3 Risk assessment

We always like to think that things are going to go well, but we need to accept that that is not always the case. A risk assessment should be one of the activities carried out right at the start of the business planning process.

Maximise

Figure 10  Are you an optimist or a pessimist?

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The graphic is a comic strip. Two men are chatting at an office cubicle, one standing one sitting. The sitting man says ‘Our town hasn’t had a murder in 5 years'. The man is defined as an optimist by thinking ‘I feel really safe living here’. However the standing man is defined as a pessimist by thinking ‘we’re about due’.

Figure 10  Are you an optimist or a pessimist?

Risk assessment is a term we often associate with health and safety, but the same principles can be applied to running a small business. There are many project management courses which focus on risk assessment and risk management.

The basic principles of risk assessment are:

• a hazard – something that could cause problems of some sort
• potential for harm – what would be the consequences if this happened
• likelihood – how likely is it that this would happen.

Or, put simply: ‘What is the worst that could happen? What are the chances?’.