Rapidly growing, diverse-owned middle market businesses represent a valuable, long-term opportunity and a powerful way to boost national economic prosperity.
Rapidly growing, diverse-owned middle market businesses represent a valuable, long-term opportunity and a powerful way to boost national economic prosperity. 

This post highlights independent research conducted and published by JPMorgan Chase and Next Street. The National Center for the Middle Market contributed data and perspective to the research process. 

Terry Hill and Charisse Conanan Johnson 

Midsize businesses are critical drivers of our economy. They create jobs, build products and enable solutions that power our day-to-day lives. While midsize businesses generate significant revenue nationally and locally, there is an opportunity to better support them as they face headwinds like increasing competition, slowing revenue growth and an uncertain economic outlook.

To date, there has been limited research on the unique challenges diverse-owned midsize businesses face. That’s why JPMorgan Chase Commercial Banking and Next Street recently collaborated on a new report to uncover the challenges experienced by this often overlooked subsector. With valuable contributions from other industry experts like the National Center for the Middle Market, The Middle Matters: Exploring the Diverse Middle Market Business Landscape, provides key insights that quantify the incredible growth potential within the diverse-owned subsector of midsize businesses. Throughout the report, we define diverse as Black-, Hispanic-, Latino(a)-, Asian-, and other people of color-owned businesses, women-owned businesses, and veteran-owned businesses. 

Here's a quick look at what we learned:

  • A $1.3T annual revenue opportunity exists for diverse-owned middle market businesses. The research shows that diverse-owned businesses represent approximately 30% of midsize businesses but only account for about 20% of the total revenue. Closing this gap presents a meaningful opportunity to support national economic health and prosperity.


  • Diverse-owned businesses are growing at a faster rate than their non-diverse counterparts. Compared to the non-diverse-owned businesses in our research, which experienced 19% year-over-year growth for their last fiscal year, the diverse-owned businesses grew 32% during the same period. Diverse-owned businesses are on average 10 years younger than their counterparts, which makes them much more likely to be an early (generating revenues between $11mm and $20mm) or emerging (generating revenues between $21mm and $100mm) middle market business, where rapid growth is more common. Further, diverse-owned companies tend to be concentrated in areas that are growing quickly including wholesale and manufacturing. Better supporting diverse-owned businesses presents an important economic opportunity for the business community given their rapid growth rate.


  • Diverse-owned businesses are capital- and guidance-hungry. The majority of the diverse-owned businesses in the report fall into the early and emerging phases of middle market company growth. Businesses in these stages account for three out of four dollars in projected capital demand. The research also points to a need for a range of trusted partners and targeted advisory services to guide the continued growth trajectory of these businesses, including succession planning, organizational development, talent development, legal and accounting services, marketing services, and more.


  • Accessing needed capital and financing is disproportionally challenging for diverse-owned midsize businesses. Despite the obvious need and opportunity, it’s not always easy for diverse-owned businesses to access support and resources. Among the businesses surveyed, 16% of diverse-owned businesses could not access needed financing compared to just 6% of their non-diverse-owned counterparts. Helping diverse-owned businesses overcome key barriers, like high credit costs, difficulty navigating the application process, and lack of confidence in credit applications, will benefit the economy at large.


  • Better serving diverse-owned businesses promises significant value creation for all. The research serves as a call to action for middle market stakeholders to accelerate their efforts to understand the needs of the middle market and the dynamic businesses within it. With a data-informed approach, the business community now has a clearer picture of the valuable opportunities that exist and how better understanding diverse-owned businesses can contribute to the overall health of the U.S. economy. 


Click here to read The Middle Matters: Exploring the Diverse Middle Market Business Landscape. For a deeper dive, listen to our conversation with National Center for the Middle Market Managing Director, Doug Farren, on The Market that Moves America podcast on March 26.

 Terry Hill is the co-head of emerging middle market and veterans initiatives for JPMorgan Chase Commercial Banking.





Charisse Conanan Johnson is co-CEO and Board Member of Next Street, a mission-driven, employee-owned, B Corp firm that designs and develops solutions to connect entrepreneurs, especially those from underrepresented communities with the right resources to reach their potential. Connect with Charisse via email or LinkedIn.