Why Include Risks in a Business Plan?
Every business faces risks. Naming them does not make your plan weaker — it shows you have thought ahead. Readers trust a plan more when it is honest about what could go wrong.
Common Types of Risk
| Type | Example |
|---|---|
| Market | A strong new competitor opens nearby |
| Operational | A key team member leaves; equipment breaks |
| Financial | Supplier prices rise; sales start slower than planned |
| Legal / regulatory | A permit is delayed; rules change |
| Technology | Your payment system or website stops working |
| External | Bad weather, power cuts, or changes in the local economy |
How to Do a Risk Assessment in 4 Steps
1. List your main risks
Pick the three to six risks that matter most. Give each a short title and one line on what could happen.
2. Rate the likelihood
How likely is it in the next 12 months? Use Low, Medium, or High. If you are not sure, choose Medium.
3. Rate the impact
How serious would it be for your money and customers? High means the business could be in danger.
4. Write a plan for each risk
What will you do to make it less likely, or less harmful if it happens? Be specific.
Free Risk Assessment Template
| Risk | Type | What could happen | Likelihood | Impact | Our plan |
|---|---|---|---|---|---|
| [Title] | [Type] | [One line] | [Low / Medium / High] | [Low / Medium / High] | [What you will do] |
Example (Illustrative)
| Risk | Likelihood | Impact | Our plan |
|---|---|---|---|
| Flour prices rise | Medium | Medium | Six-month fixed price with our main supplier, plus a backup supplier |
| Our only baker is sick | Low | High | Train the counter staff member in basic baking |
| A café chain opens nearby | High | Medium | Focus on freshness and speed; start office catering |
Common Mistakes
- Saying there are no risks. Every business has some.
- Listing twenty small risks. Focus on the few that really matter.
- Vague plans like "we will be careful". Say exactly what you will do.
Where It Fits in Your Business Plan
This is the Risks and Mitigation section. Your risks often come from the threats in your SWOT analysis. In Founderplat, you add each risk, rate its likelihood and impact, and write your plan for it.
Frequently Asked Questions
What is a risk assessment in a business plan?
A short list of the main things that could hurt your business, how likely and how serious each one is, and what you will do about each.
How many risks should I include?
Three to six of the risks that matter most is usually enough for a small business plan.
What is the difference between likelihood and impact?
Likelihood is how probable a risk is. Impact is how much harm it would do to your money and customers if it happened.
What is risk mitigation?
The actions you take to make a risk less likely, or less harmful if it happens.
Build your plan with Founderplat
Founderplat walks you through all eight sections, one small step at a time, with tips and examples for every part.
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