Being an entrepreneur requires an innovative attitude no matter where you start your business. But imagine trying to develop a budget and work plan for your small business when the value of your currency changes daily and depends on where you go to exchange it. Inflation in Argentina has climbed by about 40 percent in 2014, with very few signs of slowing. We sat down with 2014 VV GROW fellow Mariela Ioszpe, Co-founder and COO of Educatina, to talk about what the economic crisis in Argentina means for her business.
Can you tell us a bit about your business and what prompted you to start Educatina?
Many young people in Latin America have limited access to high quality education and tutoring during their studies. We started Educatina because we are committed to improving education in Latin America through providing free, high quality educational content and interactive tools. Educatina was a chance to generate a business that could expand access to quality education and have widespread social impact. In just 3 years, we’ve grown to a staff of 15 people and have been able to generate about 25,000 educational videos and interactive exercises, viewed by more than 3 million students every month.
How is the current economic climate in Argentina affecting Educatina now?
For small and medium enterprises in Argentina, economic instability has been a huge challenge because we don’t have a financial cushion like larger businesses or sites in more economically stable countries to help us absorb the shock.
At Educatina, these high levels of market volatility have made it difficult to plan for growth in the medium and long term. We’ve also had to look for additional ways to keep employees and consultants motivated in a scenario where the purchasing power of their income is in flux.
How are you addressing these challenges?
We’ve had to be creative and put a lot of attention and consideration into resource management. We’ve developed an aggressive and controlled financial strategy that takes market instability into account. We’ve developed out multiple financial plans for both optimistic and pessimistic scenarios. We reevaluate our growth plans and budget multiple times each month, depending on trends in the market. When we create annual budgets, we factor in 40 percent inflation. On a monthly and even sometimes weekly basis, we develop different scenarios around best and worst case for inflation and take the average for our financial projections.
To keep our employees and consultants motivated, we created a system of financial and non financial incentives to reward high quality work and dedication to our mission.