Only one in four businesses manages to survive more than two years

Mexico has not been able to reduce its high percentage of businesses that fail or close soon, which makes Mexico's small and medium-sized enterprises weaker and less competitive.

According to The Failure Institute, 75% of Mexican companies do not survive the two years, with similar trends in Jalisco.
According to Leticia Gasca, executive director of the institute, an organization dependent on FuckUp Nights, a worldwide community that specializes in counting and investigating the motives of the failures of entrepreneurs and businesses.

According to the results of the Global Failure Index, a global effort of failure research, accessible to entrepreneurs, academics and public policymakers, five reasons were found for business failure in Mexico.

The main reason is the lack of sufficient income to survive, with 65% of the 300 Mexican cases analyzed by the index. Gasca defines it as "the lack of financial planning and calculation that at any given time, it will have enough flow of money to pay a salary." This causes the "entrepreneur does not have enough income to survive and neither does his company."

The second reason is the lack of indicators, ie. "Businesses do not define what is successful for them, nor are indicators that they are achieving it, such as sales, customer, reach, and does not allow them to see if the business is moving forward," said the director of The Failure Institute.

The other three reasons are the lack of analysis of the entrepreneur to observe the degree of customer satisfaction or the growth of a market, the lack of planning in the medium and long term, and not know how to bring their idea to reality.

Among the external reasons that lead to corporate failure, the main ones are economic and political crises, since 37% of them close on this issue. It is followed by a sudden change in customer taste by 26%, and by 19% by the sudden entry of a strong competitor.

Leticia Gasca observes that in Mexico, "it is much more complex and charged to close businesses with all of the law than to open them," which makes it difficult to undertake new projects and access new credits to try another business.