Peter DaSilva for The New York Times Jean-Paul Tennant of Geographic Expeditions said foreign-currency fluctuations “can totally kill a company like ours.’’
Today’s Question
What small-business owners think.
Jean-Paul Tennant is chief executive of a travel company, Geographic Expeditions, that specializes in arranging ambitious trips to exotic lands. In late 2006 — as explained in our just-published small-business guide to handling foreign-currency exposure — Mr. Tennant booked travel for eight clients who wanted to explore northern India.
And then the rupee began a double-digit climb against the dollar, which prompted one Indian supplier who had already agreed to fees for hotel rooms, guides and drivers to say he needed to raise his prices. Suddenly a trip costing Geographic Expeditions $7,500 per person was going to jump to $9,000. “As soon as we commit to a price, we are heavily exposed if we don’t know what our costs will be,’’ Mr. Tennant said. “It can totally kill a company like ours.’’ Mr. Tennant quickly canceled the contract and found another supplier that agreed to a firm quote.
And then he looked for some better ways to handle currency risk. Please read the guide and tell us whether your company faces similar exposure and how you have learned to mitigate it.
Article source: http://boss.blogs.nytimes.com/2013/04/17/does-your-business-face-foreign-currency-exposure/?partner=rss&emc=rss
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