Project Management

Caselet 1

It's a Risky Business

Four friends wanted to start a business. After much discussion, they had hit upon the idea of launch a

mail-order toys and games business. They were in the development stage of their business plan and

wanted to be sure that they had been through with their planning. To reinforce this, they had just received

a letter from a group of venture capitalists, agreeing to fund the start up. It concluded its review of their

plan by stating:

The business plan presents a credible opportunity for all involved and we are prepared to approve the

funding request, subject to a risk analysis being carried out on the project to start the business.

The group was stunned-the funding that they had been hoping for was suddenly a reality. Just one thing

stood in their way- that damned risk analysis process.

They started with identifying the key risk elements that could face the business during in start up phase.

They considered the process between the time that they received the funding and day one of trading. What

could possibly go wrong? Lots of things. They brainstormed the possibilities and recorded them. They

then considered the effect that these would have on the project as a whole. The list they generated

prothings going wrong and not enough making sure that the positive steps towards the business opening

were happening. They needed to priorities'