If you told someone 20 years ago what you saw coming, they would probably have thought you were arrogant or crazy. But now we are here in volatile times with a currency that is being beaten slowly to death. People somehow forget that a country’s exchange rate is one of the most important indicators of its economic health.
Have you ever been to one of those bar parties where someone has a tab running. The party goes on. The drinking continues like there is no tomorrow. After midnight the revellers in a drunken stupor leave, escaping any contribution to what they’ve readily drunk. If you are still there at the end of the evening you will see someone there making hasty phone calls or haggling after midnight desperate for someone else to pick up the tab.
It’s economic survival now. As a small business owner or someone thinking of starting out something not because you want to but because you are forced to, it’s time to take stock. You are going to have to do what you must do.
It’s interesting how all the philosophical and ideological claptrap disappears when economic survival is at stake. When you need to keep a roof over your head and feed your children. No one is going to help you. You have to help yourself.
You can’t hide from a weak currency. You can run, of course, but you’re going to impoverish yourself in the short and medium term until you find your feet somewhere else where the national currency is strong. If you are owning and running a small business, all you can do is look for every way possible to minimise yourself against weak currency risk.
One of the main causes of small business failure is failure to anticipate or react to competition, technology or changes in the marketplace. A currency shock that we have seen is not an isolated event but is an important danger signal of more trouble coming our way.
Now is the time to take stock. Right now no matter how difficult it is to think about what to do, you’ve got to do so. You need to examine your business and review the way things have been run. You need to be open to new ideas, new approaches, new concepts, new ways of thinking. This is when you need to ask yourself, “what might I do differently?”
If you are not exporting, you need to think about what you could do to sell to other countries where exchange rates are high. If you can make something cheaper and better, then there is a good chance that someone else in the world may want to buy it. It might not be necessarily be a physical product that you have to ship but also skills, coaching, training and education. For example, I heard of someone offering a wildlife training course online at a price that is staggering.
Yes, lower prices can help your small business break into new markets and expand your customer base but you have to “start small and start smart”. Start with a single product or service and a single country and then expand from there once you have picked up experience in international trade. But be careful of contracts in other countries. You need provisions that deal with exchange rates and currency conversions in your conditions of sale.
It may also be profitable to look at your business, identify what you are importing and see how you could substitute locally. In some cases you won’t be able to do this. But in others you may be able to source local suppliers or substitute products that work just as well as the imported ones. Just make sure that whatever you do will be acceptable to your customers.
Remember that the local small business, the local operator, has the advantage over the international business when it comes to price competition. Not in all cases but you need to look for the gap, the opportunities. Small and medium-size businesses are recognising this with highly-qualified expertise banding together and providing services at prices that can’t be matched from abroad. At times you just have to buy the expertise from other countries because you may not have it locally but the point here is to seek substitutes.
Keep looking. Search for the opportunities in this currency crisis. Look for the opportunity and you may well find it.