What were the challenges to undertake during the pandemic?

The pandemic represented the most critical moment for companies, especially for small ones because more than 1 million died, although the good news is that ventures were also born in this period, but with challenges to start and develop in the ecosystem.

Only between the year 2020, when the pandemic began, and 2021, some 620,000 companies emerged in Mexicoaccording to data from the Ministry of Finance and Public Credit, which represents an opportunity for economic recovery and jobs.

However, the path to undertake, although before 2020 it had been complicated, during this period it has intensified with various challenges, the main one being lack of financing and liquidity control.

According to the X-ray of Entrepreneurship in Mexico 2021, prepared by the Association of Entrepreneurs of Mexico (Asem), the lack of access to financing was considered the most difficult to undertake with 54%, followed by the high costs of the tax and labor structure with 53 percent.

Regarding financing, a large part of the entrepreneurs and SMEs that existed when Covid-19 reached Mexico did not have the economic strength to continue operating and the credits were not sufficient, which is why many had to close permanently.

Against this background, the Mexican government launched the Credits to the Word, with amounts of 25,000 pesos with an annual interest rate of 6% and a payment term of two years and nine months. Although it allowed investment in some areas, it was not enough to continue the operations of millions of businesses.

Added to this is the third challenge, the delay in the customer payment (19%)which increased due to lack of economic income, the drop in products and the problems that arose in the shortage of inputs in different sectors.

On the side of the costs of the tax and labor structure, it also suffered from not having the possibility of flexibility in the procedures, fees payable, among other areas.

Corruption and crime do not give way

In addition to the economic issue, entrepreneurs have suffered challenges due to the corruption (24%), and the crime and/or robbery (17%), a situation that did not even stop in a pandemic.

Violence against companies, on small and medium-sized ones, generates a cost of 235,000 million pesos, 20% of the national GDP, and the crime that suffers the most is that of extortion which in the first quarter of 2022 increased 2.3% only in Mexico City, reveals the National Chamber of Commerce, Services and Tourism of Mexico City

Another of the common crimes is the collection of a flat (with amounts ranging from 1,000 to 5,000 pesos) and that in pandemic increased by 150%, indicates the National Alliance of Small Merchants. Also the crimes of business robberyeither with violence or ant, were among the most registered.

The inefficient bureaucracy It was another inconvenience with 31%, especially since there is still no optimal management as online processes.

Lack of education

Although the aforementioned elements can be considered external factors, outside the hands of entrepreneurs, there is a challenge that has to do directly with them: the lack of education the preparation for employers (36%).

A bad or non-existent education on business issues and finances leads to poor business administration, which represents the third cause of failure of companies with 29%, only below the lack of market knowledge with 34%, which is also related to the lack of preparation.

Among the topics that entrepreneurs are recommended to start training for, the following stand out:

• About granting financing
• How to raise capital
• Marketing digital
• Management
• Process optimization strategies
• Technologies
• Sales
• digital presence

“The lack of education or preparation to undertake increased 7% between 2020 and 2021”, indicates the Asem.