Fifth Third Private Bank, a division of Fifth Third Bank announced the release of its collaborative research with the National Center for the Middle Market, housed at The Ohio State University Max M. Fisher College of Business. The research provides insights on the personal dynamics and drivers of middle market business transitions.

Data from the survey reveals that, for business owners, maximizing valuation ranks as the number one issue, with more than three-quarters of them citing it as a major concern. Most also worry about building an effective advisory team (68%), ensuring family legacy (53%) and maintaining the culture of the organization they worked hard to build (52%). Additional perspectives and insights from the report are available here.

NCMM surveyed 300 middle market executives including 75 owners of privately held middle market businesses who benefited from the sale of all or part of their companies in the past 24 months. Among other outcomes, research found that, due to delays caused by the pandemic, many owners who sold in 2020 and 2021 had more preparation time than they originally scheduled. Putting that extra time to good use likely contributed to greater feelings of preparedness overall. However, feeling well prepared for a major transition does not completely mitigate apprehension.

“Navigating a business transition or liquidity event is complex, both financially and emotionally,” said Chad Slaughter, managing director, national private bank, Fifth Third Bank. “Whether they wish to sell the business or pass it down to family, Fifth Third employs a customized approach to work alongside owners and their outside advisors to optimize both personal and business outcomes.”

Created in 2021, Fifth Third’s Business Transition Advisory Team is a Private Bank team dedicated solely to preparing business owners financially and personally for their business transition. BTAT advisors work with the Private Bank, Commercial Bank and Fifth Third’s other lines of business to meet clients’ needs.

“This research offers insight that gives us an elevated ability to serve as a trusted advisor,” said Frieda Rakhman, managing director, strategic client development of Fifth Third’s BTAT. “We find that owners who surround themselves with expert advisors are much more prepared and confident for their future.

“Given the importance and complexity of personal preparation for a business transition, excluding wealth advisors is often a particularly costly oversight.”

According to the NCMM, the U.S. middle market comprises 200,000 companies with annual revenues of between $10 million and $1 billion. Together, they account for 44.5 million jobs, or one third of total private U.S. employment, generating more than $10 trillion in combined revenues annually.

“The collaboration between Fifth Third Private Bank and the National Center for the Middle Market to produce these insights on business owner transitions is important for a number of reasons,” said Doug Farren, NCMM’s managing director. “A majority of middle market companies are privately held, including a significant portion of family-owned businesses, so they are likely to be facing these issues now or will in the future.”

The National Center for the Middle Market is a collaboration between The Ohio State University Max M. 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. 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.