Any new project faces all kinds of risk . The risk range from those can be identified in advance and often can be controlled and those that cannot be. For example, a risk of earthquake on your property can be classified as a risk that cannot be predicted in advance (unless the region had a history of earthquake ) . Similar to this are floods, fires, wars etc. It is very difficult for a project to plan for these calamities. The good point is that these risks occur rarely and you can insure against them.
The risks that face a project are much likelier and difficult to manage. A few of them are as follows
- Lack of customer interest in your product .
- Risk of being either too ahead of time or too late
- Competition responds by moving faster than you expected
- Unable to get talented people work for you
- You run out of money due to unplanned expenses
As owner of your business , you have more knowledge than me in your business area. You know what works for you and what doesn’t . However many risks are common for most businesses. Some of them you already know. Some of them are unknown
The worst thing to do is however not to do risk planning. Without a good risk plan you might get into trouble later on. It is very easy to create a risk plan. Just create a excel sheet
- In the first column: Put an identifier for the line
- In second column, put your project phase such as starting , manufacturing, go –live etc.
- In third column, add the kind of risk you foresee
- In fourth column add the probability of that risk occurring. Take values as high, medium and low.
- In the fifth column , add the impact your business will have if the risk in column two occurs. Call it high, medium or low
- In the sixth column add the steps that you will take to prevent the risk from happening
- In the last column, add the steps that you will take , if risk actually took place
Here are a few more important things regarding the risk planning
- Create the risk management sheet at the start of venture
- The document is a live document, keep it updated
- Add risk from all dimensions of your venture
- Write the risk down however small the it is
- Learn lessons from the time you managed a risk. Document it
- Sort risks by priority and impact. The risk with high likelihood of occurrence and high impact should be the topmost on your agenda
- Get external entity to review the risk sheet
- Make your employee ( s ) aware of the risks and save yourself some headache