Speed up your business with these expert tips on "Risk Mapping". Analyse and discover this TIP!
Identified risks that may affect our new business need to be measured in terms of estimated impact and probability of occurrence.
LIKELIHOOD SCALE OF EACH IDENTIFIED RISK (WE CAN USE % OR QUANTIFY THEM):
- Unlikely: Risk is unlikely to occur on the horizon to achieve the objective.
- Likely: The risk is likely to occur.
- Imminent: The risk is expected to occur.
IN RELATION TO THE SCALE OF IMPACT, WE COULD START WITH THIS PROPOSAL:
- Negligible: The risk will not significantly affect the achievement of the objectives and therefore no significant loss or damage will occur.
- Moderate: The risk will result in some elements of the objectives being delayed or not achieved, causing damage to the company.
- Critical: Risk will cause failure to meet objectives, resulting in significant loss or damage
With the risks identified and assessed in terms of impact and likelihood, you should build the risk map that allows you to locate and prioritise all risks.
Once you have mapped your risks, you need to analyse in which quadrants you are located in order to know what measures to take. Be careful, because this depends on your risk tolerance level. risk aversion.
If you are very risk averse, you will try to avoid even likely risks of moderate impact. However, if you are willing to take risks (and a Startup is at this point, by definition), you will try to avoid only critical and imminent risks. Therefore, I propose the following:
For a StartupIn my opinion, only imminent and critical risks should be avoided, although this depends on each management team. The above map seems to me to be sufficiently serious and prudent and, at the same time, in line with the natural environment of uncertainty in which a start-up operates.
On this basis, measures can begin to be defined to manage the hazards and, with appropriate monitoring, determine the impact of the risks and the residual likelihood remaining with the proposed measures to be taken.
You see the importance not only of validating the business model, but also of assessing the risks inherent in the model itself. Often we leave by the wayside the impact of competition, the impact of regulation, fiscal aspects, etc...
These may have a critical impact on the business (or not) and may be very likely in terms of occurrence (or not). To find out, let's follow a method, not rely on intuition or recklessness. This will give your start-up company a stronger profile in the eyes of investors and the market.
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