Risk comes in all shapes and sizes and, depending on the industry, it can have vastly different effects. Many companies look at best-case and worst-case scenarios to identify and help monitor business risk. When evaluating any potential market, you should be aware of standard risks, including political, financial, social, legal, environmental, supply chain and cyber. Given the sheer breadth of Canadian sanctions related to Ukraine on individual and entities involved in the Russia-Ukraine conflict, it’s paramount to know your customer and to have confidence in your decision to partner or work alongside other organizations.
Exporters need to have a solid risk management strategy in their toolbox, says Tobman. “Companies should also consider the implications should this conflict persist, including diversifying their suppliers.”
During the discovery process, it’s wise to capture the information in the form of a “risk register” to track potential risks in a market. Large corporations use sophisticated algorithms in performing risk analysis, but companies on a smaller scale can do virtually the same thing, using an Excel spreadsheet. To break it down:
- Identify the risk
- Determine the likelihood of it happening
- Evaluate your exposure and the potential consequences
- Develop an action plan in response
Companies need to keep on top of each market and routinely re-evaluate the various risks and plan accordingly.
