What could go wrong with the plan.
WHAT TO IDENTIFY
Risks that would end the business Risks that would hurt it Risks that are merely inconvenient
WHY THE DISTINCTION
Attention belongs on the first category.
WHAT COMMON EXISTENTIAL RISKS ARE
Losing a customer who represents most of revenue Running out of cash Losing the founder or a key person Losing a licence or approval A serious safety or quality failure A supplier failing
WHAT TO ASSESS FOR EACH
How likely How severe What warning you would have What you would do
WHY THE WARNING QUESTION
It determines whether you can act in time.
WHAT TO ESTABLISH
Indicators that would warn you.
WHAT EXAMPLES LOOK LIKE
A major customer reducing orders Cash falling below a threshold Key staff being approached Quality measures drifting
WHAT TO DO ABOUT THE LARGEST RISKS
Reduce them, deliberately.
HOW
Diversify customers Build reserves Document what one person holds Maintain alternative suppliers Insure what can be insured
WHY DOCUMENTING MATTERS
A business that depends on one person's knowledge cannot survive their absence.
WHAT TO PREPARE
A plan for each significant risk.
HOW DETAILED
Enough to act without deciding everything at the time.
WHAT TO REVIEW
The risk list, annually and after anything significant.
WHAT TO AVOID
Listing risks and doing nothing about them.
