Even Stuntmen wear Helmets :[/b]
We have talked about Risk , and the type of people who indulge in it or shy away from it in the previous installments. Now in this one , let us talk about certain safety measures you can take ; just in case you end up falling down.
The best method is to distribute the magnitude of the Risk. It can be achieved by means of a coalition , partnership ,alliance or joint venture.
Another method is of Insurance. Every individual who holds a policy , pays a meager amount , so that in case of a disaster he maybe reimbursed. But it is advisable only if the insurer can forecast the number of times – disaster could strike & the scale of the same ; with some precision.
Start-ups are generally considered too fickle for Insurance Agents. In this scenario it is more apt to go for Venture capital providers ; who in turn for their investment look for equity in the company-to-be. Similarly if someone is experimenting with a revolutionary but potentially abrupt core-product ; it would be advisable to seek joint ventures and global tie-ups.
Before globalization ; countries ate what they grew on their soil mostly. But after its onset , International trade prospered in Leaps and bounds. The stakes are high in this but so are the subsequent returns. If you seek Insurance for this sector ; look out if it covers – sudden upheavals , insurrection , skirmishes , and terrorism. A concept called Currency swap is in place at some banks – fixing the price of a host currency to a foreign currency at the time of signing. But kicking yourself if the currency rises manifold in the next month is a side effect.
Then we look at Future’s contract (Hedging). In this the company enters into an agreement with the suppliers –fixing the price beforehand ; to reduce seasonal and other fluctuations. This is of the essence in the case of Food and beverage industry – where supply chain is at the helm of things.