“I have learned that nothing is certain except for the need to have strong risk management, a lot of cash, the willingness to invest even when the future is unclear, and great people.” – Jeffrey R Immelt
If you are at the stage of startup risk management planning, the assumption is that you have completed following steps:-
- Startup Idea – You have an amazing startup concept
- Startup Idea Evaluation – You have already evaluated your startup concept on all the verticals
- Work Breakdown Structure – You know what work packages need to be done to execute the idea
- Cost Estimation – You already know the total expenditure that you are going to make on your startup
- Startup Time Frame – You have already decided a time frame for your startup
- Startup Team – You have selected a perfect team for your startup
The combination of above work packages will give the major risk areas while executing your startup. Lets again stuck with our previous example of e-commerce website.
So the major work areas of your eCommerce startup are:-
- Website Design
- Product Management
- Supply Chain Management
- Execution and Control
The detailed work breakdown structure gives you all the activities required for above mentioned work packages. So here is the tips for risk management planning:-
Based on the work scope of each activity, decide the rating/availability/feasibility of required resources: cost, time, quality, human resources, communication, procurement etc.
Decide a rating scale for each resource and give as much accurate rating as possible to each activity.
The individual result and cumulative rating would give you the required areas of more attention.
Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of these four major categories:-
- Avoidance (eliminate, withdraw from or not become involved)
- Reduction (optimize – mitigate)
- Sharing (transfer – outsource or insure)
- Retention (accept and budget)
Hence you can ensure the success of your startup at planning phase itself. Though the clear picture of each risk will come once you are running in actual field, but to know your limitations at starting phase is better as mitigation plans could be developed easily.
Wish you luck for your Startup.
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