This week I promised you a simple way to control your icebergs, to make sure you see problems coming in time to fix them before they become monsters.
It’s something called a Risk List.
And it’s just a list, either in Excel or Word with these headings:
- What is the risk
- What could go wrong as a result ie focus on what could happen
- What are you doing about it
- How likely is it to happen – rated out of 5. 5 being very likely, 1 being very unlikely
- What impact would it have – rated out of 5 again. 5 huge negative impact, 1 not much impact
So an example could be:
- Risk – we’re reliant on our biggest customer and we could lose then
- We could go bust if we can’t replace it in time
- We make sure we service the hell out of them, and we build up more customers so we aren’t reliant on that one customer
- How likely – you might say 2/5 – so not that likely (but it could happen)
- What impact – a definite 5 – it could sink the business.
When you have this list, you can look at your risks more objectively, really assess how likely and dangerous they are, and then decide on a plan to mitigate each one. Focus on the highest rated risks – anything ranking 5 and 5 needs your immediate attention.
And review your Risk List, or Iceberg List as some of my clients call it, every month when you have your finance review meeting. You DO have a monthly finance review meeting don’t you??
If you’d like a template just drop me an email and I’ll send it over to you.