Microenterprises in Mexico are usually made up of 10 employees and their turnover should not exceed 4 million pesos. They represent 95% of all companies in the country. If you want to know more about them, then continue reading.
Micro-enterprises are important for the country because, according to the Ministry of Economy, they represent 95% of all companies, 40% of jobs in the country and the production of 15% of the gross domestic product (GDP), value that indicates the total of final goods and services produced in the country.
However, despite its great impact on society, little is said about its characteristics, its advantages, obstacles and the type of professions that are integrated into this vast category. That is why I invite you to continue reading in case you think about starting your own micro-business.
What is a microenterprise?
To determine microenterprises in Mexico, both monthly and annual income must be analyzed, thus helping to differentiate them from a . In addition to taking into consideration various criteria.
The first of them indicates that they must have a maximum of 10 employees and, on the other hand, their annual turnover must not exceed 4 million pesos. However, you will discover all the characteristics behind a microenterprise a little later.
What I can tell you is that they are commonly made up of families, and it is also common for the administration of the same to be carried out by the owner himself.
I invite you to read our article on Mexico. It will be of great help to you when you want to start this incredible adventure!
Characteristics of a microenterprise
So far you know that a micro-business is usually family-owned, is made up of 10 or fewer people and has an annual turnover of less than 4 million pesos, but there are many more key characteristics behind this type of organization. Do you mind if I introduce them one by one below? Let’s go!
They have two hierarchical levels.
Which are divided between the owner, or boss, and the rest of the collaborators. Although of course, there are exceptions.
They lack structure in chain production
However, they manage to use the structure when using both raw materials and labor.
They have a defined market niche
For this reason, their actions are usually carried out locally.
Types of microenterprises
Although there are various origins and structures for microenterprises, they are usually categorized into three main types, which are:
- Survival
- Expansion
- Transformation
Let’s see the definition of each below:
Survival
These types of microenterprises are created from an economic need, so they do not have a budget, an investment, or base capital. They are characterized by immediate and limited production.
Example: a person who makes and sells cakes at home.
Expansion
Unlike the previous one, this type of microenterprise does have money to grow the business a little more or have more labor. This type of business grows little by little, as it generates income.
Example: a person with the possibility of delegating to someone else the task of making the cakes for him.
Transformation
This type of microenterprise has a higher turnover and, therefore, begins to form capital, thus increasing its chances of growing.
Example: a person with the possibility of renting a place to turn it into a bakery and hire a team to sell different types of cakes.
13 examples of micro-enterprises
Surely you know many of the following examples, but perhaps you have never analyzed why they are part of this type of organization. I list 13 below:
- locksmith
- Tailor shop
- Laundry
- Hairdressing
- Fruit store
- Butcher shop
- Mechanical workshop
- Vulcanizer
- fridge
- Bakery
- Watchmaker
- Seamstress
- taqueria
Advantages of microenterprises
If you are considering creating your own small business, I share five advantages that will help you continue down this path:
- Decisions are made quickly
- The procedures are easy to carry out
- Requires little initial investment
- Provide personalized service to customers
- Generate new jobs
1. Decisions are made quickly
Being you who makes the first decisions, you can draw on creativity, dynamism and flexibility.
2. The procedures are easy to carry out
Setting up your own micro-enterprise requires few requirements, so you can avoid long hours in bureaucratic processes.
3. It requires little initial investment
As I shared with you before, there are 3 types of micro-enterprises, so you can start with the first one and collect capital to grow gradually.
Learn more:
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4. Provide personalized service to customers
If you like to meet and treat different types of people, then this is your ideal business scheme. Since, being a micro-enterprise, you are responsible for carrying out direct care throughout the entire process.
5. Generate new jobs
As your microenterprise grows, it will be possible for you to add more hands, which will be able to benefit from the salary to support their own families.
Obstacles of microenterprises
It will always be convenient to have the complete picture before starting a new business, regardless of its size. Find out what are some of the obstacles that microentrepreneurs can face today:
- Lack of support programs
- lack of technology
- high competition
- Lack of specialized training
Let’s look at each of them below.
Lack of support programs
Although there are a number of programs, they are not enough to cover all the needs of microentrepreneurs, such as constant training.
Low level of digitization
Investing in technology or can become expensive, so the equipment of many micro-enterprises is scarce, which requires more effort and time for those who make them up.
High level of competition
This is because the business model often already exists and a new microenterprise enters to compete directly in the market against others. The clearest case is that of a new grocery store that opens meters from another, previously established.
Lack of specialized training
Although the knowledge of many microentrepreneurs was inherited, many are characterized by being self-taught. Something that sometimes brings with it the lack of training and specialization.
conclusion
Now you know that a microenterprise is the smallest production unit in the business world. You also know its importance for the country’s economy, as well as its main characteristics, advantages and disadvantages.
We hope that after reading this article you have been motivated to take charge of your future and create your own small business and start selling online.
If so, then open your online store with Tiendanube, as well as more than a hundred thousand brands that have done so. And discover the benefits behind becoming your own boss!
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