Critical Risks, Problems and Assumptions

CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS

This section, although small, can make or break your proposed plan and eventually the business.

Most readers of this plan will look at the "Team" first and this section second. If you don't cover these areas the reader may think you consider them to be naive or stupid, that you can fool them, you are not aware of the assumptions or the potential risks and problems you may encounter. Identify all you can. During the development of each section look for risks, problems and the things that you are assuming will happen. Write them down.

Risks
All business ventures have risks. Not all business managers or developers are aware of the risks. Many that are aware of the potential risks do not plan for them. Don't get caught. Write them down.

Problems
Don't dwell on problems. Write the potential problems down and discuss the impact on the business. Plans to avoid or correct the situation will help your presentation and future decisions regarding the business.

Some problems you may encounter:

Out of cash before orders secured
Competition price cutting
Costs in excess of estimates
Unmet schedule(s)
Difficulties with credit

Lots of orders and NO cash
Unfavorable industry trends
Sales projections not achieved
Long lead times in procurement
Unexpected development costs

Assumptions
Make a list of items that you are assuming will happen or must happen. Put down the details of each one. Describe what will happen if they do not happen. Describe how you will overcome the situation when the assumptions do not materialize.

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