This process refers to identifying, analysing and planning actions to mitigate risks. Project risks refer to potential events or circumstances that could negatively impact the project’s success, progress, or outcomes. Risks are any significant fluctuating from the expected or assumed conditions. For example, the project may face risks of lower sales than the targets or increasing costs, impacting the viability study of the project. Potential project risks may include scope creep, resource constraints, targets change, sales deviation, technical change, and inaccurate assumptions. As a result, the feasibility study should identify risks and set strategies to mitigate these risks. The significance of the risk analysis reveals the most likely risks and plans actions to reduce the causes of these risks.
Step-By-Step Process
- Form a team to identify risks and strategies for mitigation.
- Identify, analyse, and list risks and actions to eliminate the causes of these risks.
- Brainstorm these identified risks with your team and experts and finalize the project’s register of risks.
- Prepare a risk register, identifying, classifying and planning actions for risk mitigation.
- Evaluate the impact of these risks on the feasibility of the study.
Example
Here is the risk register for a pharmaceutical manufacturing facility:
| Identification of risk | Type | Likely to occur | Level of importance | Strategy of mitigation |
| Low sales | Business | High | High | In-depth marketing study.Accurate selection of the marketing mix.Choosing the right sales and marketing strategy.Allocating qualified staff and resources.Securing quota, direct, or off-take agreements with the local government to supply products. |
| Loss or low profit | Finance | Medium | High | Grow sales to reach targets and beyond.Control expenditures.Manage and control budgets and business plans.Staff development and management.Improve corporate performances.Short-term reporting and evaluation. |
| Insufficient funds for investment | Finance | High | High | Implement the project over phases.Founders to first invest in the project.Show the quality of the feasibility study.Prove desirability, feasibility and viability.Effective communication to promote the project among potential investors.Leverage funding.Seek government funds and support. |
| Delay in launching the project and products | Business | High | High | Implement the project over phases.Begin the project as a secondary packaging phase.Plan and manage registration and other regulatory requirements.Plan implementation and control execution. |
| Incurring quality issues | Technical | Medium | High | Facilitate and manage quality control system.Invest in advanced technology for production and quality check.Manage quality team.Handle quality issues to prevent recurring. |
Useful Tips
- Use multiple techniques, e.g., brainstorming, or expert consultation, to identify risks.
- Search the project’s internal and external environment to identify the causes of impactful risks.
Things To Avoid
- Avoid guessing works, biased opinions, and assumptions without evidence.
Final Note
This article is sourced from my new book- Your Guide For Preparing An Industrial Feasibility Study.
For more information about the book: https://growenterprise.co.uk/book-your-guide-for-preparing-an-industrial-feasibility-study/
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The author: Munther Al Dawood- Industrial Enterprise Expert
Grow Enterprise 