In some ways, your business is like a bystander a superhero story. You’re there, happily running your business, and something unknown from somewhere unknown comes flying through the window, and there goes your day. In the real world, these unknowns called political risks, can make you lose customers and cause sales to drop, which you don’t want. Here are some ideas about what to do to be your business’s own superhero and shine even when times get tough elsewhere.
Canada’s a peaceful country, so what kinds of things happening elsewhere could take a bite out of your sales? Here’s a very simple example: Say you sell specialty chocolates and your customers come to you specifically because of your high quality and great prices. Suddenly, there’s political unrest in the country where your preferred chocolate manufacturer buys their cocoa beans. The unrest makes the beans impossible to get, which means your manufacturer can’t produce some of the popular chocolates your customers love. Once you’re out of stock, your customers may shop elsewhere. So even though you’re on the other side of the world and you don’t even make the chocolates yourself, you’ve been exposed to political risk. Hacking of your business’s computer systems is another example of a political risk, because again, you’re dealing with an outside unknown force causing damage to your business.
So how do you keep your business safe? Planning is the best protection from political risk. What you might want to do as a first step is sit down with your management team and find places in your operations that make your business vulnerable. You might consider hiring a risk management consultant who specializes in helping businesses lower their political risk. You can also work with a political risk insurance specialist to get the right insurance products to cover your business in case of loses.
Political risk is a unique type of risk that’s challenging but possible to protect against. While there’s no surefire way to guard your business completely, risk management plans can reduce the overall effects of political risk on your operations.