How Do You Minimize the Financial Risk of Doing Business Overseas?

Novice international businesspeople will inevitably learn some lessons the hard way. But there are techniques that can help reduce the risks:

Do plenty of homework. You should learn your target country´s credit and accounting practices, cultural nuances and export restrictions.

Treat all suppliers the same

. Take the same disciplined approach to bargaining with foreign merchants as you do with domestic suppliers. Resist goods you don´t want and keep from being overcharged for items you like. Deal in goods within your own specialty and know your bottom line — the highest amount you can afford to pay and the lowest price you can reasonably accept.

Hire a freight forwarder. Using a freight forwarder to handle packing and customs-clearing paperwork will reduce shipping costs.

Purchase insurance. Generally speaking, the importer and purchaser takes legal possession of the goods when they leave the factory, whether or not they actually arrive. Most small importers/exporters buy "all risk" insurance, and many smaller dealers buy insurance from the freight forwarders or shippers.