What Is the Mexican Businessman Like? Here Is the X-ray of Entrepreneurship in Mexico

The ASEM X-ray reveals that 50% of entrepreneurs have founded more than one company and 7 out of 10 entrepreneurs had a company that failed.
What Is the Mexican Businessman Like? Here Is the X-ray of Entrepreneurship in Mexico
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Entrepreneur Staff
5 min read
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

This Tuesday, the Association of Entrepreneurs of Mexico (ASEM) presented the X-ray of Entrepreneurship in Mexico , a comprehensive study from the perspective of entrepreneurs, who have founded micro, small, medium and large companies , which are the main employers of the country and an important engine for the economy.

The study was carried out thanks to the support of the technology company Akky and the research company Nauta, a benchmark in the field in Latin America. For this, 1,102 founders of companies from all sectors in the 32 states of the country were consulted between August and September.

It is expected that the X-ray of Entrepreneurship in Mexico will have an annual follow-up, “that will give us a guide to know, periodically, how entrepreneurs are and how much we have progressed as a country to improve the environment in which it is undertaken business. We are sure that the results will be useful for the development of programs, alliances and legislation in order to promote entrepreneurship in the country ”, stated Camila Navarro, leader of the Public Policies Committee of ASEM.

Click on the infographic to see the full study and in a larger size / Image: ASEM

Findings

Among the findings of the study, it is worth noting that the main reason for failure of entrepreneurs is not knowing the market (34%), followed by poor business management (32%).

The main reasons to undertake are to seek personal and professional growth (42%), followed by solving a problem in the market (31%); In other words, for entrepreneurs "it is not only about undertaking to earn money, but to grow professionally and that great difference is marking the entrepreneurial spirit," said Josefina Bauer, director of Nauta, a research company.

They were also consulted about the main sources of financing they used to start their business, and it was found that their own resources (90%), resources from family or friends (28%) and bank credit (11%), are the most used . It is striking that public funds (5%) are the fourth source and that credit from fintech companies (1%) is the seventh. These responses were multiple, given that there is usually more than one source of financing.

The X-ray also reveals that 50% of entrepreneurs have founded more than one company and that 7 out of 10 entrepreneurs had a company that failed.

The study also allows us to understand more focused problems. One of them, related to gender equality, is that one of the main reasons why companies founded by women fail is the lack of time to manage their company; while for men it is one of the least frequent.

85% of companies have a digital presence, “but the interesting thing is to see how they are entering these areas, because of that 85%, 74% are doing it without help, it means that there is a very large market of people who are venturing into its digital strategy with the little knowledge it may have ", Navarro underlined.

Another aspect that stands out is that Facebook is the main channel for disseminating products and services, serving customers and making online sales, which is why it has positioned itself as an essential tool for entrepreneurs in the country.

Regarding online sales, 53% of the companies had an increase in their sales from the start of the confinement measures due to the pandemic.
Regarding the perception at the country level, 48% of entrepreneurs consider that the facilities to undertake are bad or very bad, and point out as the main obstacles: financing alternatives, tax structure and bureaucracy.

Dr. Ernesto Amorós, director of EGADE's doctoral programs, pointed out that “the X-ray of entrepreneurship in Mexico shows the resilience, but above all the capacity for innovation and transformation that most entrepreneurs in the country have. With a significant sample of entrepreneurs from across the country, this study reveals some very remarkable data.

Faced with an adverse environment mainly due to the effects of the COVID-19 pandemic, but also in an institutional context that is unlikely to improve the conditions to create new companies. Entrepreneurial women and men in Mexico once again demonstrate that SMEs and those of recent creation are and will be a fundamental part of the economic and social recovery of the country ”.

Next steps

Based on the first findings, ASEM announced that it is already working on two projects related to programs and legislation. One to have a progressive fiscal policy that promotes the transition from informality to formality and allows greater tax collection with greater reciprocity towards companies in the payment of taxes. As a reference for current reciprocity, in the 2021 Federation Expenditure Budget Project, only 0.06% is destined to support programs for MSMEs, mainly through microcredits.

On the other hand, the association is also working on a new reform to the general law of mercantile companies, so that more companies can be established on the Internet at no cost and from a single partner, as today happens with the Simplified Stock Company (SAS ).

Both projects are being developed in collaboration with Tec de Monterrey and the Friedrich Naumann Foundation, and progress is expected during the end of the first quarter of 2021.

The results of the study are available in the Research section of the site: www.asem.mx.

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