Article and Interview By Valentina Cano
A Food Start-up in a Country in Crisis
Forbes calls Venezuela the “hardest” place to be an entrepreneur. Once one of Latin America’s wealthiest nations, and the country with the largest oil reserves in the world, Venezuela is currently undergoing the most difficult financial and economic crisis in its history. The nation finished 186 of 189 in this year’s World Bank Group Doing Business rankings, making it harder to operate a business than in Syria, Haiti, and South Sudan. From 1999 to 2013, government supporters proudly announced dramatic improvements of quality of life under former President Hugo Chávez. But since the ascendancy of Maduro, Chavez’s successor, Venezuelans have endured a record-breaking recession, wide-spread corruption, price controls, and the highest inflation rate in the world–which is expected to hit 1640% in 2017 (about 27% every month!).
Citizens line up for hours waiting to buy staples such as corn flour, bread, laundry soap, toothpaste, toilet paper, and many other necessities that are taken for granted in the rest of Latin America. Nonetheless, the country is known for its ability to innovate in the face of great hardship; Venezuela maintains one of the highest rates of entrepreneurship in the world.
So why would anyone become a food entrepreneur in a nation where bread is hard to come by?
To better illustrate what it looks like to be a college entrepreneur in the Venezuelan food industry, I spoke with Manuel Arcay, a foodie, who graduated from the Metropolitan University in Caracas with a degree in Civil Engineering in July 2016. Manuel is the founder of La Crêpière (@lacrepiere), a sweet and salty crepe catering business in Caracas, Venezuela.
How did you come up with this idea?
I’ve always been interested in entrepreneurship. As a teen, I enjoyed having “side-jobs.” First, I was a camp counselor. Then, I worked at a stand in a flea market. During my first year of college, someone called me to see if I wanted to sell crêpes at an event in my high school. I agreed. That day I earned about $1000, and I saw the potential this idea had.
What’s the best piece of advice you’ve heard?
Always see small opportunities as a business opportunity.
You recently graduated with a degree in Civil Engineering. Given the high salaries that engineers earn around the world, why would you dedicate so much time to your catering business?
As a recently graduated engineer here in Venezuela, I earn 350,000 bolivars (the equivalent to about $100) a month. In one day selling crêpes, I make more than my monthly salary as an engineer. Nonetheless, I still enjoy working as an engineer Monday through Friday to learn more about my field.
What helped you the most to launch your business?
I must say that my network was crucial to be able to launch my business. I was able to get my name out there through word of mouth. Starting an Instagram account also helped me very much to establish the brand name, and find more clients. Last but not least, between 2010 and 2012, the price of oil was very high, our currency still hadn’t been devalued, and people were spending a lot of money on parties.
Every entrepreneur encounters problems along the way, what were your main setbacks?
Juggling academics and my business were difficult. At a certain point, I even had to stop posting on my Instagram account, because I was receiving more requests than I was able to manage. Moreover, the effort I invest in this business is not directly proportional to my profit. I work weekends and some weekdays, and with the insane exchange rate, which is always changing, from one day to another my profit in dollars can be cut in half.
How does food scarcity affect you?
It affects me significantly when trying to find the ingredients for my crêpes. Usually, I have to spend many hours of valuable time, calling different black market resellers (commonly known as Bachaqueros), or driving around Caracas to find chocolate, flour, and other essential ingredients.
How does price control and the Law of Fair Prices affect you?
As I said before, to find the ingredients in time, I usually buy them from black market resellers. Even though this requires a lot of time, waiting in line to purchase products at the regulated price would take me practically the whole day, and I wouldn’t have any time left for my day-job.
How does inflation affect you?
It affects me in many ways. First of all, I never know how much the ingredients will cost me, which makes it very difficult for me to be able to write a business plan for the year. My clients can also be affected because as the crisis in the country worsens, they stop spending money.
Given the massive price fluctuations, how do you create a budget for your clients?
I have a spreadsheet that calculates the expense per crêpe, based on the cost of the ingredients. Therefore, the cost of my crêpes usually varies every two weeks. I’ve had to change the prices for my clients so many times it’s hard to count.
Have you ever thought of going to any pro-bono events or helping other social classes out?
Given the extreme crisis that our country is undergoing, I don’t think that crêpes are something that the lower class would want to buy. Nonetheless, my employees who help me out with cooking receive extra food and a higher salary than average. In this, I’ve realized you can make a difference in people’s lives.
How many years have you had this business?
Five and counting! I’m currently thinking of turning it into a full catering business, by adding Venezuelans’ favorite food, arepas, and milkshakes. I would have to change the name though.
Finally, what piece of advice would you give to other Venezuelans struggling in the crisis or to other entrepreneurs around the world?
Well, as you can see, I consider that in Venezuela opportunities aren’t for academics, they are for entrepreneurs. Even though we are going through a period of crisis, if you have a good idea, now is always the best time to invest in it. Another piece of advice is don’t ever let excuses hold you back.
Even though it was tough, I could have quickly let my idea fade away because of my academics, or by blaming the country’s crisis. But I decided to stay in the market, which provides me with additional income that truly helps me in the middle of the situation we’re living.