The Triumvirate of Disaster: This is how a Business Dream Sinks
It seems that the recipe for business failure in Mexico is clearer than the water in a recently changed jug. According to a fascinating study by the Association of Entrepreneurs of Mexico (ASEM) and the consulting firm EY, our brave entrepreneurs have perfected the art of closing deals with the efficiency of a restaurant in a seismic zone. And the magic ingredients are as predictable as traffic at 6 PM: lack of liquidity (26.5%), problems between partners (23.4%) and difficulties in accessing financing (21.5%). Come on, who would have thought that spending more than you earn, fighting with your colleagues and not having money could be bad for business.
But here comes the truly surprising thing: bad administration completes this picturesque picture with a modest 20%. It’s almost as if opening a business without knowing how to add is a bad idea. Who would have imagined it? Mexican entrepreneurs, in their eternal optimism, seem to believe that enthusiasm is legal tender and that bills are paid with smiles.
The Magic Solution That Everyone Completely Ignores
While companies sink faster than the peso at the end of the fortnight, the study gives us this pearl of wisdom: 54% of businesses need to improve their sales strategy. What a revelation. It’s like discovering that in order not to drown you have to swim to the surface. Within this group of enlightened people, 51.5% consider prospecting new clients a priority, 31.3% aim for loyalty and 27.8% aim for new market niches. Because, clearly, always selling to the same aunt is not a sustainable business model.
The president of the ASEM board of directors, Juan Carlos Cante, very solemnly, announced that these findings will be used to design programs that improve business management. Translation: They’re going to try to convince entrepreneurs that maybe, just maybe, they should learn some management before investing the entire family’s savings in an artisanal chai tea shop.
The Best Kept Secrets of Business Success
The research, in a burst of genius, identified five “levers” that multiply productivity. The first is formality, because it turns out that companies that pay taxes and do not operate from the kitchen table invoice 3.6 times more. Who would have thought: complying with the law is profitable. They access credit with better conditions, bidding opportunities and support programs. It’s almost as if the system is designed to reward those who follow the rules, what a revolutionary concept.
Digitalization is another of those crazy ideas: companies that adopt digital tools bill 4.8 times more. They operate more efficiently and make fewer mistakes, unlike someone who keeps writing down orders in a notebook and then loses them. However, 34% of businesses still do not use these tools, either because they do not consider them necessary or because they are unaware of their existence. Probably the same percentage that believes the Internet is a fad.
And here comes the best: MiPYMES that sell to large corporations invoice 3.6 times more. Wow, partnering with companies that do have money is beneficial. Furthermore, companies created by more than one person bill 2.2 times more than those of a single founder, basically because when one wants to give up, the other reminds them that they have already mortgaged the house. And serial entrepreneurs (those who insist on punishing themselves repeatedly) earn 2.6 times more than novices, probably because they already know all the possible mistakes.
To crown this festival of truisms, the study reveals that only 21% of entrepreneurs have received any type of support, while 73% are unaware of existing government programs. Clearly, these programs are promoted as effectively as announcing a condo meeting at 3 AM.
So now you know: if you want your business to survive longer than an ice cream on the subway in August, perhaps you should consider formality, digitalization and not fighting with your partners. Or you can continue to rely on your product being “so good it sells itself.” Spoiler alert: it won’t.
Did this harsh business reality resonate with you? Share this survival manual with that friend who believes that their gourmet grasshopper food truck idea is infallible. And be sure to explore more related content to refine your strategy (or at least to laugh at other people’s mistakes).
