Risk Assessment
Risk assessment is all about assessing the impact the risk will have on your project if it occurs. Try to quantify the impact.
For example, a competitor bringing their product to market before yours will result in a loss of market share worth £200,000 in the first year.
Write down the impact in your spreadsheet.
Next you need to assign an impact value for the risk. Is it high or low risk? Add this value into the spreadsheet.
Next you need to assess the probability of the risk occurring. Is it likely or unlikely to occur? Again, add this value into your spreadsheet.
Next, you need to use the following simple matrix to assess the overall risk rating.
The 2 axes of the matrix are Impact and Probability. Choose a simple scale for each, for example High, Medium, Low.
If you rank a risk as both high probability and high impact, it will overall be high risk. If your risk is low probability and low impact, the overall risk will be low.
You have now determined the priority of the risks. Those risks which have a high risk rating should be tackled first. After tackling the high rated risks, you can tackle the medium rated risks. Finally, risks with low rating can be safely ignored.
You have now determined the priority of the risks. Those risks which have a high risk rating should be tackled first. After tackling the high rated risks, you can tackle the medium rated risks. Finally, risks with low rating can be safely ignored.
