How entrepreneurs can take stock of their business risk

6. SUPPLY RISKS
WHAT IF…
• Suppliers are powerful enough (e.g.: monopolies) to extort upstream
• There is a shortage of the supply of raw material, either because of natural
disaster (like drought), a man made disaster (like war), or because a competitor
(or some other market player) buys it all out first
• The cost of your raw material fluctuate
• You are exposed to currency risk across borders? What about policy risk such as
tariffs
• There is risk of raw material spoilage between when you buy it and when you
use it
• Your access to raw material does not scale with projected revenue/units sold
• Your demand forecasts are way off (in time or scale)
• You can’t control the quality of raw materials
• There is industry consolidation that affects your suppliers
• Your suppliers go bankrupt

7. PRODUCTION RISKS
WHAT IF…
• Your manufacturing process outputs poor quality
• Your partner does not meet contractual expectations
• You cannot scale in line with units sold
• It takes longer than expected to produce
• You cannot protect your IP, especially when a partner is collaborating
• Your plant fails (natural disaster)
• Your employees strike

8. LOGISTICS RISKS
WHAT IF…
• Your goods are spoiled, damaged, stolen, destroyed, or lost in transport
• You suffer from import/export, or other, delays
• You experience delays and long holding costs
• Your partner goes bankrupt or has worker issues
• There is consolidation in the logistics chain (mergers/acquisitions)
• The cost of logistics such as duties, shipping costs, or trade financing goes up
• You receive compliance fines
• Your product platform is not extensible (or requires full rewrite in Version 2)

9. DISTRIBUTION RISKS
WHAT IF…
• Sales take longer (or is more expensive) than expected
• You can’t actually sign distributors
• You get into exclusive partnerships that don’t deliver
• Distributor (or their agents) decides to push another product over yours (not just
competitive) because it makes them better margins or is easier to sell
• Your distribution partners squeeze margins
• Retail/Distribution channels are locked-in by competitor or for other reasons
• You can’t close key customers in a concentrated market (few, but big, customers)

10. MARKET RISKS
WHAT IF….
• Customers don’t actually buy your product (perhaps because of need-feature
misfit or they just prefer status quo)
• Segment does not materialize (you were wrong when you identified a segment of
customers with shared needs)
• Market share falls short
• Competitors or substitutes block you (by distributor/retailer or customer lock-in) or
there are other barriers to entry you cannot bypass
• Competitors launch a FUD (Fear, Uncertainty, and Doubt) campaign
• You just get beat by competitors or substitutes
• You get the pricing wrong (impact to your margin)
• Cost of advertising is higher than expected
• Marketing associated costs (such as retail rental) go up dramatically
• Your internal infrastructure (IT) fails

11. AFTER SALES RISKS
WHAT IF…
• Your product has bugs
• Your support organization cannot handle scale or scope of complaints
• You receive a lot of returns
• Angry customers complain on social media or in the press
• Customers don’t re-purchase

12. FINANCIAL RISKS
WHAT IF….
• Your customers do not pay on-time (or at all)
• Your debtors call on you when you don’t have funds to pay
• Revenue or cost projections are off
• You fail to calculate tax properly
• Your internal accounts go awry because your accountant #epicfails
• You suffer from changing exchange or interest rates

13. PEPOLE RISKS
WHAT IF…
• Your project management fails (delays or quality issues)
• There is key-man risk or heavy attrition
• You cannot get the required supply of specialized talent

14. PEST RISKS
WHAT IF…
• There are changes to political climate or release of new legislation / standards
• There are macro-economic slumps / depressions
• There are wars, terrorism, epidemics, etc
• Technology advances unexpectedly away from your solution

18. SEVERITY OF IMPACT
LIKELIHOODOFIMPACT
HIGH
LOW HIGH
HAVE A CONCRETE PLAN
AND MITIGATE ACTIVELY
RECORD IN RISK REGISTER
& DO SEMI-ANNUAL
REVIEWS
MONITOR ACTIVELY USING
TRIGGERS AND HAVE A PRE-
BUILT ACTION PLAN, BUT
DON’T ACTIVELY MITIGATE
RECORD IN RISK REGISTER
& DO A QUARTERLY REVIEW

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Please note that all content & opinions
expressed in this deck are my own and don’t
necessarily represent the position of my
current, or any previous, employers

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