One organization aims to change that. Midmarketplace.com., a web-based service launched last week by the Chicago-based Alliance for Corporate Wealth, will provide such resources to companies that are "in between Wall Street and Main Street," according to founder Michael Nall. That is, they are not a mom-and-pop dry cleaner, but they are not a big company looking for an initial public offering, either.

Whereas there are several organizations dedicated to small business and a number of resources to help large corporations make decisions, the nation's 300,000 privately held midsize businesses have had little guidance when it comes to estate planning and wealth management, Mr Nall said.

 He is launching the effort in conjunction with the Chicago-based Alliance of Merger and Acquisition Advisors - of which he also is founder - and has gathered a group of more than 50 independent financial advisers to address the business and personal challenges for owners of privately held midsize companies.

Different structure

The structure is different for the segment the alliance is targeting, Mr. Nall said. Typically, if an entrepreneur has an idea and follows through with it, and it is successful, they will execute an initial public offering. But for private companies that have no desire to do so, there is no direction. The Alliance for Corporate Wealth defines a midsize business as having a market capitalization of $5 million to $150 million.

"Most owners aren't ready for a buy-or-sell transaction at this stage," when the business becomes successful," said Mr. Nall.

"A lot of the business owners at the midlevel stage are self-made millionaires that had no example to follow when they were growing the business," said Teresa Cherry, one of Midmarketplace.com's network of advisers. An adviser and certified public accountant with Wealthdesign Network/Cherry Associates in Chicago, she is a member of the Alliance of Merger and Acquisition Advisors and decided also to join the Alliance for Corporate Wealth.

The groups have three events planned in the next six months at various locations, featuring seminars on various topics. One will be held this Wednesday in Plano, Texas, on exiting a business when succession planning isn't an option. Over the subsequent two days, the Alliance of Merger and Acquisition Advisors will hold its winter membership conference in Newport Beach, Calif., with a focus on middle-market businesses - as a way of calling attention to the launch of Midmarketplace.com and the Alliance for Corporate Wealth.

Mr. Nall said 150 are expected to attend the conference.

Gary Roelke, managing partner with Corporate Finance Associates in Upper Montclair, N.J., and a member of both alliances, said that owners of businesses in this "highly fragmented" sector aren't used to paying for professional services, because they haven't realized the value of the advice. The Alliance for Corporate Wealth's member advisers are compensated individually, on a fee-by-fee basis. There are 375 members of AMAA and 45 members of the new Alliance for Corporate Wealth. Annual dues for both organizations are $495.

"When a [business owner] is told it's time to sell or to merge with a larger organization, only one out of 100 people are ready to use services at my level. The other 99 are too early in their life cycle" Mr. Roelke said. With 300,000 such businesses in the United States, that would indicate that at least 30,000 entrepreneurs are ready for Midmarketplace.com's services.

Mr. Nall said market conditions for midsize businesses appear to be favorable for 2006, and a recent survey of owners' sentiments backs that up. The study of 12,000 owners and operators of small or midsize businesses and operators, conducted by Bainbridge Island, Wash.-based sales tax software vendor Avalara Inc., indicates that respondents expected to have a "banner year" in 2006 after a solid performance in 2005.

The survey found that most of the respondents anticipated an even better year in 2006. Of those responding to the web-based survey, 74% expected the U.S. economy to be better this year than in 2005. Respondents were even more bullish about their businesses' performance: About 84% said they fared better in 2005 than in 2004, and an equal percentage expected to do even better in 2006.

By Carlise Peterson

InvestmentNews.com

January 16, 2006