The Art, Science, and Craft of Decision-Making

Risk analysis

Risk Evaluation

• Market risks - lack of surgeons; large geographical area so that we don't compete against our own clients;
  • New entrants to market
    • Ease of entry
    • Potential threat to market share- advertising companies
  • Slower than expected adoption
• Operational risks
• Staffing risks- embedding the right candidate for the right surgeon
  • Availability of skilled workforce- x-pharma reps, x-equipment reps
  • Union issues
• Financing risks
  • Liabilities
  • Poorly worded investor contracts at risk for litigation
  • Investor pull-out
  • Lack of follow-on funding to complete project
• Managerial risks
  • Poor board or investor dynamics
  • Agency risk particular to the venture
    
    

Risk Management Plan

Detailed plans are more often found as part of internal plans. Plans written for funders may need to include a high level of description if there are significant controllable risks.

• Methods and procedures to limit liabilities
• Reserve funds
• Continuity of operations plan
  
  

Decision Making Criteria

• Break even analysis
• NPV
• IRR
• Balanced Scorecard