Introduction to Mexico’s Small and Medium Enterprises (SMEs)
In Mexico, micro, small, and medium-sized enterprises (SMEs) form the backbone of the economy, comprising a significant portion of the total business units and generating approximately 7 out of every 10 jobs in the country.
Moreover, SMEs contribute nearly half of Mexico’s Gross Domestic Product (GDP).
Classification of SMEs
SMEs are primarily classified based on the number of employees and annual revenue levels:
- Microenterprises: Up to 10 employees (with variations depending on the industry, such as up to 30 in commerce and manufacturing/services)
- Small enterprises: 11 to 50 employees (in commerce) or 30 employees (in manufacturing and services)
- Medium enterprises: Up to 100 employees (in commerce and services) or up to 250 employees (in manufacturing)
Family-Owned Businesses in Mexico’s SME Landscape
A large proportion of these SMEs are family-owned businesses, with simple organizational structures. In fact, 9 out of every 10 Mexican SMEs emerge as family enterprises.
Average Lifespan and Challenges
On average, SMEs in Mexico have a lifespan of 8.4 years. The primary reasons for failure include insufficient liquidity and internal conflicts.
Key Questions and Answers
- What are SMEs in Mexico? SMEs, or micro, small, and medium-sized enterprises, are the driving force behind Mexico’s economy, accounting for a significant portion of business units and generating roughly 7 out of every 10 jobs.
- How are SMEs classified in Mexico? SMEs are categorized based on the number of employees and annual revenue levels. Microenterprises have up to 10 (or 30 in certain industries) employees, small enterprises range from 11 to 50 (or 30 in manufacturing/services) employees, and medium enterprises have up to 100 (commerce and services) or 250 (manufacturing) employees.
- What percentage of SMEs in Mexico are family-owned businesses? Nine out of every ten SMEs in Mexico are family-owned businesses with simple organizational structures.
- What is the average lifespan of SMEs in Mexico, and what are common reasons for failure? The average lifespan of SMEs in Mexico is 8.4 years. Common reasons for failure include insufficient liquidity and internal conflicts.
