Your research into each overseas market, along with the opportunities, should also include careful assessment of the risks associated with doing business there.
As a product or service exporter, the main risks that you may face in overseas markets are:
- political risk- how stable is the market politically, economically and socially?
- legal and regulatory risk- what difficulties might arise from dealing with different legal and regulatory systems?
- business risk- will you have to deal with different business and cultural practices that could cause misunderstandings or delays?
- exchange rate risk- how will adverse movements in exchange rates impact your profits?
- payment risk- what is the likelihood of your suppliers or customers defaulting or becoming insolvent?
- intellectual property risk- how can you protect your designs or technology so it’s not stolen by an overseas competitor?
- damage or loss of goods before payment- can you protect your products from loss or damage when being delivered by road, rail, sea or air?