Michael Saltzstein Shares Strategies to Mitigate International Business Risks

Michael Saltzstein believes international businesses face financial and political risks that most domestic companies will never have to face. Organizations must consider foreign factors such as currency exchange rates, political climates and events, international trade laws and tariffs, and many other unanticipated variables before the first day of business.

Logistical Threat

When purchasing goods and materials for your overseas business, you may be concerned about the supplier's ability to provide within budget and on time. Michael Saltzstein believes diversifying your supply chain by spreading orders across multiple suppliers is one way to mitigate this risk.

Consider enhancing this strategy by using suppliers spread across multiple regions to reduce the risk of unforeseen problems, such as weather issues. It may be best for large corporations with the necessary resources and personnel to handle the detailed work and scouting. On the other hand, small businesses may benefit from a similar approach by implementing a system of fail-safe measures, such as having backup suppliers.

Regulatory Threat

In previous years, environmental regulations have become increasingly important to multinational corporations. Michael Saltzstein believes they can influence the cost of operation and expansion by putting the planet's health ahead of the bottom line.

Many countries worldwide have higher environmental standards than the United States. Respecting local environmental attitudes can help an international expansion run smoothly. However, local regulations governing the filing of documents, obtaining permits, and registering businesses can be challenging. Using the services of a local business lawyer or accountant is the most effective way to navigate red tape.

Financial Threat

The U.S. dollar was once king, trading favorably against all other currencies. However, the dollar has lost ground. As a result, if you own a U.S. company doing business in another country, the risk and expense of converting dollars to the local currency may fall on your shoulders.

Consider banking with a company with branches and a business presence in both the United States and the country where your company will be doing business. Enquire with the bank about its ability to manage ForEx trading and conversions, and ensure that you have confidence in its knowledge of the local country.