Risk Mitigation An Orderly Way to Consider Downside Risks
Risk Mitigation: Entrepreneurs that survive tend to be very good at risk mitigation, or considering the downside risks of their actions. Uninformed people tend to describe entrepreneurs as ‘risk takers’. This is not the case. They are controlled risk takers.
Sometimes they just do it instinctively, but more often the risks of their actions are both carefully calculated and considered. In either case thinking carefully about consequences is time well spent.
Here are two tools that can be used to make assessments.
The left hand grid enables you to think in an orderly way about alternative plans of action that you may be considering. It will help assess costs, benefits and the risks associated alternative plans.
The right hand grid then enables you to think about impact levels of the alternative action plans to mitigate the risks you have identified—and the likelihood of the worst coming to worst.