If you have considered dipping a toe into importing or exporting, you may have balked at keeping up with the fluctuations in value of various currencies. Don't even try, says Guido Schulz, global head of strategic management at Los Angeles-based AFEX, a foreign-exchange consultancy.
Large international conglomerates have entire “forex” teams dedicated to managing finances across multiple currencies. As a small-business owner, you should not be trying to keep up with the second-by-second changes on your own, says Schulz. But if you don’t take steps to protect yourself, you could lose money, he says.
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Consider a wine merchant who buys wines from France and sells to grocers and restaurants in the U.S. If the value of the euro changes dramatically between the time the merchant orders and when he sells, his profits could be wiped out in the currency conversion.
To protect against such losses, entrepreneurs are increasingly planning out their currency strategies. Since the start of the Eurozone-crisis three years ago, AFEX has seen more than a 25 percent increase in the volume of customers looking to lock in currency rates in advance. Small and midsize businesses make up most of its customers.
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