22/02/2011
FOUR KEY STEPS:
1. Think – identify the risks in advance that could affect you.
2. Assess – quantify each risk.
3. Develop worst case forecast & strategies for dealing with it.
4. Monitor & React – keep constant watch for expected or unexpected occurrences and react immediately.
Some Risks To Consider:
1. Industry: What are your competitors dreaming up?
2. Market. How is it changing? How will this affect your sales?
3. Your product. Watch out for quality problems, cost overruns, declining demand.
4. Sales. Poor sales cut profits: high sales squeeze capacity.
5. Quality assurance. Poor quality costs money at the production line.
6. Quality control. Poor quality control damages your reputation and your sales.
7. Resource constraints. Watch for lack or excess of skills, facilities, materials etc..
8. Productivity. Poor productivity pushes up costs.
9. Capacity. Excess (idle) capacity costs money. Capacity constraints cost sales
10. Inventory. Not enough kills sales. Too much drains cash flow.
11. Administrative blockages. The sheer volume of order – or cheque – processing can bring an unprepared business to its knees.
12. Business Management. Poor management hurts morale and profits. Failure to notice external threats can leave you holding a bankruptcy notice.
13. Cash flow. Not enough kills. Too much, poorly deployed, reduces return on investment.