Luis Oliveros offered tips to entrepreneurs at a virtual forum organized by Bancamiga

Bancamiga held a virtual forum with the participation of economist Luis Oliveros, who offered answers to the question: How do I keep my business afloat in a challenging economy? This is one of the questions in the Manual for Entrepreneurs, published by the Bancamiga Publishing Fund.

The expert spoke with more than one hundred participants, including businesspeople and entrepreneurs, who received guidance on how to protect themselves from inflation, collect payments and pay suppliers, develop pricing strategies, cover strategies, study demand characteristics, and provide recommendations for the Venezuelan startup and business ecosystem.

Under the direction of Bancamiga’s Corporate Social Responsibility Department, the dean of the Faculty of Economic and Social Sciences at the Metropolitan University (Unimet) facilitated and reinforced tools that boost business and enable healthy competition in the Venezuelan market.

Inflation and Collections

The first aspect he addressed was the challenges of medium- and long-term inflation. Therefore, a well-structured business plan plays a fundamental role.

Regarding collections and payments to suppliers, he maintained that during an inflationary period, wide collection margins cannot be achieved because this leads to a loss of purchasing power if payments are made only in the national currency. Accordingly, he recommended having other hedging mechanisms in place. “One of the ideal strategies is to divide the profitability between domestic and foreign currency,” he added.

Another option is to establish long-term contracts with clients and suppliers with whom the company desires a stable business relationship. Similarly, it is important to ensure that the accounts receivable turnover is completed in a shorter timeframe and that the accounts payable turnover is extended as much as possible.

Pricing and Hedging Strategy

Oliveros noted that, when setting the price of a product or service, it is essential that its value not be set below the cost structure, as this indicates a problem with the business’s sustainability.

For pricing, it is essential to know the target customer or market niche, and based on this, the company can manage its cost elasticity and demand. He also recommended diversifying the hedging strategy between domestic and foreign currencies.

Oliveros emphasized that the company and the person in charge of its finances must have independence, the freedom to make changes, be flexible, agile, and make quick decisions when the economy fluctuates constantly.

Opportunities

During the presentation, the economist emphasized that “Venezuela is a challenging economy, but it is an economy with significant opportunities and, additionally, it has attractive profit margins that are unavailable in other economies.”

Luis Oliveros also reflected that “entrepreneurs in Venezuela face multiple challenges. Starting a business in Venezuela is a very interesting path, one that comes with challenges, and thanks to institutions like Bancamiga, these challenges diminish along the way.”

“Not only do you have an entity that gives these types of talks, but it also helps you, gives you tools, gives you credit, and generates ideas so you can start your business in the best possible way. All these challenges that arise in Venezuela must be viewed as opportunities. The entrepreneur doesn’t just focus on the problem; he focuses on the solution,” he concluded.

Bancamiga’s Social Responsibility Department will continue supporting entrepreneurs through its business development program, providing in-person and online training activities.

With information and reference images provided by Bancamiga Banco Universal

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