Mexico continues to attract startup entrepreneurs, business executives looking to expand their brand, and expats from the US hoping to carve out a living for themselves. This is no surprise considering the colorful and booming trade market within the country.
In fact, as early as 2018, Mexico has already become the third-largest trading partner of the United States.
As with any business, the road ahead may be rough. To make your journey smoother, here are some important things to consider, and pitfalls to avoid.
Be Aware of the Challenges That Lie Ahead
Right from the start, you will need to deal with permits and other legal requirements when doing business in Mexico. Naturally, processes will be different from what you know in the US. It’s important to brush up on these before they become a problem, so that when they show up, you will be better prepared.
Be aware that obtaining those permits can be painfully slow, so hiring people or companies who know what they’re doing is very important.
It’s also worth mentioning that as an American, especially an inexperienced one, you could find yourself being targeted by people who are more interested in your money than in providing what you’re looking for. Make sure that anyone you deal with has references, and a good record. For any potential long-term suppliers, it’s worth performing a background check.
Deal with Slow Permits
As we brushed on earlier, permits can take a significant amount of time. It’s worth preparing yourself mentally for this, as it can otherwise become quite discouraging.
Labor Laws, Taxation, and International Trade Laws
It is best to familiarize yourself beforehand with Mexico’s labor laws and tax regulations. This is to minimize employee turnover and to cut down costs on hiring and training.
It’s advisable that you hire legal and tax consultants in Mexico, particularly those who specialize in bridging the gap between Mexico and the United States. With that said, make sure to factor in consultation fees when considering your budget.
As for international trade laws, not all local businesses and manufacturers are familiar with these. To avoid costly mistakes down the road, it is best to deal with people (both Americans and Mexicans) who have experience in this arena.
Learn Spanish
That’s right – doing business in Mexico will be more successful if you learn Spanish. Mexicans will appreciate the effort, and you’ll find forming relationships with suppliers and customers to be that much easier.
You don’t have to have a perfect grasp of Spanish before starting a business in Mexico though. Start with simple and polite phrases, which will already go a long way to smoothing out relations. Don’t be afraid to make mistakes either – Mexicans usually find broken Spanish quite charming, and the mistakes could actually help you form a connection with them if they find them funny!
Learn Mexican Business Etiquette
Aside from the language barrier, cultural differences are also one of the main challenges to deal with.
For those of you who are used to getting directly to the point during business meetings, or getting to your pitch right away, this is not ideal for Mexican business people. They prefer to build relationships first, then do business later, so don’t neglect the small talk. Be patient and get to know your potential business partners and suppliers in order to build trust, and, in turn, better deals.
Take note as well that Mexicans put a lot of cultural emphasis on seniority. Do not expect a junior executive to complete important deals with senior executives in the country, for example. You might end up inadvertently insulting someone who feels that you are treating him or her with a lack of due respect.
Carefully observe body language as well. Mexicans often don’t like to say no to things right away and would rather skirt the issue or be vague. Quite different from the direct way Americans like to do things. That’s why it is important to notice non-verbal cues when talking with local business people to understand what they mean.
Other important things to avoid are things such as being late, not dressing professionally, and not exchanging business cards. In most cases, these are frowned upon, although there will always be exceptions with different personalities. But when in doubt, always go for what is considered is good business etiquette in Mexico.
Be Affectionate with Mexico
Just like most people around the world, Mexicans love it when visitors show love for or interest in their country. So get to know the country more – the beautiful destinations, cuisine, sports favorites, and more. Consider taking one or two ‘fact-finding’ trips beforehand – just try not to get too distracted!
Source Local Talent
Mexicans have their business culture, and ultimately their own way of doing things. Try not to impose American processes and mindsets onto your employees. Take advantage of local talents and their innovative thinking. Be considerate and flexible.
Doing business in Mexico is an exciting prospect for many American entrepreneurs as there are plenty of opportunities and profitable ventures to be found. If you take the time beforehand to understand the laws, the people, and the culture, you’ll find the experience far more smooth than you would if you went in blind.
If you’re looking for help finding a good factory to manufacture your products, consider taking a look at our curated list of Mexican factories. Hand-picked by us, you can rest in the knowledge that you’re dealing with the best-quality suppliers in Mexico.
