As the season of ghosts and goblins is coming to a close, I'm reminded of scary things that go "bump" in the night. For an entrepreneur - especially a social entrepreneur - there is no limit to the numbers of things that keep us up at night. These are the inevitable risks of entrepreneurship. But, just like other things that are scary, I find it's best to shine a light on these risks, objectively examine and develop a plan for addressing them. Generally, entrepreneurial risks fall in the following categories: market, technical, financial and people. In my Sustayne workshops, I conduct a module on these risks and counsel organizations to take inventory of their risks in each category and develop a mitigation strategy to address each. It's also helpful to get an outside opinion on what risks are the most real and what strategies might work the best. And, it's critical to do this as OBJECTIVELY as possible - try to take the emotion and the stress out of it - then, it just becomes information. To get you started, I've included a framework at the end of this blog from Sustayne to help you begin to think through the various risks you face. The next step will be to prioritize these and develop mitigation strategies. Let me know what you think. For more on risk & risk mitigation, either attend a Sustayne workshop http://www.sustayne.com/ in the Bay Area (intro. session Nov. 15 9-noon) or Seattle (intro. session Jan. 31 9-noon) this winter and spring or attend my session on Risk at the Social Enterprise Alliance Summit in Boston March 9-11 http://www.se-alliance.org/
For your social venture, explore and note the risks you face in each of the categories listed below.
Market Risk. Bad timing: too early or too late. Unexpected competition. Wrong product or service. Wrong price. Poor positioning. Wrong target market. Etc.
Technical Risk. Problems in product development, manufacturing, or sourcing. Schedule slips. Cost overruns. Unavailability of sustainable materials. Etc.
Financial Risk. Project funding doesn’t come through. Or comes through too late. Or isn’t sufficient. Or costs too much. Etc.
People Risk. Product champion quits. Sponsor leaves. Can’t find the right talent to fill out the team. Can’t pay enough to attract the talent you need. Etc.
Try not to get overwhelmed with your list of risks. Start by prioritizing them by the ones you think are the most likely to the ones you think are probably unlikely. Next, list at least one way you can reduce or remove each of the risks. Finally - breathe. Risk and managing risk is part of life. Afterall, it's easier to address the things you know than the things you don't.
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