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Mid-Market Outlook: Back from the Cliff – What’s Next?

Mid-market perspectives blog: Growth enterprise services

Posted by Tom McGee on January 16, 2013

Happy New Year! I wish you a year filled with success, prosperity and – something that has been lacking – greater certainty. Only time will tell if the actions by Congress to avert the fiscal cliff are enough to mitigate the uncertainty about the economy, but I think mid-market businesses are poised to move forward.

Most people, including me, usually make some personal resolutions for the New Year. But what about your company? It’s not too late to think about making some New Year’s resolutions for your business as well. In fact, the start of the calendar (and often fiscal) year is a good time to take stock and refresh your thinking, especially since your company’s 2013 plans were probably finalized months ago.

My tax colleagues suggest that businesses might want to consider the potential effects of some of the tax legislation enacted to help avert the fiscal cliff, which extends through 2013 an array of expired and expiring tax provisions, such as the research and experimentation credit, the subpart F active financing exception, and the subpart F lookthrough rule for payments between foreign corporations. The Affordable Care Act's new net investment income tax also took effect on January 1.

There are also market trends that may bear watching, including some of those noted recently by Deloitte’s industry leaders:

  • Consumer Products – Some high-performing brands are altering their mix of marketing spend toward digital technologies, sometimes with the help of data analytics to more successfully (and cost effectively) engage with different consumer groups. Cloud based technologies have the potential to help companies simplify infrastructure and rapidly grow in new markets.
  • Health Care Providers – Feeling the squeeze from regulatory and economic fronts, health care providers are looking to health information technologies to improve operational efficiency and patient care.
  • Private Equity Funds – With assets under management now reaching $3 trillion, more funds are expected to thrive as they focus their investments and capability building in three key areas: adapting to an evolving regulatory landscape, exploring non-traditional growth opportunities, and shifting more of their attention back to operational efficiency.
  • Travel, Hospitality and Leisure – Companies in this sector have expressed cautious optimism for renewed growth domestically, for the power of technology to transform the consumer experience, and for the opportunity to capitalize on emerging market growth.

One of my business resolutions for 2013 is to continue to address the issues and challenges faced by mid-market and privately held companies. To that end, we are planning to launch our third annual survey in the next month or two and will publish the results this spring. If there are specific topics you would like to see addressed, please let me know. Your feedback is welcome and most appreciated.

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