I and most people are guilty of ignoring mid-size or medium-sized businesses. Sure we use the phrase small-to-medium sized businesses, SMBs and, in Europe SMEs. However, the discussion usually revolves around companies that have fewer than 100 employees or greater than 1000 or enterprises. Seldom does anyone specifically write about the “M” in “SMB”. Granted depending upon how the group is segmented, it represents the widest range of companies with the greatest diversity of needs. Using sizing from Gartner and other major analysts medium sized businesses range in employee count from 100 to 999. Using this range and data from the U.S. Small Business Administration, Office of Advocacy, U.S. Census Bureau, and Statistics of U.S. Businesses here are some important facts:
- There are approximately 93,000 medium sized businesses with 480,000 locations. This compares to 5.6 million small businesses with 5.8 million locations. Medium sized businesses have an average of 5.3 locations while understandably small businesses an average of one.
- Medium sized businesses represent on 1.6% of all businesses compared to small businesses representing 98% and enterprises only 0.15% of the total.
- The number of employees is 22,000,000 for average of 236 per business.
- Payroll for medium sized businesses is $1 billion versus $1.4 billion for small businesses. Average annual pay per employee is $45,500 versus $35,000 for small businesses for an increase of 30%. This compares quite favorably with enterprises whose average of $50,000 is just 9% higher.
- Medium sized businesses added more than two million jobs between 2007 and 2010 while employment at enterprises dropped by four million. Moreover, medium sized firms have added another two million since the end of the recession while enterprise and small business employment has dropped.
The metrics for a medium sized business infer a greater diversity and increase in knowledge workers, IT sophistication, networking infrastructure, capital expenditure, operational expenditure and, ultimately, more complex business environment than that of a small business. Therefore, it begs the question of why we continually lump small businesses and medium sized businesses together when discussing target markets. Consequently, I have added a third column to my slide on honing marketing and sales messaging to be presented during Cloud Partners to include medium sized businesses.
If you are in Chicago this week for Cloud Partners, stop by on Thursday at 2:00 to learn the Five Essentials to Selling Hosted Unified Communications presented by ANPI. And if you are selling to medium sized business, know that I will also speak directly to you regarding their requirements and your path to success.