Why I'm Still Bullish on Mexico: Nearshoring Realities for Small Businesses

I’ve said it before and I’ll say it again: I’m bullish on Mexico.

During this month’s Ask the CFO session, we turned our focus to nearshoring—an increasingly important strategy for small and mid-sized businesses that want more control, better cost structure, and protection from global uncertainty.

This isn’t just about headlines or political trends. It’s about practical operations, risk mitigation, and long-term financial strategy. For business owners thinking about outsourcing, relocating, or expanding operations—especially those in light assembly or fabrication—nearshoring to Mexico and Central America can be a smart move.

Why Mexico?

I’ve been working in and around Mexico for decades. I lived in Mexico City in the ’90s and have supported clients with operations in cities like Puebla ever since. Here's why I continue to advocate for it:

• Cost advantage: You’re often paying 20–25% of the labor cost in the U.S., even after factoring in government costs and benefits.

• Skilled labor: The central regions of Mexico (outside of saturated hubs like Monterrey or Guadalajara) have strong engineering, accounting, and technical talent.

• Proximity and culture: Being in the same time zone (or close to it) makes collaboration smoother than offshore alternatives, and many cultural barriers are lower.

• Tariff advantages: Under the IMMEX program and the broader USMCA trade framework, you can avoid tariffs altogether if materials are exported and returned within 180 days.

But you have to do it right. That means understanding the infrastructure limitations, hiring the right local partners, and monitoring logistics closely. For example, I’ve seen UPS and FedEx apply incorrect tariff charges on duty-free shipments—so someone needs to be auditing your freight bills.

What About Costa Rica and India?

We also touched on the broader global options. I have clients operating in Costa Rica who’ve had great success with more labor-intensive, semi-technical processes. It’s a stable, educated workforce, and while infrastructure isn’t perfect, it’s workable with proper planning.

India? I’ve seen tremendous engineering and accounting talent there—especially when the teams are directly employed and integrated with your core operations. When I led a global team, we had engineers in Pune contributing across our projects worldwide. But here’s the catch: they were our employees, not freelancers. That direct accountability made the difference.

The Bottom Line: It’s Not Just About Cheap Labor

Nearshoring isn’t a magic bullet. You still need to:

• Ensure you’re adding value beyond just saving costs.

• Understand cultural and legal dynamics.

• Balance quality with price and control.

It’s a long-term strategic decision—not just a tactical move to trim expenses.

What stood out most to me in this session was how many owners are curious but cautious. They’re feeling the pressure of rising costs and uncertainty, but they’re not sure how to move forward without sacrificing quality or control. That’s exactly the kind of topic we dig into at Ask the CFO—practical, nuanced, and tailored to your specific business stage.

If you missed this session, I encourage you to join us today and sign up for the next one. We talk strategy, we troubleshoot real-world business issues, and we get honest about what’s working and what’s not.