Risks and ContingenciesSome Typical RisksContingenciesTypical FormatAny Questions?Risks and ContingenciesDr. Stan AbrahamMHR 423Spring 2005Some Typical RisksCompany has no operating historyOwners have no experience running a companyA key member of the founding team leavesInitial capital needs may be underestimatedNeeded financing may not be forthcomingRevenues may be overstatedCompetitive retaliation may be underestimatedAn optimal location may be impossible to obtainThe economy’s turnaround may be delayedContingenciesFor each risk, state how the company would deal with it if it were to happen, or how it would limit the adverse impact of the riskA business plan gets low marks for not acknowledging that it faces certain risks–It also gets low marks for not having thought through how it would deal with those risksDon’t “invent” risks – include only those that are realTypical FormatGroup the risk and contingency in pairs–For each risk (usually a sentence), say what the company would do if it happened (usually a paragraph)–Choose and stick to a consistent formatTypically takes up 2-4 pages double-spacedAny
View Full Document
Unlocking...