Julio M. Herrera Velutini is an experienced banking professional who has worked in the Venezuelan and Puerto Rican markets for over two decades. Moreover, Julio Herrera Velutini’s family has been in the banking industry for several generations. Businesses involving families can be effective and efficient operations, but they can also present opportunities for conflicts. However, by implementing a few guidelines, family businesses can still run smoothly. Family businesses benefit from having a formal structure such as a board, council, or forum to discuss business matters. This governance system helps to separate the management functions of the business from business ownership. Time spent working on the family business and resolving business-related problems should be clearly defined and set apart from time spent interacting as a family unit. To reduce conflict in the family business, leaders should encourage each family member to express their concerns in a constructive manner while respecting each member's right to disagree. Just as they would treat employees or peers in a non-family business, leaders should strive to take points of view seriously and listen to each team member without passing judgment.
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Following the path of his father and grandfather, Julio M. Herrera Velutini ventured into the world of banking and finance after completing his college education. The chairman of an international bank based in Puerto Rico, Julio Herrera Velutini has acquired stakes in several financial firms and made them part of the family holdings. Acquisitions occur often in the business world. Strategic acquisitions are performed to either improve synergy, grow market share, or increase operational efficiency. Synergy is created when two companies with similar products and services come together. One company can acquire another with similar product or service offerings and combine both companies’ resources to reduce operational costs and increase branch locations. Acquisitions lead to increased market share. When a company acquires another operating in a similar industry, essentially a competitor company, the buyer also acquires its existing business. That way, the acquiring company gains market share without doing the hard work involved in earning new business and at the same time eliminates competition. The final reason for strategic acquisitions is to improve operational efficiency in the overall business or in a specific segment such as supplies or marketing. For example, one company can acquire its supplier and with that, reduce its costs by the margin the supplier made, boosting supply chain efficiency. A banking professional, Julio M. Herrera Velutini is the chairman of an international online bank based in Puerto Rico. Throughout his career as a banker, Julio Herrera Velutini has recognized the importance of establishing long-term strategy for his businesses. Every business owner needs to have a strategy to work toward long-term business operations. A good starting point is the business’ value proposition. What strengths set the business apart from the competition? What added value does the business offer customers? For example, some restaurants position themselves as the healthiest alternative, while others position themselves as the most affordable. Identify your unique business proposition and build your business operation and marketing around it. Next, identify your ideal customers and solve their problems. If your restaurant’s value proposition is the fastest service time, your ideal clients could include businesspeople with little time to dine. Build your business around exemplarily solving the specific problem this customer has. Once you’ve established a loyal customer base, you want to keep them. Recognize good customers through loyalty programs, perks, discounts, or first consideration on new products. Another key consideration is the business’ revenue. What are the business’ current revenue streams? Are there other additional streams that are within reach, sustainable, and profitable? Finally, hire the right people and keep them motivated. Involve them in decision making, encourage them to innovate, and make sure they are all on the same page. Over the course of his career, Julio M. Herrera Velutini has held executive leadership positions at numerous financial firms in Venezuela. Julio Herrera Velutini draws on this experience, in addition to knowledge gained as a broker in the Caracas stock market, to serve as chairman of a Puerto Rican bank. In doing so, he carries on his family’s century-long history of success in the banking sector.
Although 9 out of 10 formally established businesses in Venezuela are family owned and operated, maintaining a family business is not an easy task. Even in stable economic climates, 70 percent of family businesses are not succeeded by the second generation. Only 10 percent of family businesses remain successful long enough to see the third. The difficulty of passing a company on to heirs may be attributed to several factors. Rivalries and feuds among family members, even when unrelated to business, can negatively affect company operations. Family members may also disagree as to how the business should be run, which can lead to power struggles. Establishing solid guidelines for the succession and administration of a family business can help to anticipate such issues and solve them when they arise. |
AuthorMr. Velutini has experience with both established banks and young banks. S Archives
December 2017
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