Establishing a Currency Trading Advisory Firm in Mauritania

The proposed business aims to establish a currency trading advisory firm in Mauritania by conducting comprehensive market research to identify opportunities. The focus will be on providing expert guidance to businesses engaged in international trade, leveraging the fluctuating EUR-MRO exchange rates. Key elements include assembling a knowledgeable team, creating strategic partnerships, and ensuring compliance with local regulations. The proposal emphasizes innovation, effective client relations, and employee management as critical success factors.

Running Head: Entrepreneurship
Entrepreneurship
Currency consulting

Entrepreneurship 1
Contents
Introduction......................................................................................................................................1
Entrepreneurial themes....................................................................................................................3
Opportunity creation....................................................................................................................3
Opportunity recognition...............................................................................................................4
Business idea development..............................................................................................................5
Business resources required.........................................................................................................5
Marketing mix:.............................................................................................................................5
Business model canvas.................................................................................................................6
Value proposition.........................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

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Introduction
Entrepreneurship is the process of starting a new business by any individual or a group of
individuals1. This is an extremely crucial aspect for the growth and development of any
economy. Efficient entrepreneurship gives way to finding loopholes in the existing market,
creating an opportunity by fulfilling these loopholes and finally introducing solutions.
Entrepreneurship is hence promoted by various governments by offering different aids and
subsidies2.
Mauritania’s trade industry is growing at a steady pace. The second quarter of 2017 recorded
160.15 billion MRO exports3 and 466.74 billion MRO imports4. Most of Mauritania’a trades take
place with Euro being the currency of exchange. The country predominantly exports iron, oil,
gold and copper5. Whereas the main imports include Fuel, machinery, foodstuff and construction
materials.
My business idea revolves around opening a currency consulting firm. The idea behind
launching this business is to guide importers and exporters regarding various risks associated
1 Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., Entrepreneurship and small business,
2014.
2 Hatten, T.S., Small business management: Entrepreneurship and beyond, Nelson Education,
2015
3 Trading economics, ‘Mauritania Imports’, https://tradingeconomics.com/mauritania/imports,
2017, (retrieved on 21 November 2017).
4 Trading economics, ‘Mauritania Exports’, https://tradingeconomics.com/mauritania/exports,
2017, (retrieved on 21 November 2017).
5 International trade center, ‘Mauritania’, http://www.intracen.org/country/mauritania/, 2017,
(retrieved on 21 November, 2017).

Entrepreneurship 3
with the fluctuating currency of our country6. At present, the G7 currencies are the most
important currencies guiding the currency markets across the globe. These G7 currencies involve
USD (United States Dollar, EUR (Euro), JPY (Japanese Yen), GBP (Great Britain Pound), Swiss
Franc, CAD (Canadian Dolar) and NZD (New Zealand Dollar).
At present the the value of MRO against Euro is 417.64. The last one year has witnessed
immense currency fluctuations with our currency touching a high of 369.64 against Euro and a
low of 435.67 against Euro7. This frequent fluctuation in the currency directly impacts importers
and exporters by affecting their profits in various trade transactions. Therefore they use various
tools to hedge their currency against these risks.
The currency consulting is a business of tracking our currency against the G7 currencies,
forecasting the movements in the same and advising clients regarding how they can hedge their
currency to avoid losses. The target customers of the firm would be exporters and importers who
face a currency risk in their business transactions.
The idea is predominantly unique because Mauritania has various currency brokers who assist
exporters and importers in trading their currency and coverting it to foregin currency. The top
brokers include Pearl capital markets, Forex Mauritania, Compare money transfer. These firms
do not provide exclusive consultancy about what the future of the currency market looks like and
how they can protect their trade transactions from such currency risks. This where the we
identified an opportunity for a currency consulting firm which will not only help businesses in
trading their currency but also provide a daily guidance upon the forecasted future of the
currency and various heding tools that can protect the clients from facing a currency loss.
6 Jereb, E., Cudanov, M. and Urh, M., Interest in Currency Trading Learning-Preferred Methods
and Motivational Factors. Organizacija, 49(1), p.3, 2016.
7 XE, ‘Mauritania’, http://www.xe.com/currencyconverter/convert/?
Amount=1&From=EUR&To=MRO, 2017, (retrieved on 21 November, 2017).

Entrepreneurship 4
We have established that the importers and exporters of the country have little or no knowledge
about the functioning of the currency markets. This is why they often face unexpected losses
owing to the fluctuating currency. The two sided sword of the currency market ensures that if the
currency strengthens, the exporters face losses and if the currency weaken, the importers face
losses. This makes it a brilliant opportunity for a consultancy business specializing in currency
markets.
There are numerous trade associations who can provide data about the exporting and importing
countries at Mauritania. Moreover, this data is easily available online. The sales team of the
consulting firm would be reaching out to these exporters and importers by cold calling. The firm
can also organize various events and spread awareness about those events via newspaper
advertisements and efficient social media use. The agenda of these events would be to educate
importers and exporters and increase our clientle.
The country offers no specific student courses on currency markets. Moreover, the owners of
various import and export houses are more focussed on their primary functions which are
production, sales and marketing. Currency knowledge, is therefore, a secondary function and can
be outsourced. The currency consulting firm would be guiding importers and exporters about the
following:
1. Interest rates
2. Currency forecast
3. Hedging tools
Our business would include a sales team for approaching clients, a research team for studying
currency marketing, a marketing team for brand awareness and a client relationship management
team to ensure client retention. After doing immense research, we have found out that this
service would be extremely beneficial for both importers and exporters and hence our business
will provide exactly that.

Entrepreneurship 5
Entrepreneurial themes
Opportunity creation
Opportunity creation refers to the idea of starting something entirely new by creating an
opportunity for the same. Opportunity creators consistently tend to provide better things than
those that currently exist8. The idea behind opportunity creation is to see today’s problems as
solutions for the future. For example, earlier travel was limited to trains and commuting by road.
This was as very time consuming process. The first person to build airplanes and the first
organzation to make it available for public use created an opportunity and for everyone to
commute faster.
Opportunity creation is extremely beneficial as well as necessary for an economy to grow. This
leads to new and innovative businesses and an overall growth of the country9. Internet has
specially made this process much easier. The business of currency consulting is a very new idea.
There are no firms which are currently dedicated to tracking and understanding currency
movements and advising importers and exporters on the same. This is creation of an
opportunity10 . At the moment, the exporters as well as importers are managing their currency on
their own. Some have hired finance experts to guide them. However, no one has a dedicated
team outsourced to track currency 24/7 and guide them on the same.
8 González, M.F., Husted, B.W. and Aigner, D.J, Opportunity discovery and creation in social
entrepreneurship: an exploratory study in Mexico, Journal of Business Research, 2017.
9 Goss, D. and Sadler‐Smith, E., Opportunity creation: Entrepreneurial agency, interaction, and
affect, Strategic Entrepreneurship Journal, 2017.
10 Jarvenpaa, S.L. and Välikangas, L., Opportunity creation in innovation networks. California
Management Review, 57(1), pp.67-87, 2014.

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The uniqueness of this business can be understood by first understanding what brokers
do.Exporters and importers are in need of foreign currency for their trade transactions. Due to
immense fluctuations in the currency market, these businesses use various tools to protect
themselves from risk. For example, one of the tools is ‘Forward booking’. By this tool,
businesses can fix the rate that they will receive for their currency at a future date by paying a
premium11. This can be explained as below:
+ =
This is one of most important tools that is used by export/import businesses to hedge their
currency against risk. To use this particular tool, businesses need either ‘currency exchange
platform’ or bank12. However, at present exporters and importers are booking forwards with the
help of brokers and banks who primarily work for their own profits even at the csot of causing
losses to their clients. This is a major problem existing today. And this is where a currency
consulting firm creates an opportunity for export/import businesses to take guidance from the
experts about when and how they can hedge their currency movement. Opportunity creation
often takes time for people to adopt but it is extremey crucial for any industry to survive
international competition13.
11 Brada, J., Use of Forward Interest Rates and Forward Exchange Rates for the Valuation of
Currency-Interest Rate Derivatives. Český finanční a účetní časopis, pp.6-18, 2014
12 Butler, K.C., Currency Futures and Futures Markets. Multinational Finance: Evaluating
Opportunities, Costs, and Risks of Operations, pp.93-116, 2016
13 Pakes, A., Empirical tools and competition analysis: Past progress and current
problems. International Journal of Industrial Organization, 53, pp.241-266, 2017
Spot Rate or
Current rate
Forward
premium
Forward rate

Entrepreneurship 7
Opportunity recognition
Opportunity recognition is the process of understanding the current scenario and identifying the
existence of an opportunity in the same14. It is an important factor in entrepreneurial process. It is
a creative process and in fact entrepreneurs are more often than not characterized by their ability
to recognize opportunity15. Our business has effectivey recognized the opportunity by
understanding the needs of importers and exporters and their lack of knowledge on the subject of
currency consulting. This opportunity recognition is truly important for the success of any
business.
In the current scenario, the exchange rates offered by the bank as well as various brokers are not
live rates and due to the lack of knowledge of importers and exporters about the currency
markets, it is imperative that they work with a consultant who is an expert at currency markets.
This is also because the study of currency markets is a complicated process and requires
immense attention and knowledge. This is makes it difficult for businesses to focus on this
sector. The resources hired by the currency consultancy would include experts who have in depth
knowledge and the ability to understand the currency markets.
This opportunity recognition will eventually lead to the creation of this niche industry which
would be target al lthe importers and exporters and guide them through their trade transactions.
The lack of knowledge of importers and exporters is a major gap that the currency consultancy
business is intending to fulfill. The idea was developed after doing research about the currency
market and especially the fluctuations between MRO and its largest trading partner EURO. Upon
14 Wang, Y.L., Ellinger, A.D. and Jim Wu, Y.C., Entrepreneurial opportunity recognition: an
empirical study of R&D personnel. Management Decision, 51(2), pp.248-266, 2013
15 Guo, H., Su, Z. and Ahlstrom, D., Business model innovation: The effects of exploratory
orientation, opportunity recognition, and entrepreneurial bricolage in an emerging
economy. Asia Pacific Journal of Management, 33(2), pp.533-549, 2016.

Entrepreneurship 8
further study, it was established that there are various factors that affect the currency movements.
This analysis of the currency market can be done using technical analysis as well as fundamental
analysis16. Technical analysis includes studying charts and using mathematical formulae to gauge
the future of the currency while the fundamental analysis includes studying and tracking of
various data points like inflation numbers, unemployment numbers etc. whose release affects the
currency fluctuations.
Business idea development
The idea was developed after thorough research of the market and its existing players. In fact,
although the idea is new for Mauritania, it is being widely practiced in the US, European and
Asian nations. The plight of importers and exporters due to currency markets’ unpredictability is
not uncommon. Therefore, it called for an opportunity to open a currency consulting business.
Market research for this business idea involved listing down top importers and exporters of the
country based on their annual turnovers. A feedback would be taken from a few of these
businesses about how do they manage their currency risk currently and what are the problems
that they face most commonly. This would be done by the form of a survey and would help
analyze and understand the industry better17.
Business resources required
Resource required for the business would include office and land space, human resources,
marketing resources, financial resources, technical resources including a bloomberg or reuters
terminal and knoweldge resources.
Human resources of the business would include a staff team of 20 people to begin with.
16 Yitshaki, R. and Kropp, F., Motivations and opportunity recognition of social
entrepreneurs. Journal of Small Business Management, 54(2), pp.546-565, 2016.
17 Sarstedt, M. and Mooi, E., A concise guide to market research. The Process, 2014.

Entrepreneurship 9
Department Number of Employees
Business heads 2
Sales 7
Research 5
Marketing and PR 2
Human resource management 2
Admin 1
Accounting 1
The business would require an initial funding of 5 million MRO. This would cover the cost of
hiring employees, training, office rent, bloomberg terminal and other office expenses.
Marketing mix:
Product: The product of the marketing mix throws light on the main service offered by the firm18.
The service is currency consulting to exporters and importers. It is a knowledge based service
where the firm would be providing its expertise of the currency markets to its clients at an annual
fixed price.
18 Armstrong, G., Kotler, P., Harker, M. and Brennan, R, Marketing: an introduction, Pearson
Education, 2015.

Entrepreneurship 10
Place: Nouakchott is the location for the head office owing to the it being the largest and the
capital city. However, the clients will be targeted from across the north western region of africa.
Promotion: Television advertisements, Events and word of mouth marketing are the main forms
of promotions used by the business.
Price: There will be two pricing models. First will be a fixed price model and second will be a
variable model. The fix price model will involve the clients paying a fixed upfront fee while the
variable model will require the client to pay 60% of the fee in advance and share the profit on
every transaction further on.
Business model canvas
Key Partners Key activities Value
Proposition
Customer relations Customer
segments
Two key partners.
 Sales head
 Consulting
head
 Research
 Analysis
 Sales
 Customer
profiling
 Marketing
 After sale
service
 Customer
relationshi
p
manageme
nt
 Increased
profit
margins
 Clear
currency
knowledg
e
 Reduced
risk.
 Daily
consultatio
n
 Fortnight
visit
 Dedicated
CRM team
 Customer
success
managers
 Exporters
 Importers
 Banks
 Private
financial
institutions
with a
currency
risk
 MFIs
 Institutiona
l investors
Key Resources Channels

Entrepreneurship 11
 Financial
experts
 Bloomber
g terminal
 Research
reports
 Data
science
team
 CRM
team
 Cold
calling by
data team
 Events
 Personalize
d meetings
 References
by existing
clients
 marketing
Cost Structure Revenue Structure
Fixed cost
 Office rent
 Salaries of employees
 Bloomberg terminal
Variable Cost:
 Office utilities
 Travelling expense
 Consultancy fees paid by clients
 Variable bonuses shared on profits of clients
Value proposition
Value proposition refers to the numerous ways in which a business can create any form of value
for the clients. The value created can be tangible or intangible and this is the biggest reason why
clients associate with the firm. The value proposition fo the currency consulting business is as
below: