Business

So SMEs can overcome the challenges of the complicated 2020 economic outlook

MSMEs that seek to cross 2020 successfully must change, leave comfort zones and seek to detonate people's potential.

6 min read

The opinions expressed by employees are personal.

So SMEs can overcome the challenges of the complicated 2020 economic outlook
So SMEs can overcome the challenges of the complicated 2020 economic outlook

By: Marisol Monroy and Maleni Aguila / FUNDES in alliance with Great Place to Work® Mexico.

2020 is a challenge for micro, small and medium enterprises ( MSMEs ) in Mexico. However, the challenges are usually the same as in other years. The weak growth of the economy (from 1.2% to 1.5% according to it), low financing (76% of SMEs without access, INEGI 2019), poor coordination with large companies (95% of SMEs were not linked to chains of value, INEGI 2019), low productivity and innovation are just some of those already known.

The above leads us to ask ourselves, in what aspects should MSMEs concentrate to really overcome them and not repeat them? Where should you put talent and effort to make a difference? From Fundes we have detected five keys for 2020:

1. Always learn and implement improvements in the business

According to INEGI, 44.9% of SMEs avoid the issue of training, while in micro the percentage rises to 85% (). Although the reasons vary, it is very common for SMEs to focus on the operation and not look for options to update or make changes. By avoiding it, learning is limited to everyday processes and opportunities to improve leave.

Today there is a wide range of training for MSMEs in all subjects. The formats are diverse and flexible: mini-courses, video channels, semipresence courses, webinars, meetings between SMEs. The fundamental thing is that they are dynamic and practical.

It is important to identify areas of opportunity and issues where the company requires training, aligning them with the interests and abilities of employees. Likewise, goals must be set to apply the new knowledge. If learning is not implemented, opportunities to grow will also be lost.

2. A more humane management of employees is also strategic

By 2020, MSMEs should pay more attention to their employees. In Mexico, SMEs concentrate just over 30.6% of jobs, while MSMEs, 68.4% (). That is, they are the biggest employers in the country. However, according to the IMSS, 75% of Mexicans suffer from fatigue due to work-related stress (surpassing the US and China) and only 1 in 10 receive personalized attention. It is proven, work more hours, it is not necessarily work better.

In October 2019, Standard 035 entered into force, which seeks to identify and prevent psychosocial risk factors at work, in addition to promoting favorable environments in them. It will be applied in two stages, by 2020 companies must generate prevention measures for exposed workers. While by 2021 they must identify psychosocial risk factors, evaluate the organizational environment, perform control measures and actions, etc.

Standard 035 is an opportunity to improve the management of the most important asset in a company: its staff. MSMEs that are better work centers will make a difference by impacting your business with results. The balance between life and work and boosting people's potential will propitiate that difference.

3. Linking opens up opportunities and enriches

Around 95% of SMEs did not participate in global chains (), mostly due to lack of information. When an SME is linked to a value chain, it opens a stage of growth in which continuous improvement and innovation are requirements. In 2020 the keys will be on how to access information to achieve it, because the first thing is to know what is needed and what are the steps to follow.

SMEs that work to have healthy finances, ensure the quality of their products or services, distinguish themselves as excellent employers and innovate, are the ones that will surely overcome one of the challenges of 2020.

Chapter 25 of the Treaty between Mexico, the United States and Canada (T-MEC) gave greater weight to the integration of SMEs to insert them into export markets and increase their competitiveness. SMEs in the metal-mechanical sector, plastic injection, electric-electronic, plastic injection and agri-food will be the main ones.

4. Prepare and look for different financing options

In 2019, the National Institute (Inadem) disappeared, giving support to entrepreneurs, and MSMEs. After its disappearance, the Ministry of Economy through Banco del Ahorro Nacional y Servicios Financieros (Bansefi) will hold three calls to support MSMEs. According to the Expenditure Budget, 1,929 million pesos will be allocated for MSMEs (32% less compared to 2019). In all cases, the key will be to know different financing options and compare them. Ignorance about the offer is what limits access. Above all, it will be essential to prepare for excellent management.

5. Technology is a true friend of MSMEs

In 2020, SMEs must invest in skills, innovation and technology if they want to increase their productivity (). MSMEs tend to have weak technology adoption. However, it is also essential to prepare employees to take advantage of it and not see an obstacle. The next decade will bring enormous and profound transformations in the labor worlds, so it will be key for MSMEs to deepen their use more and more.

MSMEs that seek to cross 2020 successfully must change, leave comfort zones and seek to detonate people's potential.

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