Risk Analysis

It is important to take an objective view of the business and identify barriers that might prevent success. Potential investors will expect business owners to be aware of what might go wrong and to have plans to avoid or respond to those issues.

Whilst it might sound counter-intuitive to pick holes in your business plan, the key factor is the way that the business plans to monitor for the potential risk, and what it will do to minimise the impact. Plan for the worst, hope for the best.

A good risk analysis will identify the likelihood of these issues occurring, evaluate the potential impact (how serious that issue would be should it occur) and then propose mitigation measures that may be implemented in advance, or in response to the issue arising.

Risks will range from technology failures, loss of key staff, competitor activities, errors in operational assumptions, obsolescence of key components, problems in the manufacture and supply chain etc.