The Importance of Medium-Sized Businesses in Mexico’s Economy
Medium-sized businesses in Mexico face significant challenges from their inception, and maintaining them requires being aware that these businesses must have various financial tools for survival.
It’s worth noting that medium-sized businesses in Mexico are fundamental pillars of the national economy, representing together with small enterprises 98.7% of the private sector and generating more than 50% of the country’s income, according to the National Institute of Statistics and Geography (Inegi). Furthermore, they employ 78% of the formal labor force.
High Business Mortality Rate in Mexico
Experts from HDI Global in Mexico refer to a report by Inegi stating that between May 2019 and 2023, over four years, 1.7 million businesses were created while 1.4 million closed. The high business mortality rate highlights the need for strategies to strengthen the stability and resilience of these businesses, reversing the discouraging figures.
A proper insurance policy can be crucial for mitigating risks such as workplace accidents, material losses, or business interruptions. A disruption or incident in operations could lead to the failure of an entire project,” says Omar Mendoza, CEO of HDI Global in Mexico.
Benefits of Adequate Business Insurance
According to the expert, appropriately insuring a business offers several significant advantages. Besides protecting the company’s capital, it also provides security to employees and allows business continuity in case of unforeseen circumstances. Additionally, it can enhance the company’s perception among clients and suppliers, improving reputational issues that affect new business deals.
“Corporate insurance policies are tailored according to each company’s needs, as well as its operational complexity, organizational structure, and growth strategy. A medium-sized company has the possibility to access a policy that covers its specific requirements based on size,” adds the executive.
Impact of Lacking Corporate Protection
A financial example that illustrates the impact of lacking corporate protection is a medium-sized manufacturing company experiencing a fire in its facilities. Without insurance, the loss could be devastating, leading to closure. However, with an appropriate policy, the business could recover faster, minimizing financial losses and ensuring the continuity of its operations.
Seeking Personalized Advice from Experts
It’s crucial for medium-sized businesses of all sectors to seek personalized advice from experts to assess their specific needs and choose the most suitable insurance coverage. Industry specialists can help identify potential risks and design effective mitigation strategies, ensuring that these companies face market challenges with greater confidence and resilience.
Broader Impact of Business Closures in Mexico
The closure of businesses in Mexico affects not only the entrepreneurs directly involved but also the country’s economic and social fabric.
Key Questions and Answers
- Q: Why are medium-sized businesses important to Mexico’s economy? A: Medium-sized businesses represent 98.7% of the private sector and generate more than 50% of the country’s income, employing 78% of the formal labor force.
- Q: What challenges do these businesses face? A: Medium-sized businesses in Mexico encounter significant challenges, requiring various financial tools for survival.
- Q: What does the high business mortality rate indicate? A: The high business mortality rate highlights the need for strategies to strengthen the stability and resilience of these businesses.
- Q: How can insurance benefit medium-sized businesses? A: Insurance protects a company’s capital, provides security to employees, ensures business continuity during unforeseen circumstances, and enhances the company’s reputation.
- Q: How can businesses find the right insurance coverage? A: Businesses should seek personalized advice from experts to assess their specific needs and choose the most suitable insurance policy.
- Q: What is the broader impact of business closures in Mexico? A: Business closures affect not only entrepreneurs but also the country’s economic and social fabric.
