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Middle market companies are the engines of economic development and job creation. Despite that, owners of mid sized businesses find themselves financially constrained and outclassed by bigger competitors with high brand recognition. But there’s still hope. With plenty of ways to grow and thrive in 2025, mid sized companies can take on the reins, step up their business game, and compete with the likes of larger corporations.
The Middle Market Landscape In the US
The National Center for the Middle Market (NCMS) said the United States has approximately 200,000 mid sized companies, with almost 50 million employees working in these businesses and comprising one-third of the gross domestic product (GDP) of the private sector. Mid market companies also earn around $10 million USD to $1 billion USD.
Interestingly, during the Great Recession, mid size companies stepped up and provided more than two million new job opportunities to professionals. This pales in comparison with the slashing of 3.7 million jobs in bigger companies. While mid size businesses are found in various industries, including retail and construction, they are mostly prevalent in health, education, and other service industries.
However, mid market companies are niche and not known by most customers, who are likely familiar with smaller businesses or popular big-name brands. Despite standing the test of time and driving employment and economic growth, mid market companies deserve more recognition from the general public.
Why Do Midsize Companies Fail?
A business is an investment as it is a risk. Mid size companies have a 31-year average lifespan, making them resilient and well-established businesses.
Unfortunately, companies may close down due to unforeseen circumstances, but in some cases, bankruptcy is caused by mistakes business owners themselves make. Here are four reasons why mid sized companies close up shop.
1. Poorly Developed Business Plan
Starting a business is a leap of faith. But without a business plan, entrepreneurs risk shooting themselves in the foot. According to WinSavvy, most businesses (78%) with no or poor business plans ended in bankruptcy.
Developing a sound business plan gives owners of midsize companies a blueprint for success. It highlights goals, discusses products and services, and includes a market analysis and realistic strategies on attracting and retaining customers.
Business plans are not static, though. They evolve as market needs and trends change, so keeping business plans updated is key to staying ahead of your competitors and maintaining relevance.
2. Lack of Knowledge
In business, knowledge is power. Needless to say, the lack of financial and market knowledge is a recipe for disaster. Hence, an owner of a mid sized business must thoroughly research their industry and customer base and make informed decisions to have their shot at success, especially if they’re breaking into a highly competitive market.
3. Bad Hiring Practices
Hiring a family member or friend is not always a good idea, and there’s nothing personal with that. Mid sized companies deserve highly qualified employees with the experience, credentials, and skills that propel your business to success.
4. Refusal to Delegate Tasks
Owning a mid sized business doesn’t mean taking care of everything alone. As you grow and scale your business, delegation becomes a necessity. By delegating tasks to your in-house, or even better, outsourced employees, you can free up your workload and focus on critical business functions.
5 Ways How Mid-Sized Companies Are Competing With Larger Brands
From agility to outsourcing, this section explores how mid-sized companies are competing with big companies.
1. Midsize Companies Prioritize Agility
Business agility is how mid-sized companies are competing with larger competitors. Agility is defined as a company’s ability to adapt and remain flexible and resilient amid the ever-evolving complexities in the market. Being agile also means innovating and thinking outside the box.
In the case of Crumbl Cookies, established by Sawyer Hemsley and Jason McGowan in Utah, the company owes its agility to its weekly rotating cookie menu. With the menu catching the eyes and taste buds of social media users, the cookie brand has become a widely recognized and successful company, with franchises in Canada and across the United States.
The success story of Crumbl Cookies shows that agility and innovative business approaches contribute to success and brand recognition.
When middle market companies engage in strategic agility, they can identify emerging trends and detect changes in customer needs, allowing them to quickly innovate their processes or products and shift their business strategies to reflect the new market reality. Not only does agility aid in growth, it also evens out the competition between a mid size company and its larger competitors.
2. Middle Market Companies Utilize Data
Data is everywhere. With advanced technologies simplifying data gathering and analysis, middle market companies approach business growth with data-drivenness in mind. Sweetgreen, Inc. — an American company with a 2024 revenue of $676.8 million USD — boosted customer engagement through a personalized loyalty program as well as cut down on food wastage by anticipating ingredient demand with the help of data and data analytics.
Thanks to data, any mid size organization like Sweegreen, Inc. can make smarter business decisions, minimize financial risks, and anticipate demand. What’s great about fostering a data-driven company culture is that it aids in agility and personalization, enabling middle market businesses to respond faster to trends and enhance the customer experience and loyalty.
The best part? All the improvements and efficiency that come with data contribute to boosted revenue and better returns on investment (ROI).
3. They Invest In AI
Integrating advanced technologies like AI is also how mid-sized companies are competing with large enterprises. Visionary Vogues, citing Deloitte, found that AI integration is employed in more than one functional business area of nearly half (47%) of American middle market businesses.
AI technologies are not just marketing buzzwords; they are the present and future of business environments. While middle market businesses typically have fewer resources, this should not be a roadblock to achieving growth. Because the truth is, AI can do wonders for your business, especially in terms of analysis and efficiency.
Aside from automating manual and tedious tasks, AI can analyze large volumes of customer and sales data. From that pool of data, it identifies trends, uncovers customer preferences, anticipates market shifts, and provides data-driven, actionable insights.
These insights guide mid size businesses in tailoring their future campaigns, expanding their customer base and market reach, and personalizing the customer experience. Fortunately, with the growing accessibility of AI-as-a-service tools like Google Vertex AI, mid sized businesses can augment their AI endeavors without pooling their resources on employing local AI experts and data science professionals.
4. Companies Continuously Evolve
Middle market companies benefit from a growth mindset. Because stagnancy is a no-no in the business world, change could mean tapping into another business model to accommodate changes in market and customer needs, creating new products or services, or trying out-of-the-box ways to market your offerings, as in the case of Crumbl Cookies.
Likewise, business leaders and workplace culture need to evolve with the times. For example, when integrating AI, executives and employees must embrace the technology with open arms, which entails experimentation, talent upskilling, or outsourcing for effective data consolidation and ethical AI use.
While mid size companies have the advantage of leveraging new trends faster than large companies, entrepreneurs must practice effective strategic thinking when making a new business move.
5. Mid Sized Business Owners Outsource Their Jobs
You might think outsourcing is only reserved for larger corporations like Google. But on the contrary, even a mid size organization can take advantage of outsourcing. Like any growing business, middle market companies grapple with budget constraints and operational inefficiency. Couple that with the rise of entrepreneurship and soaring labor costs in the US, and it’s clear why companies struggle with hiring qualified talent.
Outsourcing can take care of these woes, providing a mid size company with a talented workforce and world-class services that don’t break the bank. However, business owners must remember that this practice is more than incurring cost savings; it is a strategic investment that, when executed well, can be a significant driver of growth and innovation.
How Outsourcing Can Help Mid Market Companies Compete With Industry Giants
Outsourcing opens doors for new opportunities. It helps companies, especially smaller businesses, stay flexible and resilient as they navigate shifting business environments.
Outsourcing providers cater to larger companies and SMEs, but the best BPO companies tailor their solutions according to business size. Below are the perks of outsourcing in helping mid sized companies compete with enterprises.
1. Outsourcing Can Expand Your Talent Pool
From finance to the data science industry, the hiring landscape is competitive. Not to mention the cost of hiring in the US averages $4,683 USD, with the cost-per-hire for executives skyrocketing to a staggering $28,329 USD. For middle market companies with limited finances, the combination of stiff competition and high labor costs is a double whammy.
This is where outsourcing becomes a vital strategy. By outsourcing jobs and departments, owners of mid sized companies can explore a richer talent pool and hire experts at a fraction of local labor costs. Because outsourcing providers have readily available specialists, businesses can cut down on the cost and time of training new hires.
This doesn’t mean letting go of your in-house team. With the norm of hybrid teams, your local staff does whatever they do best, while your outsourced staff handles specialized or less time-intensive job functions. Outsourcing is all about collaboration, utilizing the best practices of outsourced teams while covering each other’s weaknesses.
2. Scalability is Easier
Scalability is growth. It's how mid-sized companies are competing with big brand businesses despite the former’s lack of resources. BPO companies offer cost-effective, scalable solutions for your needs. For example, if your company faces a swamp of customer inquiries after a product launch, you can ramp up your local customer support team by outsourcing customer service.
This way, your in-house agents have an extra pair of hands, speeding up the closing of tickets without sacrificing customer relationships and experiences. Conversely, you can downsize your outsourced team in case of fluctuating demand. Thanks to outsourcing, mid market companies no longer endure high turnover costs and long hiring cycles.
3. Outsourcing Can Pave the Way for New Technologies
Nowadays, innovation manifests in the form of advanced technologies. Despite the accessibility of new tech like AI-as-a-service, business owners who want to innovate and gain a competitive edge faster can seek the assistance of an outsourcing provider to augment their tech efforts.
Not only do BPOs have the tools of the trade — including AI, automation, and analytics software — they also have employees who are already proficient in the technology you use (or about to use). This leads to a faster adoption of new technologies, further enhancing operational efficiency and minimizing time and resources on in-house training programs.
4. Outsourcing Partners Provide Quality Services
Outsourcing doesn’t equate to cheap labor and low-quality services. BPOs put quality and customer satisfaction at the forefront. BPO companies also employ high-performing candidates and assign a project manager to ensure all deliverables meet their clients’ quality standards.
While outsourced teams are more cost-effective, they provide enterprise-level capabilities that rival in-house teams. Business owners seeking world-class outsourcing services must work with a reliable service provider to avoid backlogs, production delays, and poor ROI.
Grow Your Mid-Sized Company With KDCI Outsourcing
Like most businesses, middle market companies refuse to stagnate and get left behind in the dust. After all, they have more options on their plate, ranging from AI integration to data analytics. If financial constraints and the exorbitant cost of labor are hindering your company’s growth, we recommend partnering with KDCI Outsourcing.
KDCI Outsourcing is a premier Filipino BPO company established in 2011. Since our inception, we have helped plenty of large enterprises and SMEs achieve growth, innovation, operational efficiency, and cost-effectiveness through tailored offshoring solutions. Furthermore, our rigorous hiring practices and meticulous vetting of candidates ensure you get to work with top talent.
Whether you need outsourced web design, finance and accounting, or admin support services, KDCI Outsourcing has got your business needs covered. Build your offshore team with KDCI Outsourcing today. Contact us now for a price quote or proposal!
