Micro, Small and Medium Enterprises: essential for the Brazilian economy

According to Sebrae data, Micro and Small Enterprises (MPEs) are responsible for more than 50% of jobs with a formal contract in the private sector in Brazil.On October 5, we celebrate the National Day of Micro, Small and Medium Enterprises, a date to celebrate their achievements and reflect on the importance of these companies to the economy of Brazil, which increasingly contribute to the generation of jobs and income.

The MSEs represent 99% of all companies in the country and are responsible for 30% of national GDP, according to Sebrae. Moreover, they account for about 55% of formal employmentthis reinforces their fundamental role in the economy, especially in local communities, where they are often the engine of social and economic development.

The sector is also a key player for the growth of Brazil's Gross Domestic Product (GDP), being responsible for 27% of total GDP.

Many of these companies arise out of necessity, that is, in the face of the lack of opportunities in the formal labor market, people turn to entrepreneurship as an alternative to livelihood. This reinforces the importance of public policies to support MSEs, such as facilitated access to credit and entrepreneurial training.

Essential financial care

For those who are thinking of undertaking, Marlon Freitas, CMO of Agilize, an online accounting company, highlights some fundamental financial care. “It is essential to understand the cash flow to monitor inflows and outflows and control debt, analyzing the need for third-party capital and the ability to pay. Negotiating better conditions with suppliers and business partners is also part of the smart financial strategy”, he warns.

Another crucial point is the balance point, which indicates the volume of sales required to cover all fixed and variable costs, that is, the minimum that the company needs to sell in order not to operate at the loss.“Another important indicator is the profit margin. When it starts to decrease, it is a warning sign for possible problems of profitability”, adds Freitas.

Resilience: a fundamental skill

About the characteristics that every entrepreneur must develop, Marlon Freitas emphasizes resilience.“The entrepreneur deals all the time with uncertainties.We like to work with data, but the reality is that no one has full control. Therefore, it is so important to be prepared to start over every day, if necessary”, he says.

He also highlights that the ability to adapt is essential to face the challenges of the market: “The entrepreneur needs to know how to deal with uncertainty and adapt quickly.They are people with a high capacity to adjust their strategies in the face of unpredictable scenarios. In this way, it is possible to put their feet on the ground and balance the vision of the future with the needs of the present”, concludes Freitas.

MSEs are undoubtedly the backbone of the Brazilian economy. Not only do they generate jobs and move the local economy, but they also represent an important source of innovation and flexibility in times of crisis National Day of Micro, Small and Medium Enterprises it is to recognize the resilience and adaptability of millions of Brazilian entrepreneurs who, day after day, drive the development of the country.