What follows is an extract from the newsletter produced by Ray Stannard at International Trade Financial Solutions – one of our professional members. Ray specializes in helping SMEs minimize their trading risks overseas. http://www.inttradefinsolns.co.uk
“Whenever you trade overseas – be it buying or selling – or even, if you’re one of the growing number who trade purely within the UK but do not use Sterling as a settlement currency, don’t overlook the need for a suitable foreign exchange strategy as part of your overall plan. Many businesses were caught out at the end of last year when the Pound went into freefall against the US Dollar and euro. Those importing found that their profit margin was eliminated, and more, in some cases by the rate movements.
As a result, many small businesses failed – and this without all of the other issues that are currently around. Being aware of the risks and knowing what options are available to you before you sign deals will help you overcome many of these problems and allow you to crystallise your profit margin, either in whole or part. There’s no one, simple formula; every business will have slightly differing issues to address, but, if you are uncertain of your choices, then seek outside help sooner, rather than later.”