The risk profile should identify five risks in priority order. Make a list and number it 1-5.
Next to each number add a title for each risk. For example, if the company has risk associated with a long sales cycles and the problems it creates with cash flow, your title might be: “1. Risk: Long Sales Cycles.” Make sure your risks are numbered in priority order.
Add bullet points beneath each risk that describes the category of the risk, and whether it is internal or external, controllable or not.
Add a last bullet to describes a realistic way of managing the risk.
1. Risk: Economic Downturn
- Category: External
- Controllable: Not fully controllable
- Realistic way of managing the risk: Diversify revenue streams to reduce dependence on specific industries/regions.
2. Risk: Cybersecurity Breach
- Category: Internal
- Controllable: Partially controllable
- Realistic way of managing the risk: Invest in cybersecurity measures and conduct regular security assessments.
3. Risk: Supply Chain Disruption
- Category: External
- Controllable: Partially controllable
- Realistic way of managing the risk: Develop relationships with multiple suppliers and create contingency plans for supply chain disruptions.
4. Risk: Regulatory Changes
- Category: External
- Controllable: Not controllable
- Realistic way of managing the risk: Stay informed about regulatory changes and adapt business practices accordingly.
5. Risk: Talent Attrition
- Category: Internal
- Controllable: Partially controllable
- Realistic way of managing the risk: Create a positive work culture, offer competitive salaries, and provide opportunities for growth and development to retain top talent.