Five common mistakes Mexican companies tend to make in business
Some of the most common mistakes Mexican businesses make and how they should correct them.
In Mexico, there are four million 15 thousand businesses units of which 99.8 percent are small and medium enterprises (SMEs), which generate 52 percent of the Gross Domestic Product (GDP) and 72 percent of jobs.
Despite these numbers, during the previous six years, more than 350,000 small and medium-sized businesses closed due to, among other reasons, poor administration, products out of time or not having the right equipment.
Given this, it is necessary to constantly evolve and take time to prepare correctly, which will help to avoid future mistakes.
In this regard and for Mexican companies to prosper, G2 Consultores makes mention of some of the most common mistakes they make and how they should correct them.
1. Not being ready to scale up
The companies that are reaching the next level think that their work team should be the same as in the last level, without thinking that new skills will be needed to be able to deal with the new challenges that will arise.
"What worked for you in stage A is not the same as what will work for you in stage B", comments Israel Cerda, partner of G2 Consultores. "Normally you can distinguish them because they are completely different skills, but it is important to know that the client you were selling in stage A has already changed, and you have to think about satisfying the needs of a B client," he added.
As the seniority of the company also grows the volume of sales; however, 44% of companies over five years of age continue with a stagnant sales volume, according to a Konfío survey. And this is reflected in productivity, of which large companies in Mexico have 1.7 times more than medium-sized companies.
2. Idealize your company
Idealizing your company, your product, or your service is not necessarily bad, however, focusing only on the vision of attracting customers and growing and not in the way you operate can bring you big problems.
"Not analyzing the way in which you run and operate your business can cause you to lose sight of one of the most important things: the indicators of your company, as you are failing to attend to timely monitoring of what is happening and why it is happening.", added Cerda.
According to a survey conducted by Geckoboard, small and medium businesses that review their Key Performance Indicators (KPIs) are twice as likely to achieve their objectives.
3. Not having a board of directors
The boards of directors can offer balance, perspective, and strategic contacts for the company, managing to guide it in the right direction; however, not having one or having one poorly implemented or flawed can result in unnecessary ballast.
"Many medium-sized companies do not have a board of directors, that means not having close associates who know the business and who can provide their knowledge, who know how the company is running and who can indicate the errors and blind spots of this", added the partner of G2 Consultores.
The trend in Mexico is that most companies have a board of directors, but medium-sized companies (93%) have it to a lesser extent than small and large companies (96% each), according to a Deloitte study.
4. Underestimating strategic positions
Many times the strategic positions in the companies are underestimated when it is growing and, frequently, it is the family members who occupy them. It is not the same the staff that is needed when the project is starting, which is required when the company reaches a new level, not to mention that sometimes the blood links further impede the operation.
According to data from Condusef and the Ministry of Economy, of every 100 new companies that are established in the country, 65 disappear before reaching the age of two, mainly due to poor administration and lack of knowledge of those responsible in positions keys of companies.
"In the advanced stages of a company, it is normal for entrepreneurs to feel much more confident about what they have to do, but sometimes they do not realize that they need advice and specialized personnel that can help them at the next level, because it is another type of people that should be there, "he explained.
5. Solar direction
The solar direction happens when the organization completely depends on the general manager, who makes the decisions of everything: purchases, sales, recruitment of personnel, among others, creating a dependence harmful to the company, so it is necessary to create a structured operation that allows operate with greater autonomy, and having staff that has the necessary elements to achieve the goals.
"The idea is to form an organization that does not depend on a single person and that has the necessary bases to be able to grow, expand and fulfil the proposal that aims at the market, in order to be more competitive," said the specialist.
Many new business owners make the mistake of not delegating activities to members of their team and this is precisely one of the reasons why many medium-sized companies do not survive. An analysis by Salles, Sainz Grant-Thornton, indicates that a problem detected as a cause of failure of Mexican SMEs is that 42% of them have an excessive centralization of decision-making.
