Talk about SMEs in Mexico It is not just talking about Small and Medium Enterprises, it is talking about those businesses that you surely know from friends, your family or your own business. It is to speak of more than four million companies and organizations throughout Mexico, which employ many people and are the livelihood of hundreds of thousands of families.
Small and medium-sized companies are identified by having a low number of employees, a moderate volume of business or income, and of course, the categorization depends on that volume: micro, small or medium, but we will review that topic later.
What will you learn in this article? In the first place, you will know the importance of SMEs in Mexico, you will also know how many there are, what institutions support them, what are the main problems for this type of company in our country and much more. are you coming with me? 🚀
What are SMEs in Mexico?
SMEs in Mexico, so their influence in the world of work is very broad. They are cataloged in three different types (micro, small and medium), and as it is coherent to think, are one of the largest sources of employment for Mexicans.
These types of commercial organizations have gained so many showcases and recognition worldwide that they even have their own day: June 27 is celebrated.
How many SMEs are there in Mexico?
The amount of SMEs in Mexico exceeds 4.9 million companies,
The blow of the pandemic was hard for this sector, since the 4.9 million establishments observed in the 2020 Business Demographics Study (EDN 2020), more than 600 thousand establishments were added, but more than one million 10 thousand closed operations.
Despite this overwhelming panorama, when the health emergency began to subside, the EDN 2021 yielded better results: it was estimated that 1.2 million were born and 1.6 million businesses closed, which indicates that between October 2020 and July 2021, the proportion of births increased, while the proportion of deaths decreased (compared to the data from the EDN 2020).
SMEs in Mexico: INEGI statistics
To better understand the current SMEs in Mexico, you have to check the statistics and numbers around them. Thus, for example, we know that micro, medium and small companies employ , according to data from the National Institute of Statistics and Geography.
Small and medium-sized companies represent 54% of the Gross Domestic Product (GDP), another accurate figure to understand their relevance at the national level, included in the .
What is the classification of SMEs in Mexico?
The classification of SMEs in Mexico is very simple and, as in the rest of the world, it is based mainly on the . That is the first and most important filter to categorize them as follows:
- microenterprises
- Small companies
- Medium companies
I briefly explain what each of them consists of.
Microenterprises (MSMEs)
MiPyMEs or micro companies do not have more than 10 workers. They have a maximum sale amount of 4 million pesos per year, with an accumulated limit of 4.6 million pesos.
Small companies
Small businesses are characterized by having between 11 and 50 employees. 100 million pesos is the limit of its annual billing, with a cap of 95. These first data correspond to the industry and services sector, while the characteristics in the commerce sector are a maximum of 30 employees and a billing of up to 100 million pesos per year, with a cap from 93.
Medium companies
For their part, medium-sized companies have, in the industrial sector, a range of 51 to 250 workers. They invoice between 100 and 250 million pesos per year, with a maximum limit of 250. In the commercial sector, these companies have from 31 to 100 collaborators.
Main problems of SMEs in Mexico
According to figures from the Center for the Development of Business Competitiveness, 75% of small and medium-sized companies in Mexico fail and close their doors before they are two years old, the main obstacles being:
- Administrative complications
- comfort zone
- lack of capital
- problems between partners
Although the problems faced by SMEs in the Mexican territory are different, most of them are just at the head of the companies. Let’s review each of these challenges together:
Administrative complications
The first problem in this section is usually the lack of knowledge of the market in which it will travel. Not making a business plan, with different scenarios or diverse panoramas, usually reduces the growth of SMEs.
comfort zone
Another of the arguments that helps explain the stagnation or low growth of SMEs is conformism.
Following data from the , published by INEGI, 47.5% of SMEs prefer not to grow. Entrepreneurs are satisfied with what they have achieved and stagnate.
lack of capital
According to the , a report curated by the Association of Entrepreneurs of Mexico, 22% of SMEs in our country do not easily access financing or encounter problems to improve their liquidity.
problems between partners
According to the already mentioned Entrepreneurship Radiography25% of companies also see their growth reduced due to internal problems, between partners or entrepreneurs behind the same project.
What are the key digital tools for SMEs?
The health emergency meant a direct blow to SMEs and accelerated their march, and with it, the new tools are here to stay, while some of the old ones also took hold. Among the most useful are these three:
- mobile terminals
- Applications
- digital presence
Now I explain each of these tools so you understand their importance.
mobile terminals
Mobile point of sale allows small businesses to accept payments with cards or linked digital accounts. There are options that even accept payments with food voucher cards, credit cards and more.
For any type of business—starting or experienced—increasing the number of payment options is always the best bet for users.
Applications
Another example of digital tools that can support SMEs are mobile applications with a lot of specific functions, such as online sales, direct customer service, instant shipping services and many more functions.
Some examples are WhatsApp Business, Rappi or some fintech such as Tienda Pago, which are dedicated to offering capital for startups to stock their inventory.
digital presence
Through forums, social networks, paid guidelines to advertise on the Internet, and more strategies, all entrepreneurs can improve the digital presence of their businesses.
Having a digital presence not only helps to attract new clients, it will also improve the reputation, communication and relationship with the already established clientele.
Government institutions that support SMEs in Mexico
In Mexico there are credit benefits for SMEs, many of them offered by the public sector. Among them the following stand out:
- Ministry of Economy (SMEs Fund)
- Mexican Institute of Industrial Property
- Productive Development Unit
Ministry of Economy
The Ministry of Economy has , among them the SME Fund. Take a walk and know the number of options for different types of companies.
Mexican Institute of Industrial Property
For its part, it supports entrepreneurs with facilities for the registration of patents, trademarks, designs and everything related to intellectual property. A great incentive for those companies that start with innovative products.
Productive Development Unit
By receiving many of the functions of the old INADEM, its objective is to reactivate the economy of our country through stimuli to strategic sectors for the different emerging markets.
Importance and relevance of SMEs in Mexico
Yes, SMEs and micro-enterprises are generators of employment throughout the national territory, they offer fixed income for multiple profiles, with all kinds of opportunitiesbut during the pandemic the panorama was complicated for many of them between 2019 and 2020, according to the Business Demographics Study (EDN), published by INEGI.
The Economic Censuses, published in 2019, also make clear the reality of micro and small companies in our country: they employ about 70% of the economically active population.
But of course, without adequate preparation or the necessary legal advice, surviving becomes extremely difficult: according to data from the Center for the Development of Business Competitiveness (CETRO-CRECE), 75% of SMEs in Mexico do not prosper, in fact, the 80% fail before five years and 90% will not reach ten years active.
This refers to a systematic failure, which must be addressed in order to protect at least 70% of jobs in Mexico, created by SMEs, and the 52% that represents GDP.
Do you still have doubts about how to create your SME, how to register with the Treasury and more?
In summary
Done, now you are aware of the situation of the SMEs in Mexico, what characteristics surround them and some of the challenges, as well as opportunities and support they can receive. To help you have it all clearer, here is a small summary:
What are SMEs in Mexico?
SMEs in Mexico are one of the largest sources of employment. These companies represent 95.4% of the organizations.
Small and medium-sized companies are characterized by having a small number of employees, as well as moderate turnover.
How many SMEs are there in Mexico?
Small and medium-sized companies in Mexico exceed 4.9 million units, according to INEGI.
What is the classification of SMEs in Mexico?
The classification of SMEs in Mexico contemplates three levels:
- Microenterprises (MSMEs)
- Small companies
- Medium companies
What are the main problems of SMEs?
- Administrative complications
- comfort zone
- lack of capital
- problems between partners
What are the key digital tools for SMEs?
Some of the most important digital tools for SMEs are:
- mobile terminals
- Applications (apps)
- Social networks, guidelines, web pages, emailing (digital presence)
What government institutions support SMEs in Mexico?
In Mexico there are different ways to obtain support and benefits, both credit and other, focused on SMEs, and most offered by the public sector:
- Ministry of Economy (SMEs Fund)
- Mexican Institute of Industrial Property
- Productive Development Unit
What is the current importance of SMEs in Mexico?
SMEs in Mexico are a cornerstone in the country’s economy. Its importance lies in the creation of jobs (more than 70% are generated by them) and in economic activity (52% of GDP).
Now that you are more familiar with the concepts, current affairs and importance of SMEs,…
Facebook Comments
Disqus