INDUSTRY ADVICE What you need to consider to protect your business By Judi Smith, Business Development, Aon Risk Services, Aon
Taking the risk out of international trade
Recent trade developments present great opportunities for Canadian agricultural equipment manufacturers to increase exports to both new and existing markets. However, with any new business venture there are risks that need to be considered in order to protect your growing business. Are you aware of regulations in various countries that may impact your business? Are your employees protected? What about privacy rules? Managing your risk requires being prepared and being aware. What follows are potential areas of risk you should consider and be prepared for when you do business outside of Canada.
➢ 1. Cash Flow One of the first conversations we have with our clients is about payment. Do you know how you are going to be paid? Regardless of where your customer is located, you need to be sure you will get paid. Some companies are able to secure instalments, so that by the time their goods are delivered, they have been paid in full. However, for those companies that cannot operate that way, trade credit coverage is used to ensure they will get paid for their work. There are a variety of options available that help companies improve their cash flow and avoid debt loss, and many AMC members use our trade credit team to help them secure the best terms possible. What’s important is to have flexibility and plans in place in case of sudden or unexpected changes in the market. Such changes could impact your customers and suppliers, thereby directly impacting your business. Having best practices in place can help you to improve your cash flow and avoid bad debts.
➢ 2. Supply Chain A common issue we hear about from AMC members is faulty workmanship and inconsistent quality of materials. Supply chain due diligence is a key step in mitigating risk associated with quality. For instance, we have seen situations where manufacturers use foreign steel and have had issues with metallurgical testing. This resulted in 10
Implement Success | Fall-Winter 2018
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