At Start Co. we advise companies to think through risk before they launch and several times each year throughout the lifetime of the business. This ranges from covering specific threats through competitive analysis and planning how to mitigate risks that could be fatal to the business or put the business on the decline.
Identify and Organize Risks
The article, “The Startup Entrepreneur’s Guide to Risk Management,” posted by Business Insider by Nicholas Carlson does a great job outlining categories of risks — nuisance risks, ignorable risks, insurable risks, and the company killers. Follow their advice to organize your company killers into a table that displays clearly what you are up against and what specifically you’re going to do about it. Creating this table will help your business think through the following:
- Risk Factor
- What type of risk is it?
- Likelihood of the risk occurring
- The consequences of the risk occurring
- What are your mitigation tactics?
- What is it going to cost you to mitigate? Time, money, resources, opportunity…
- What is the current status of the situation
Critical risks can come from a variety of areas that include: market, financial, technology and operational, competition, people, legal and regulatory, and systemic risk. For many businesses, their critical risks from multiple areas have shown up at the same time due to the COVID-19 pandemic. Now and for the future of your business, it’s imperative that you prioritize your critical risks. The obvious need today cannot blind side us to what is coming down the road. Creating this framework can help your business see the bigger picture.
Embrace Adaptability
Labeling and organizing risks to your business will help you in mitigating them as you are clear on what you are up against and what may be cause for concern. This is the first step in the journey of adapting and reinventing your business to meet these challenges. In today’s world, no business is mature and certain; all businesses are startups. The sooner we realize that, the better we can be. Everyday is a day of solving complex problems, so let’s start by bringing some structure and support to this challenge.
Are you looking to grow your business? Our Sprint Program application is open until February 23rd. Learn more here: https://www.neverstop.cocovid-19-sprint-program/