New report provides fresh look into the middle market’s Black-owned businesses

Founders report a mix of opportunities and challenges associated with growing their businesses

COLUMBUS, OHIO — The U.S. middle market is a historically overlooked, yet incredibly powerful segment of the economy. While the National Center for the Middle Market (NCMM) has made great strides over the past decade in shedding light on the middle market’s importance and outsized contributions, segments of the middle market remain far less understood.

A new report, released today by the NCMM in collaboration with Wells Fargo Commercial Bank, offers insights into one such segment ― Black-owned middle market businesses. The report, “2024 Insights and Perspectives from Black Leaders in the Middle Market,” suggests that these businesses utilize distinct strategies for growth, but face challenges as Minority Business Enterprises (MBEs).

”We are excited by the opportunity to work with the Wells Fargo Diverse Segments team to focus on Black-owned businesses in the middle market,” said Doug Farren, managing director of the NCMM. “The small business story is well-known and has been told, but building a business to scale comes with its own set of challenges ― and we wanted to explore that.”

Researchers conducted interviews with 13 Black middle market business owners and leaders responsible for strategic decision-making in organizations spanning different industries including construction, logistics, financial services and information technology. The leaders represented companies with annual revenues ranging from $20 million to $500 million.

Key findings of the report include:

• A shared sentiment among many of those interviewed that diversity initiatives and programs are shifting away from Black-owned businesses.
• Most participants believed that an MBE designation means less today than it once did; or that the opportunities such certifications have become watered down or less available to Black-owned companies.
• A view that programs that contribute to the initial success of Black-owned businesses often end up limiting future growth.
• Many of the Black business leaders interviewed expressed frustration at what they view as broken government contracting and certification processes, with some even contending that the programs put in place to help Black entrepreneurs are ultimately hurting them instead.

“One interesting point that came out of this report ― and what I have been researching ― are the organizational barriers that minority businesses, particularly Black-owned businesses, face,” said James Hill, chair of the Department of Operations and Business Analytics at The Ohio State University Max M. Fisher College of Business. “Black-owned businesses often must go through supplier diversity programs and certifications, where their majority-owned counterparts can go straight to procurement. These additional steps are structural barriers they must overcome.”

The survey also revealed shared experiences and strategies that participants said have helped Black businesses succeed. Among them:

• Discrimination is a universal experience not likely to go away anytime soon, but it does not define Black business owners or their paths forward.
• Establishing and maintaining a network of peers and an economy in which Black business leaders are valued can help generate opportunity and overcome challenges.

“This is the beginning of a journey. A journey to uncover the overlooked ― owners of Black middle market companies,” said Moses Harris, Black/African American Segment leader for Wells Fargo Commercial Banking. “We’re doing this to elevate their stories, to expand their access to capital and customers, and to support their overdue, equitable participation in the global economy. Stories, coupled with data, have the power to change systems, unlock product innovation, and design better policy benefitting generations to come.”

The report can be found here.

About the National Center for the Middle Market (NCMM)

The National Center for the Middle Market is a collaboration between The Ohio State University Fisher College of Business, Chubb and Visa. It exists for a single purpose: to ensure that the vitality and robustness of middle market companies are fully realized as fundamental to our nation’s economic outlook and prosperity. The center is the leading source of knowledge, leadership and innovative research on the middle market economy, providing critical data analysis and insights for companies, policymakers and other key stakeholders. The NCMM is fully committed to funding and distributing the most credible open-sourced research, dynamically creating new knowledge, providing programs that drive value for middle market companies and offering a well-informed outlook on the health and future of the middle market via the Middle Market Indicator.

About The Ohio State University Max M. Fisher College of Business

The Ohio State University Max M. Fisher College of Business provides tomorrow’s business leaders with the foundation needed to succeed in business today. Fisher students experience an academically rigorous learning environment, led by world-class faculty, which fosters their development as principled leaders who possess an entrepreneurial spirit, global awareness and a commitment to social responsibility. Organizations from around the globe thrive under the leadership of Fisher alumni, who positively impact their communities and the world.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth &Investment Management. Wells Fargo ranked No. 47 on Fortune’s 2023 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.