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Identify Your Business Risks
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MANAGEMENT RISKS
Knowledge Risk
- the risk that there are parts of managing a construction business of which you are not yet aware, and that you aren't aware that you're not aware;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Legal Entity Risk
- the risk that your chosen legal operating entity (sole proprietorship, partnership, corporation) is wrong for you, and is costing you money in taxes and/or liability;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Management Risk
- the risk that the organization you have built does not provide the structure needed to support your business activities;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Promotional Risk
- the risk that buyers in your market do not know that your company exists, and that buyers do not care about its products;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Pricing Risk
- the risk that the estimating and proposal preparation systems do not provide adequate pricing information and that proposal prices are too high (and company is losing jobs) or are too low (and company is losing money);
I am aware of this risk
I have not considered this risk
Risk is not applicable
Competitive Risk
- the risk that your construction company is perceived as a "just-like-every-other-builder" choice because you have not purposefully set it apart in the market, and all your company has to compete on is price.
I am aware of this risk
I have not considered this risk
Risk is not applicable
Market Demand Risk
- the risk that your company is mortally susceptible to market cycles;
I am aware of this risk
I have not considered this risk
Risk is not applicable
PROJECT RISKS
Injury Risk
- the risk that an subcontractor's employee will be injured on your job site and the subcontractor will not have adequate, or any, insurance to cover the related lawsuits and recovery or disability costs;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Transactional Risk
- the risk that a process does not exist to control your clients during the construction phase, and that you are one "client-from-hell" away from litigation and loss;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Scheduling Risk
- the risk that your company will not meet its contracted delivery date, resulting in costs to the client for which they will litigate, and resulting in your company's inability to begin the next project in a timely manner;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Reputational Risk
- the risk that subcontractors have a agenda that differs from your agenda, and that you have no system in place to proactively make certain that your company delivers what it was contracted to deliver;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Capacity Risk
- the risk that your construction company does not have the personnel, skills, or time to deliver on the promises made to its clients.
I am aware of this risk
I have not considered this risk
Risk is not applicable
Labor Risk
- the risk that subcontractors might be reclassified as employees;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Construction Defect Risk
- this is probably the area in which you are the strongest, because it is the "hands-on" part of a construction business. The risk is that special orders or building processes are not followed, and a significant amount of re-work must be done;
I am aware of this risk
I have not considered this risk
Risk is not applicable
FINANCIAL RISKS
Reporting Risk
- the risk that the information coming from your accounting process is either incorrect, untimely, ignored or misunderstood, and that you are operating without benefit of the information it should be providing - flying blind;
I am aware of this risk
I have not considered this risk
Risk is not applicable
Financial Decision Risk
- the risk that you can't manage what you don't understand. You need a financial monitoring system that provides timely financial information that is accurate and actionable and that you understand.
I am aware of this risk
I have not considered this risk
Risk is not applicable
Cash Flow Risk
- the risk that, even though your company is busy, you will run out of cash to complete the projects you are currently working on, and will be forced to accept work that is less profitable just to keep the money flowing, thereby digging a deeper and deeper financial hole.
I am aware of this risk
I have not considered this risk
Risk is not applicable
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