There is no such thing as a risk free investment so it is important to pre-empt some risks that your business may encounter and importantly how you minimise or mitigate the risk.  Generally for each risk, it would be expected to have:

• Risk explanation
• Impact of the risk (high/medium/low)
• Likelihood of the risk (high/medium/low)
• Risk mitigation

These risks will need to be personalised to your project/business and expanded (especially in the risk register).  You should not just copy and paste the below, it is more examples and used to get you thinking in the context of your business.  Where you store up all your risks is the "Risk Register" and is a working document that you should go through in each Board or Management meeting. 

 

Risk	Risk Description	Severity (impact)	Likelihood	Mitigation actions

 

For the purpose of a business plan, we would suggest just highlighting 4 or 5 risks with a clear mitigation plan to give you potential funder comfort that you not only know about the risk but how to make sure it does no materially impact your operations or delivery of your plan.

We have split risks into specific categories to help you develop your own:

 🖥️ Technical Risks

Software Bugs: Issues found in the coding or structure that materialise in testing or production.

Mitigation: Weekly code reviews, extensive testing, patient/client bug reporting functionality, quality assurance mechanisms.

Poor User Experience (UX): cause users to disengage or misuse software. Cause lower revenue and reputational risk.

Mitigation: Extensive user research and testing. UI/UX principles.

 

Regression: Multiple versions consolidated, losing progress.
Mitigation: weekly extensive testing, quality assurance testing, quality assurance tester role incorporated into project.

 

Concept failure: Implemented features inefficient or not used.
Mitigation: extensive customer/user involvement in design, features assessed pre-release.

 

Scaling difficulties: Decreasing architecture resilience with increasing users.
Mitigation: Extensive real time testing as users increase. Rollback ability.

 

Malfunction due to lack of maintenance

Mitigation:

 

Malfunction of product

Mitigation:

 

Misuse of device/product causing undesirable or ineffective results

Mitigation:

 

 

 

 

 

 

 

Managerial Risks

Slippage: result in total project delay.
Mitigation: Working agile reduces bottlenecks, software to identify bottlenecks.

 

Staff Loss: project delay, create skill gaps.  
Mitigations: Meetings, supporting staff can mitigates initial loss. list of contractors available (that fit our core technologies) from a recruitment consultant. Key members share in company reduce risk.

 

Project Governance – slow decisions = delays, bottlenecking.
Mitigations: Clear governance structure with department leads having final say.

 

Delays/Missing deadlines due to lack of resources resulting in milestones/deliverables being missed.
Mitigations: full resource assessments. Bimonthly project meetings. Project management process for reallocation of work.

 

Recruitment: Further roles required during project.
Mitigation:  

 

Skills Shortage: Technical expertise difficult to find in job market

Mitigation:

 

Regulatory Challenges

Mitigation:

 

Scope Creep: plan changes and expands over time with consequent loss of focus and productivity

Mitigation: Project planning

 

IP conflicts

Mitigation: comprehensive FTO searches pre-launch.

 

 

 

 

 

Commercial Risks

 

Failure to Hit revenue numbers: result in cashflow issues.
Mitigations: built robust pipeline of clients. New innovative product features can be sold to existing clients for cashflow.

 

Delayed customer onboarding:

Mitigation:

 

Competitors bring similar product to market: will steal market share.
Mitigation: dedicated advertising budget post project (mention how much and where will this come from), first mover advantage, development lead over competitors, innovation, true technical advances competitors will require extensive R&D to replicate..

 

Covid-19: Economic disruption. Workplace disruption.
Mitigation: Long term, market will return, possible future boom when covid-19 minimised. Independent/remote working.

 

Unexpected/Unbudgeted Costs: project impact not achieved due to inadequate budget provision for dissemination and exploitation activities.
Mitigations: Commercialisation plan. Grant funds enables prototype development unlocking private investment post project.

 

Failure to find distribution partner.

Mitgation:

 

Competitors will attempt to steal IP or workaround your IP protection.

Mitigation:

 

Customers resistant to change from existing solution.

Mitigation:

 

Changes to regulatory landscape.

Mitigation:

 

 

 

 

 

Environmental Risks

 

Pollution: Improper disposal of waste materials results in environmental pollution.

Mitigation: Sustainability policy. Modular designs for replacement/repair. Recycling. Material disposal following Risk Assessment prior to work beginning.

 

Carbon Footprint: Energy usage, travel impact, etc.
Mitigations: Efficient design, no unnecessary server uptime, video meetings, etc.