February 9, 2021 6 min read
Opinions expressed by Entrepreneur contributors are their own.
By: Fil Castro.
Being a business owner in Mexico has always been a challenge, even before the COVID-19 pandemic. According to the results of the 2019 Economic Censuses, the life expectancy of businesses in Mexico is 7.8 years. Factors such as difficult access to credit for working capital, financial constraints to acquire and implement technology, and issues such as insecurity were already putting business owners in trouble.
Then, with the arrival of SARS-CoV-2 in Mexican territory, the situation worsened and in 2020 the scenario became apocalyptic: empty streets, closed businesses and uncertainty could be touched with the fingers. And 2021 still seems not to be the year to reverse.
In the current context, the truly valuable thing is to assume that the new normal is here to stay for a while, so better adapt and evolve than lower the curtain on your business. And if you have decided to face this new context and continue operating, then these three business tips will be of great use to you:
Business tip 1: prepare to make more informed decisions
Quarantine, healthy distance and contactless showed that many of the problems that arise in the day-to-day life of an SME have to do with the lack of a business plan with clear objectives and routes based on the current situation. In fact, a large majority of business owners lack the tools to train due to lack of time or resources, or failing that, because they cannot find the best option for this support.
Image: Vladislav Babienko via Unsplash
The good news is that one of the positive practices that “stay at home” brought was the possibility of accessing webinars and master classes specialized in the administration and operation of your business. Also, formats such as the blog and the podcast made the guidance and expertise of men and women specialists in business management available to everyone. Therefore, neither long distances nor traffic will be a limitation for your business training.
Business tip 2: implement technology in your business
One of the biggest damages that the old school caused to the new generations of entrepreneurs is having them believe that technology is only for big companies. False. The pandemic even accelerated digital transformation in all industries and today, practically every business that wants to survive is forced to implement technological solutions. But where can SMEs start?
I propose to start by considering an ERP (enterprise resource planning) solution in fixed expenses that allows you to better manage your business. It is a set of information systems that allows the integration of certain operations of a company, especially those that have to do with production, logistics, inventory, shipments and accounting. The more control you have over the management of the business, the better the existing resources of the business will be used and the more information you have about it, you will know for sure how profitable it is. Also consider other solutions, such as a CRM solution for customer service and management, and a powerful digital marketing strategy.
Expensive? Not necessarily. In fact, there are On Demand options –contracting the modules you need for the time that you decide– and solutions designed exclusively for the needs of SMEs. There are ERP options in the cloud for less than 300 pesos a month that solve most of the needs with updated information in real time.
Business Tip 3: Get a Working Capital Credit
The lack of access to timely credit under convenient conditions is one of the main factors that keep SMEs in Mexico behind, even though they represent 74% of jobs. Thus, with or without a pandemic, accessing a traditional bank loan confronts the owners of SMEs with complicated procedures, the fear of leaving part of their assets as pledge and waiting weeks or sometimes months with very little probability of receiving an authorization.
But history changed and today, thanks to digital banking, there are innovative alternatives that, through powerful algorithms, are capable of calculating the applicant’s payment capacity in less than 10 minutes and granting loans of up to 2 million for working capital online. Gone are the old practices that left SMEs without access to credit.
If you carefully analyze these three business tips, you will realize that with training and support, better technology focused on solving the specific needs of your business and a business loan, you can operate better and grow your business. Why? Simple: because you can allocate each peso more wisely without going into debt or compromising your future.
We know that these are challenging times for everyone; However, we are convinced that SMEs have the opportunity to reactivate the economy, generate new and better jobs, and lead Mexico to a healthy recovery.