dollar will buy you 80 Japanese yen, and of course it follows that it will take 80 Japanese yen to purchase 1 U.S. dollar to Japanese yen exchange rate is 80, then 1 U.S. Simply put, the exchange rate between two currencies is the rate at which one currency can be exchanged for the other. For example, if the U.S. Let’s take a look at how the foreign exchange markets work, their effects on business owners, and some strategies for coping with fluctuations in the exchange rates that affect your business. With all of these things to worry about in today’s global environment for small-business owners, many may not have had the time to fully understand how foreign currency exchange rates, which are a truly global phenomenon touching all international transactions, affect your business. While globalization has provided entrepreneurs with a host of benefits, including an expanded marketplace into which to sell their products and the opportunity to comparison shop for goods from around the world, it has also presented a host of new challenges. If your business is attempting to sell to a global customer base, you are no doubt familiar with the trials of understanding the idiosyncrasies of different markets and cultures, in addition to the sometimes-daunting task of attempting to communicate in a foreign language. Once upon a time, most small businesses were essentially local businesses, producing goods and services for, and acquiring supplies from, a network of customers and vendors that were located close to home, usually in the same city or state, and always in the same country. As the world becomes increasingly interconnected through the forces of globalization and the march of technology, the role of the small business owner has changed dramatically.
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