 million and $19.9 million. Middle market
women-owned and minority-owned companies are smaller than the
average middle market firm in terms of revenue generated and in
number of employees.
- As of 2014, 61% of women-owned middle
market firms generate between $10 million and $19.9 million in
revenues, 32% generate between $20 million and $49.9 million, and
just 6% generate between $50 million and $1 billion. Additionally,
only 7% of women-owned firms employ 500 or more employees –
compared to 15% of middle market companies overall.
- Minority-owned middle market businesses
are only slightly larger than women-owned firms, with, as of 2014,
56% generating between $10 million and $19.9 million in revenues,
33% between $20 million and $49.9 million, and 11% between $50
million and $1 billion. Looking at employment size, just 9% of
minority-owned middle market companies employ 500 or more
workers.
Women- and Minority-Owned Middle Market Companies Span the
Country
While the national average of women-owned middle market
enterprises is 6%, states with the highest percentage of
women-owned middle market enterprises include:
- Alaska (13%)
- Virginia (11%)
- Maryland (9%)
- Michigan (9%)
In addition to these states, higher than average percentages of
women-owned middle market companies exist in the U.S. Virgin
Islands (10%) and Puerto Rico (9%).
Further, states with greater ethnic diversity also enjoy the
highest percentage of minority-owned middle market firms. These
are:
- Hawaii (21%)
- Alaska (19%)
- Virginia (12%)
- New Mexico (11%)
- Maryland (10%)
In addition to these states, Puerto Rico also has higher than
average percentage of minority-owned middle market businesses
(38%).
Study Methodology
The Middle Market Power Index report is based on an analysis of
all of the firms in Dun & Bradstreet’s commercial databases of
nearly 19 million businesses between 2008 and 2014: the first
database, a virtual census of all of the commercially-active
businesses in the United States (defined as firms that have
obtained a D-U-N-S® number and that sell and receive goods and
services and utilize credit transactions in their business); and
the second database, their credit scoring archive database, which
collects and models business commercial activity and business
financial strength. All subsidiary and business establishment data
are combined; only enterprise-level data (top of the business
family tree, or Ultimate D-U-N-S® number firms) are
reported. Additionally, public sector entities are excluded.
About Dun and Bradstreet
Dun & Bradstreet (NYSE: DNB) grows the most valuable
relationships in business. By uncovering truth and meaning from
data, we connect customers with the prospects, suppliers, clients
and partners that matter most, and have since 1841. Nearly ninety
percent of the Fortune 500, and companies of every size around the
world, rely on our data, insights and analytics. For more about Dun
& Bradstreet, visit DNB.com.
About American Express Global Corporate
Payments
Through its Global Corporate Payments division, American Express
offers a suite of B2B and T&E payment solutions that help
organizations streamline processes and transform them into
opportunities for savings, control and efficiency. American Express
can help your organization increase working capital flexibility and
strengthen relationships with suppliers. For more information,
visit us at business.americanexpress.com/us.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more
at americanexpress.com and connect with us
on facebook.com/americanexpress,
foursquare.com/americanexpress, linkedin.com/company/american-express,
twitter.com/americanexpress,
and youtube.com/americanexpress.
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version on businesswire.com: http://www.businesswire.com/news/home/20150922005830/en/
M BoothAlex Della Rocca, 212-539-3203alexd@mbooth.comAmerican
ExpressMelissa Banas, 212-640-8658melissa.j.banas@aexp.comDun &
BradstreetHeather Herndon, 310-919-2290herndonh@dnb.com
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