BUSI 4002 Week 8 Venture Risk Register Example

Ten Ways Keen Edge Could Fail in Its First Year: A Risk Register Rating Each by Likelihood and Impact, Naming a Trigger and a Response on the Same Line, and a Closer Look at the Van, the Founder's Hands and the Salon Estimate

Student Name

Walden University

BUSI 4002: Small Business Ventures

Instructor Name

Month Day, Year

Ten Ways Keen Edge Could Fail in Its First Year: A Risk Register Rating Each by Likelihood and Impact, Naming a Trigger and a Response on the Same Line, and a Closer Look at the Van, the Founder's Hands and the Salon Estimate

Purpose and Scale

This register lists what could go wrong in Keen Edge's first year; the venture is the composite Des Moines sharpening van used throughout the course. Every entry gets two ratings from 1 (low) to 5 (high), one for how likely it is and one for how much it would hurt, and their product gives a score out of 25. Each entry names a trigger, the observable sign that the risk is happening, and a response decided now rather than in the moment. Risks already solved elsewhere in the plan, such as basic startup funding, are left out; the register is for the problems the plan has not yet answered.

The Register

Table 1

First-Year Risk Register

Keen Edge and its risks are composite. Scores are likelihood times impact.

Reading the Worst Three

Van out of service, score 15. A one-person mobile business has one vehicle, and without it there is no business that day. A five-year-old van will need repairs, and a week in a shop could mean missing every restaurant on the route. The response is twofold: a roadside plan that includes a rental van, and a portable sharpening kit, a small belt grinder and stones that fit in a car, so the ten largest restaurant accounts can still be served while the van is down. The plan accepts that landscaper blades would wait; restaurants would not.

Founder hand injury, score 15. Sharpening involves constant contact with edges, and one deep cut could stop work for weeks. This is the risk most specific to this venture and the one most likely to be ignored by a founder who has handled knives for years. Cut-resistant gloves will be worn for every edge, a disability policy will replace part of the owner's wage, and a retired cutler I met during the pilot has agreed to cover routes for up to two weeks at a day rate. Headd (2003) found that many owners whose businesses closed still judged them successful, a reminder that firms end for reasons other than losing money, including the owner's own situation; in a one-person business, the founder's health is a business risk.

Salon accounts below plan, score 12. This is the least tested part of the market estimate. If only fifteen salons sign up by month four, afternoon revenue falls by more than half. The response is to test it before launch with twenty salon visits, and, if it fails, to fill afternoons with landscapers, equipment rental shops and hardware stores that sell knives and might offer sharpening at the counter.

What the Register Changes in the Plan

Three changes follow directly. The cost estimate now includes about $35 a month for disability coverage and a one-time $600 for the portable kit. The launch timeline adds two weeks of salon visits before the van is bought. And the founder's weekly hours become a tracked number, since running out of capacity is both a risk and a sign of success that needs a plan. Brüderl et al. (1992) found that new firms' survival depended partly on their initial resources and organization; for a one-person firm, the founder's time and health are most of both.

Several smaller risks were considered and left off the register because the plan already answers them: running short of cash in winter is covered by the reserve, losing a supplier of belts and stones is unlikely with three suppliers selling the same items, and a parking ticket behind a restaurant is a nuisance rather than a threat.

Limits

The ratings are judgments, not measurements. Kahneman and Lovallo (1993) argued that people assessing their own projects tend to underestimate risks, so the scores should be revisited after three months, when the first real breakdowns, complaints and cancellations replace estimates.

References

Brüderl, J., Preisendörfer, P., & Ziegler, R. (1992). Survival chances of newly founded business organizations. American Sociological Review, 57(2), 227-242. https://doi.org/10.2307/2096207

Headd, B. (2003). Redefining business success: Distinguishing between closure and failure. Small Business Economics, 21(1), 51-61. https://doi.org/10.1023/A:1024433630958

Kahneman, D., & Lovallo, D. (1993). Timid choices and bold forecasts: A cognitive perspective on risk taking. Management Science, 39(1), 17-31. https://doi.org/10.1287/mnsc.39.1.17