Working internationally inevitably involves a degree of risk that you wouldn’t normally have to deal with in your day-to-day operations. International business is logistically and financially more complicated, so you’ll have to deal with unfamiliar regulatory frameworks, and you may face complex security issues – all within a cultural framework that you may not fully understand. Therefore, employing the right approach to risk management from the outset can save you a lot of trouble.
When you’re operating overseas, you’re likely to have more trouble identifying suppliers, distributors and contractors to handle those aspects of your work that you can’t take care of in-house. You’ll also be less able to step in to deal quickly with developing events. As a consequence, you’ll need to plan more carefully from the outset in order to be able to manage disruption. Make sure that you have at leas one backup available in each case, even if that requires a greater initial investment of money and time, and check regularly to ensure that your records are up to date.
When you’re dealing with foreign companies, you’ll have to deal with currency exchange rates, which can lead to serious losses if they move in a direction you don’t expect. Using forex is a simple way to hedge against this so that an exchange set for a specific data will, in effect, only cost you what it does today (plus your forex fees). Using a multicurrency bank account and making transfers only when the rate is favourable makes small-scale or urgent payments easier to manage. You’ll still need to be able to react quickly when it comes to setting prices for overseas sales, however.
To succeed in business internationally, you’ll need to get to know all the regulations pertaining to your sector in depth and keep track of changes. For example, if you want to engage with a Chinese CRO, you’ll need to learn how the NMPA operates, follow its announcements and monitor political discussions that indicate what changes the government may plan to introduce down the line. Bringing in a local business lawyer will help a great deal with this. Look for one who has worked with foreign companies before and has good references.
When you’re moving sensitive materials around internationally, you’ll always need to take extra security measures, but it’s important to recognise that there can also be risks to your intellectual property if the other jurisdiction(s) where you’re operating don’t offer the level of copyright protection that you’re used to. Additionally, you’ll have to think about how to protect your employees if they are working in areas where, for instance, conflict is an issue. Work with local consultancies to identify the best ways forward.
Being alert to the risks involved in international business means that even when strategising fails, you’ll be able to react more quickly and effectively. It’s good planning and awareness of cultural differences, however, that will make the biggest contribution to reducing your business risks.