Creating Solid Foundations for Startup, Accelerated Growth

When we think about the economic power of our country, it would seem logical to associate it with the fact that it derives mainly from large corporations and foreign capital investments. It would not sound unreasonable to ensure that the majority of jobs and contribution to GDP come from medium and large companies; however,  this is not the case. According to this year's figures from Expansion magazine, small and medium-sized companies generate 72% of employment in Mexico and contribute 52% of GDP. This means that its economic impact is very important. But, what are the characteristics of these companies and what do they need to survive? 

According to descriptions from the Ministry of Economy, we could identify four main business groups that make up the previously mentioned data:

• Entrepreneurs: Entrepreneurs are women and men in the process of creating, developing or consolidating a company based on an idea. In many cases, they do not have sufficient business experience, technology or financing to materialize it. They start their business project from the identification of a business, the need for a product or service or simply have the enthusiasm to start a company.

• Microenterprises: Microenterprises are all those businesses that have less than 10 workers and generate annual sales of up to MX$4 million (US$221,000).

• Small companies: Small companies are those businesses dedicated to commerce, which have between 11 and 30 workers or generate annual sales of more than MX$4 million and up to MX$100 million (US$5.5 million). They are independent entities, created to be profitable, whose objective is to dedicate themselves to the production, transformation or provision of services to satisfy certain needs and desires existing in society.

• Medium-sized companies: Medium-sized companies are businesses dedicated to commerce that have from 31 to 100 workers, and generate annual sales ranging from MX$100 million and can exceed up to MX$250 million (US$14 million).

These companies have the main challenge of surviving and generating stability in the first instance, but above all, being able to grow as quickly as possible. For this, it is ideal to consider the following points to become companies that generate more wealth and jobs, which means higher profits for their shareholders and a positive impact for the country:

• Organization and projection. The first thing that a newly created company or a company that has only been in the industry for a few years should consider is having a well-defined organizational structure and a projection of where it wants to go and how it will evolve. This means that, ideally from the conception of the idea in the entrepreneur stage, there is at least a basic organizational chart (both current and future) as well as a business plan, definition of the marketing mix variables and, above all, a well-defined mission, as suggested in the following article: Business Success Mission Strategy And Tools.

• Technology. In our current business reality, it is impossible to stay and advance if you do not have the basic technology. For this, there are different tools that allow companies and entrepreneurs, without the need for significant investment, to have their technological base for the management of the company. In Mexico, for example, a basic point is electronic invoicing, which is why it is essential to have a system that meets that need and, preferably, also meets basic administrative management. One of the best options for those companies that are just starting out is the UXBI Start system, which for a very small price meets what is required to get off the ground and, best of all, it has more robust subsequent versions that accompany the company in its growth.

• Innovation. Previously, I mentioned the importance of defining the product, but special mention should be made that this product has to be innovative in order to penetrate the market. It is essential to have a differentiator that allows you to generate sales and maintain constant growth, which can only be achieved with differentiated products that meet market needs.

• Scalability. This means paving the way for the four variables of the marketing mix with the necessary features, which will largely be technology, to be able to reach  a large number of customers with a minimum investment.

• Cost reduction. The previously mentioned scalability must necessarily be accompanied by reduced costs. Process automation normally helps this perfectly and, most commonly, technology through information systems and software do that job.

• Income generation. In the end, it is essential that everything leads to revenue maximization, for which a good communication strategy is required, a product that solves real problems and, above all, a real focus on the client.

If all of the previously mentioned is supported by systems that help to measure indicators and take corrective actions in an agile manner, the probability of success and growth is very high and that small company will become, in a short time, a growing company that generates great positive impact.