BDO report on fast growing mid-market businesses
The BDO Growth Index is a report that focusses exclusively on the mid-market. We aim to identify the top 10 fastest growing organisations over the last 3 years across Australia. More importantly through discussion, we attempt to understand the factors driving growth and limiting accelerated development for these organisations.
Defining the mid-market is difficult, as there are many stakeholders with differing views. Some define the market by revenue, others by the number of employees and others by the size of its debt. In Australia, there are approximately 2.2 million registered business across a broad range of sectors and scale.1
The Australian Taxation Office (ATO) confirms there are approximately 18,000 business across Australia with annual revenues between $10 million and $250 million.2
The Australian Bureau of Statistics (ABS) defines the mid-market as businesses employing between 20 and 200 employees, however no parameters for annual revenues are included in their definitions. In terms of this definition, there are 51,025 mid-market businesses across Australia.
For our purposes, we keep the definition as simple as possible and consider organisations with annual revenues between $10 million and $500 million as the heart of the mid-sized business market in Australia. We estimate this comprises approximately 2% of registered business. The mid-market employs approximately 20% of the Australian workforce, contributes nearly one-fifth (18%) of net tax to the Australian economy (almost $13 billion) and produces just under one-quarter of Australia’s revenue ($645 billion).3
Key findings of the 2018 BDO Growth Index report
Of the top 10 fastest growing organisations identified in the mid-market there are a few interesting insights to be noted, listed here, but explored in greater detail in the body of the report:
- They are mature – the youngest business in the top 10 is 10 years old, and the oldest 187 years old
- No one industry dominates the top 10 table – growth is being achieved in many sectors
- Acquisitions are a major driver of growth – more importantly however, the integration of these acquisitions dominates the growth achievement of the top 10
- Innovation is very high on the agenda – this is not necessarily invention, but about doing things differently, finding connections between business units and looking for innovative ways to distinguish themselves within the competitive landscape
- They are investing in people – Employees are not just being engaged in the process but directly incentivised, at all levels, to achieve strong returns on assets
- Developing the culture of the business is inherently part of the growth mind-set being achieved
- Many of the top performing organisations are global in nature. Global operations drive risk down and allow for expansive market opportunities to be explored.
We trust you find the results interesting and welcome your comments, debate and new ideas to continue the discussion of this valuable market to the Australian economy.
Download the report