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Saturday, May 21, 2022

Assessing Business Risk

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As business managers and entrepreneurs we can have much greater control over our outcomes if we properly assess risk.  In a recent read of Keith Cunningham’s The Road Less Stupid he suggests the following:
Risks are the following:
  1. Something that was not predicted to happen happening

  2. Something that was predicted to happen not happening

All Risks have 3 moving parts

  1. The probability of the risk occurring

  2. The cost if it does occur

  3. The manageability of controllability of the risk identified

Note – When you think about what could go wrong you dramatically increase the odds of creating something that will go right.

Here is how to set up your business risk analysis
Then plot the data on a Bubble Chart

Once you have plotted the top 10 business risks and visualize them it will change the way you think about them.  Now your mission is to:

  1. Shrink each circle by finding ways to reduce the probability
  2. Move each down the vertical axis by thinking of ways to mitigate cost should the risk come about
  3. Move each circle toward the left by thinking about ways to control or manage the occurrence of the particular risk
Download your free template of the Business Risk Assessment Template below:

Download Risk Assessment

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