big risks for small businesses · big risks for small businesses marcellus brown 15 may 2019...
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![Page 1: Big Risks for Small Businesses · Big Risks for Small Businesses Marcellus Brown 15 May 2019 Rayners Lane Consultants Ltd. Objectives Introduction to risk management Think about your](https://reader033.vdocuments.mx/reader033/viewer/2022051915/6006e974193aca08be3b7f44/html5/thumbnails/1.jpg)
Big Risks for Small
BusinessesMarcellus Brown 15 May 2019
Rayners Lane Consultants Ltd
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Objectives
Introduction to risk management
Think about your business
Look ahead to see what may come along
Manage the risks and opportunities
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Running Your Company
Why are you running your company?
Benefits you are getting
What if it fails?
Exit plan
Closure point
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Company Lifecycle
Lifecycle
Start-up
Growth
Running
Closedown
After Company closure
Issues can occur
During life of a company
Type of company
Limited Company
Partnership
Sole Trader
After company is dissolved
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Company Operation
Business as Usual / Sustain Marketing
Sales
Invoicing
Receiving payments
Delivery
Customer Service
Projects Transformations
Compliance
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Risks
Issue – a risk that has transformed into a problem (problems only exist in the
mind)
Computer – has come to end of life (beyond economic repair)
Fileserver/disk drive failed
Risks
A computer has a life and may fail
A fileserver/disk drive may fail at any time
Risk plan
Computer failure – replace with new computer and restore data
Fileserver/disk drive – replace and restore data
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Risks to a business
Business interruption
Cyber security
Cash flow
Key owner/employee
Legal
Liability
Property
Reputation
Suppliers
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Stakeholder Overview
Team CustomersPeers
Suppliers
Management
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Planning Horizons
Tomorrow is more certain than one week away
A week away is less certain than a month away
A month away is more certain than a year away
In today’s business
Rate of change
Velocity of change
Volatility
More uncertainty
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ABCD Methodology
Assumption (Survey of your business)
All positive statements e.g. a computer will last for ever
What if the assumption is not true
Identify risk
How likely/probable
What is the impact if it happens
Risk register – review regularly AND TAKE ACTION
Create risk plans for high probability and high impact
NOTE: Minimal work with weekly progress/project reviews
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Using SWOT
Strengths (internal)
Weaknesses (internal)
Opportunities (external)
Threats (external)
Create risk plans from weaknesses
So problem areas can be
assessed and plans can be
created
Add to risk register
E.g. Single printer in despatch fails
Threats
Assessed and plan written
Add to risk register
E.g. Competitor takes major
customer
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Overhead
Risk management should be in place
It should not turn a business/project to stone
Reuse of available information
Knowledge sharing
Experience sharing
Part of business setup/project initiation
Part of tracking progress
Project reporting
Company reporting
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Risks
Highly likely and high impact risks
Create risk plans
Risk register updated and copied to Project Board (Programme manager)
Review project plans
All risks
Look at mitigation
Look at avoidance
Insurance
Transfer
Root causes
Cascading risks
From M_o_R
Probability
Impact
Proximity
Directors can be caught after a limited company has been closed down (the law is changing)
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Summary
Introduction to risk management
Think about your business
Look ahead to see what may come along
Manage the risks and opportunities
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Any Questions?
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Contact info
Marcellus Brown
Email: [email protected]
Web: www.raynerslaneconsultants.co.uk
Mob: 07714 882421
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BACKUP SLIDES
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Reference Material
Cadle, James; Paul, Debra; Turner, Paul. Business Analysis Techniques: 99
essential tools for success (Kindle Location 878). BCS Learning &
Development Limited. Kindle Edition.
Sutton, David. Information Risk Management: A practitioner's guide (Kindle
Location 5). BCS Learning & Development Limited. Kindle Edition.
TSO 2009, Managing Successful Projects with Prince 2
TSO 2010, Management of Risk: Guidance for Practitioners
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Maturity CMM (Now CMMI)
Maturity levels
Level 0 Incomplete (Heroic)
Level 1 Performed process CMMI - Initial
Level 2 Managed process
Level 3 Established process CMMI - Defined
Level 4 Managed CMMI – Quantitively Managed
Level 5 Optimising
(2014, Sutton, D)
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Process Overview
PositiveAssumptions
Test
Risks
RiskPlanning
AssumptionRegister
RiskRegister
RiskPlans
Probability Assessment
Impact Assessment
Proximity Assessment
Sensitivity Assessment
Test
Probability Assessment
Impact Assessment
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Bubble Chart
01/03/2019 01/04/2019 01/05/2019 01/06/2019 01/07/2019
SmallCritical Risk
MediumModerate Risk
LargeCritical Risk
LargeImpact
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PESTLE
Political influences
Economic influences
Sociocultural influences
Technology issues
Legal issues
Environmental issues
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Resource Audit
Variants/Aliases
Tangible resources
Financial
Physical
Intangible resources
Technology
Reputation
Know-how
Culture
Human resources
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SWOT Analysis
Strengths• Alliance with Supplier 1
• Alliance with Supplier 2
• Alliance with Supplier 3
• E-commerce expertise
• Good development, implementation and
support using agile delivery
• Content Management System (CMS)
• Current customer base
• Determining non-viable business
• Employee engagement
• Rapid expansion
Opportunities• Government support for Internet
• Social Welfare Policies
• Economy is growing
• Unemployment is reducing
• Smartphone usage increasing
• Mobile device power increasing
• Green initiatives
Threats• Data Protection Act
• Internet Explorer fixes and upgrades
• Distance selling legislation
• Small competitor challenging business
Weaknesses• Vertical Market
• Small market share
• Videos on the web (Vimeo, 2014)
• Only based in one country
• Only one brandInternal
External
Positive Negative
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Porters Five Forces Framework
POTENTIALENTRANTS
INDUSTRYCOMPETITORSRivalry among existing firms
POTENTIALENTRANTS
BUYERSPOTENTIALENTRANTS
Bargainingpower ofsuppliers
Bargainingpower of
buyers
Threat of new entrants
Threat ofsubstitute
products orservices
Cadle, J; Paul, D and Turner, P 2014
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Boston Box
Wild cat(or problem child)
Star
Cash cowDog
High
Low
Market growth
HighLow Market share
Paul, D; Yeats, D and Cadle, J 2010
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Horizon scanning
From M_o_R (TSO 2010) “Horizon scanning is the systematic examination of
likely future developments that are at the margins of current thinking and
planning.”
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Probability Impact Grid
From M_o_R (TSO 2010)
0.9
Very High
71-90% 0.045 0.09 0.18 0.36 0.72
0.7
High
51-70% 0.035 0.07 0.14 0.28 0.56
0.5
Medium
31-50% 0.025 0.05 0.1 0.2 0.4
0.3
Low
11-30% 0.015 0.03 0.06 0.12 0.24
0.1
Very Low
up to 10% 0.005 0.01 0.02 0.04 0.08
Very Low Low Medium High Very High
0.05 0.1 0.2 0.4 0.8
Pro
bab
ility
Impact
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Power and Influence Grid (PIG)
Monitor and inform occasionally
Keep satisfied Manage closely
Minimaleffort
Keep informed(sell the initiative to this group)
Keep onside, Monitor interest
Leve
l of
infl
uen
ce (
po
wer
)
Hig
hSo
me
Low
Level of interest
Low Some High
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Key Performance Indicators (KPI)
Value monitored
Servers
Type
Compliant
Non-compliant
Licences
Product
Type
Licences
Seats
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Rich Picture
Graphical representation of system and environment
Suppliers
Sales
InventoryManufacturing
Marketing
Research Design
Add Data
Add power to diagrams with data. On the Data
tab, select Link Data to Shapes.
Drag Drop
To put a shape between two connected shapes,
drag it onto the connector between them.
Background
Give your drawing a professional background.
Select one on the Design tab.
Finished with these tips?
Select the Tip Pane and press
Delete