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Advice for SMEs and entrepreneurs in challenging times

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The rise in inflation, the uncertain economic outlook and the high price of the dollar, with the consequent devaluation of our currency, are factors that are causing entrepreneurs and owners of small and medium-sized businesses to once again see their ability to survive threatened.

Preparing for tough times can be critical to long-term success, but the current situation is not normal. The forced stoppage of activities during the pandemic barely allowed businesses to recover for a few months and now they are faced with these problems without having had the opportunity to get ahead.

Therefore, the measures implemented by the Government to support SMEs are essential, which are also the engine of the economy and provide almost two thirds of the existing jobs in the country. In fact, the recently announced Budget Law speaks of 58 billion pesos for the strengthening of the credit access program for unbanked SMEs with the aim of strengthening entrepreneurship.

But as long as that doesn’t happen, you have to survive. And neither will access to credit for SMEs solve the underlying issue by itself. Thinking about this, and while the economic cycle is going down, one of the first pieces of advice we can give to SMEs and startups is to focus on businesses that solve specific problems for people through an effective, simple product offering that have a market opportunity.

It is also very important to allocate expenses to really essential areas and extend cash flow estimates as long as possible. The fundamental purpose of any company is to grow, but when this becomes difficult because the income is variable and the economic recession increases the expense of inputs, the goal must be to sustain itself by focusing on the operation of the business. Creating an extra emergency fund month after month – regardless of whether the savings are not huge or fixed – can make a difference in the future.

Another important factor to take into account is taking care of our work teams. They are the economic support for their families and, furthermore, we need their talent to keep the company afloat. Let us remember that it is in difficult periods that people’s mettle is tested and if we remain united, we are more likely to find alternative paths and have allies to help us carry out projects. It is important to value those with whom we share the working day, hopefully listening to them more and fostering informal conversations that help us discover new answers to what we are facing.

A final call has to do with resilience. Although things look bad today, historically cycles go up and down. Thinking positively, this can be a good opportunity to analyze our work, adapt, plan the steps to follow and be attentive to the signs. Bad experiences teach us a lot about ourselves and expose us to challenges that we didn’t think we were capable of doing before. If we know how to get around them, the benefit is that we will come out of this situation wiser, stronger and prepared for what comes in the future.

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Source: Elmostrador

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