“This nation was built by men & women who took risks—Pioneers who were not afraid of the wilderness, Businessmen who were not afraid of failure, Scientists who were not afraid of the truth, thinkers who were not afraid of progress, dreamers who were not afraid of action”
Risky Topics: 12 main Risks, 5 Steps to Treat, Reduce or Eliminate Risks: ID, Analyze, Prioritize, Action Plan, Monitor, Avoid, Reduce, Share, Accept.
from LaunchoPedia 11/19
A: Identifying the Risks
Starting a scalable company is a daunting task. This will challenge even the most experienced Management Team. The team’s success requires a complete understanding of the Risks it faces in its quest to succeed. Following is a list of __ startup risks the founders should consider as they endeavor on their Entrepreneurial journey:
#1 Research Risk
. . . that the quality of the initial research upon which key company assumptions were based was flawed in a significantly impactful way.
#2 Design Risk
The risk that the product or service design does not meet the required performance standard that would be acceptable to the typical Customer.
#3 Development Risk
that development of the product or service is not completed on time, within budget or to defined specifications.
#4 Technology Risk
The risk that less than optimal technology is developed or utilized or that a competitor leapfrogs the startup’s technology.
#5 Customer Feedback Risk
that the product or service is so far from the Customer’s wants & need that there is too small or no market.
#6 Low Demand Risk
The risk that the actual market’s demand for the product or service will not yield the projected Sales volumes ezpected.
#7 Management Risk
that the Management Team lacks the skill-sets and experience to meet the Goals & Vision.
#8 Funding Risk
that Funding will not be available at a level or timing required for the startup to succeed.
#9 Capability Risk
The risk that the startup is unable to scale its “capability” on a timely basis – to levels desired, because of financing or other factors.
#10 Operations Risk
The risk that operating costs are greater than budgeted, or that the service cannot be provided at the projected costs.
#11 Life Risk
that the product or services useful life in the marketplace is shorter than originally anticipated or projected- which has a (-) impact on Customers.
#12 Economic Risk
The risk that the company’s success is very sensitive to external Economic factors.
Conclusion: By considering the startup risks they may encounter, the founders will be better able to identify which may have the highest likelihood of a negative impact and consider mitigating factors to address those which threaten the startup’s development & growth.
B: Steps to Reduce or Eliminate Risks
from Quantum4biz 11/19
Risk Management is the identification, assessment, and prioritization of Risks – followed up by minimizing, monitoring & controlling the impact of Risks. Here are five steps to take in first assess the risk and best solution.
#1 Identify the Risk
Risks include any events that cause problems or benefits. Risk Identification begins with the sources of internal problems & benefits or those of competitors. Risks can be internal or external.
#2 Analyze the Risk
Thoroughly analyze the potential effects that each Risk will have on Customer behavior & your company.
#3 Prioritize the Risk
Now you can assign a “magnitude” to the likelihood of each risk’s outcomes. Magnitude is a combination of the Risk “likelihood” & “consequence”. This will help you determine how severely a Risk threatens your operations or products. Determine the magnitude that each Risk potentially carries to destroy or support your operations.
#4 Action Plan
Since you have identified & prioritized all possible risks + their severity, you can begin to treat the worst risks first. You’ll first want to look at the ways you can reduce the probability of a negative risk. At this stage of risk assessment, preventative & contingency strategies should be prepared so that there are no surprises as your move forward with an Action Plan.
#5 Monitor the Action Plan
Monitor the risks by tracking involved variables and proposed possible threats to chain reactions. As your tracking system identifies changes, try to contain the risk, then treat the rising risk to avoid widespread ripple effects & the triggering of a big risk.
This brings us to the next important wave of risk management: treating the risk. There are several ways to treat risk, and they all depend on what type of risks are being treated and how serious those risk’s repercussions or opportunities are. Let’s take a look at the techniques.
C. Best Strategies for “treating” the Risk:
Best case scenario, you can “avoid” risk repercussion altogether. But in forfeiting all activity that carries risk, you also forfeit all associated potential opportunities. It is up to you what type of risk activity you want to accept.
Risk reduction implements small changes to reduce the magnitude of risks. The reduction will require some process changes, but it will save your company from a severe loss in the case of a high-risk manifestation.
Risk sharing or transferring the burden of loss or gain over multiple parties (ie, Partners, Customers or cover by Insurance).
Risk Acceptance involves assuming the loss or gain, entirely. This option is best for small risks where the losses can be easily absorbed & recovered.
Comments: Do you have any ideas of how to manage Risk, so that they are reduced, acceptable or eliminated.
Complete Post enhanced by Peter/CXO Wiz4.biz
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