SA Capital Helps Meet the Brokerage Needs of Middle Market Firms

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There are around a million businesses in the U.S. What sets successful companies apart from fledgling ones is challenging to blueprint. It involves business sense, a favorable market, and, sometimes, a little luck.

Regardless of the business’s type or size, vital financial planning is a common characteristic of the most successful U.S. businesses. With the help of a financial consultant or brokerage company, any business will become more efficient and successful.

Lower Middle Market Companies Explained

The majority of businesses in the U.S. are classified as small, with many being family-owned and operated. The companies we will focus on here include corporations that earn over $5 million per year.

According to SA Capital Partners, Middle market companies are divided into three sub-sections:

  1. Upper Middle Market – A small portion of middle-market companies earning between $500 million and $1 billion per year – fall into this category.
  2. Middle Market – Slightly confusing in name, this segment of companies is in the middle of the middle market.
  3. Lower Middle Market – The majority of middle-market businesses – around 90% – fall into this third category.

Lower middle-market businesses, the ones we’re focusing on here, have annual revenue of $5 to $50 million. While this is by no means “small business,” it is significantly smaller than a middle-market company or upper-middle market and has very different needs.

Companies of this size have specific needs, yet large brokerage firms often overlook them because their financial needs are underestimated.

Financial Services for Lower Middle Market Businesses

Identifying a business in its proper category takes into annual account revenue, but it can also consider the number of employees or the employed capital. Generally, the owner knows where the business falls within this scope.

Determining the size of the business correctly assures that the industry will receive the appropriate financial services. Here are a few of the services that are necessary for a lower middle market company:

  • Identifying growth opportunities – Smaller companies incur more risk for their efforts, but they also stand to gain the most growth. Determining which chances are worth the potential reward can require professional advice.
  • Increasing capital – Whether it’s applying for the right loan or seeking out investors, raising money must be done strategically when every dollar counts. Larger companies have a wider margin of error.
  • Selling the business – Knowing how much the company is worth is only one piece of the puzzle. As a lower middle market business, it’s essential to find a buyer that fits the business’s overall values and potential.
  • Buying businesses – Conversely, acquiring a business to complement a lower middle market company must be done strategically so that the merger runs smoothly and continues to be profitable.
  • Consulting – A brokerage firm can provide general consulting skills designed to improve its organization and efficiency, making it easier to define and reach company goals.

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