Risk comes in all shapes and sizes, and depending on the industry, it can have very different effects. Many companies look at both optimistic and worst-case scenarios to identify and help monitor business risks. When assessing a potential market, you should be aware of standard risks, including political, financial, social, legal, environmental, supply chain, and cyber. Given the extent of Canada’s Ukraine-related sanctions against individuals and entities involved in the Russian-Ukrainian conflict, knowing your client and having confidence in your decision to partner with or work in alongside other organizations.
Exporters need to have a solid risk management strategy in their toolbox, Tobman says. “Companies should also consider the implications if this conflict persists, including diversifying their suppliers.”
During the discovery process, it is wise to capture information in the form of a “risk register” to track potential risks in a market. Large companies use sophisticated algorithms to perform the risk analysis, but smaller scale companies can do much the same thing, using an Excel spreadsheet. To break it down:
- Identify the risk
- Determine the probability of this happening
- Assess your exposure and potential consequences
- Develop an action plan in response
Businesses need to stay on top of each market and regularly reassess the various risks and plan accordingly.