Navigating the Harsh Economic Trends- For entrepreneurs and startups

The past year has seen the world undergoing a series of speculative market trends. Most of the countries if not all have been going through surging inflation, and this has affected companies of all sizes. Telling by the way in which companies are downsizing.

#vcfunding firms are no longer pumping monies into #startups as they used to, and most of these companies are slowly sinking so deep they are on the verge of insolvency in every literal sense. In order to stay afloat, most of them have been downsizing massively, doing away with redundant positions, and trying to cut down on unnecessary costs. There's a huge lesson here, particularly for entrepreneurs and emerging startups in developing countries on how to navigate such markets.

Economic analysts slowly approaching the blackhole of economic trend prediction, each one of them predicting their own things, some claim that the next stop is the recession, but we've seen some countries experiencing disinflation, some stagflation, and some like my own country Kenya that are experiencing a cocktail of all these ('flations terms'), what the economists call agflation. This is not their fault, it's so difficult to time markets.

As a #business strategist, based on my research I would recommend entrepreneurs, startups, and any other companies irrespective of your growth stage to try the following strategies, some of which are drawn from my knowledge of #mathematical Finance. They might be unconventional I know but trust me we need generalists, specialists are overrated ?? Here are a few tips:

First, When starting businesses that are affected heavily by fluctuations in fx and interest rates, for example, fintech such as digital lenders, they should consider hedging their portfolios. If you are borrowing money to lend for profits, maybe allocate a portion of the borrowed amount to be invested in financial assets. Some of the assets I'd recommend in order of priority would be short-term notes, bonds (especially volatility and inflation-indexed bonds), swaps, and currency forwards. This is the most powerful tool against market uncertainties, if you can use it well, you won't worry about the costs.

Second, (i) if you are looking for funding, don't focus on foreign investors, the reason being most borrowers will not allow you to negotiate loans that are denominated in one's own currency. Try to look for funding locally, from banks, local investors, etc. so that in case the local currency starts losing its value, and you are forced to restructure the debt, you'll have the advantage of negotiating along the lines of the cost of debt (ii) This is to emphasize on point (i) debts denominated in one's own currency can be successfully restructured with the government's help, such that when the central government simultaneously provide stimulus, inflation and deflation can be balanced against each other.

Third, If you are thinking about opening a business, try to think around the business that will mobilize local resources and human capital as opposed to the ones that rely heavily on importation. This will protect you against shortages, and price volatility because fx rate parity and income parity advantages that they come with.

Fourth, this is my last point, I know marketing experts will differ a lil ??In your pricing strategy, whether you are setting new prices or revising your initial prices be sure to factor in the change in the priority of expenditure of your customers during scarcity. You don't want your product to end up as a nice-to-have solution to your consumers as opposed to a necessity.

With these few words, feel free to inbox me in case you'd like us to discuss in detail any of the above-highlighted tips. #entrepreneurship is not a solo journey, let's, exchange ideas so that we can all win