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Threat Assessment in a Business Plan

Updated on August 19, 2014

You cannot predict the weather in a business plan.

Red sky in morn does not always mean forlorn. This was a perfect hiking day.
Red sky in morn does not always mean forlorn. This was a perfect hiking day. | Source

Threat Analysis or Assessment is Necessary

All good business ventures evaluate threats to business. Threat assessment is part of our modern world. But we do not need to call it that. And we do not approach it like the rest of a business plan.

We do not need to sell that the risk is there and we should not use a word like "threat".

Call it "downside contingencies" "marginal risk assessment". The example following still has a lot of problems and I use it for you to pick them out. Here are some factors already removed.

Bold print captions. Highlighted anything. Any cliche's at all. Any full clarification.

But I left in the reference to a drought so bad it would dry up a large well. Just so you would catch it and to illustrate that we do not include earthquakes, atomic bombs or terrorist attacks. Lava flows and hurricanes are generally left out also along with the plagues of Egypt.

And I left out any reference that 90% of foreseeable problems can be insured against and will be. Like massive coronary and death of our 34 year old key CEO!

I hope just by looking you can see that your need to add this into a business plan but it need not be sold to a potential investor.

See the obstacles but do not dwell on them

There are always mountains to climb and valleys to flatten!

Look to the positive and exude it!
Look to the positive and exude it! | Source

Critique at will it is what I get paid for. Comment below.

Threat Analysis

The organic and locally produced trends still have a lot of steam and the hurdles for supply to keep up with the demand growth are projected to last for years to come. Eric’s Organics does not feel that there are significant market threats

Regulatory Threats

Several regulations are standing in the way of developing Aquaponics projects in Eric’s County, among which:

  • Expensive and confusing building permits on greenhouses.
  • Unreasonable and expensive inspection fees; foundation, structural, electrical inspections and fire department approval requirements.
  • Strict zoning and setback laws.
  • Officials seem unclear about what is acceptable in the agricultural industry, many “grey” areas.
  • Harsh laws on fish farming from local agencies and the Environmental Protection Agency.

Eric’s Organics has worked diligently with a local lawyer and alerted the chairwomen of the County of Eric’s Board of Supervisors, Erica E. Because the need for low water consuming farming is a priority in the County, little resistance has been encountered so far. To the contrary, County employees have been quite helpful. Mr. Eric also attended an Eric neighborhood committee, which carries a lot of weight in the County’s decision process. The project was well received and they expect a second visit with the following information:

  • Environmental impact, construction plans,
  • Water usage and availability of wells,
  • Impact of traffic,
  • Impact on immigration.

Eric’s Organics will continue to work with the community to respond to their concerns and add value where possible.

Regularity threats can emerge despite the most cooperative approach and Eric’s Organics will hire a consultant when the circumstances warrant it. His name is Ralph Nader and he has extensive experience in building greenhouses and securing permits in the County of Eric’s.

Damage from weather and pests

As all agricultural operation, weather and pest infestations are a threat to the profitability of the operation. Winds and damage the structure and illness to the plants or fish can adversely affect production.

Eric’s Organics has taken the utmost care in creating conditions to alleviate this risk. The idea to plant an orchard was done primarily to protect the greenhouses from high winds (and also to alleviate possible fear among local resident on the greenhouse creating visual contamination). The choice of a positive induction ventilation system was also chosen in part for its ability to limit insect penetration into the greenhouses.

Water

Water remains an issue. Even after years of drought, there is still sufficient water in the wells to run an aquaponic operation. Should the drought persist and that water source disappear, Eric’s Organics would have to buy all of its water. This would significantly reduce the profitability of the operation but it would still be viable. The greenhouses will be equipped to collect rain waters and condensation to maximize natural resources and reduce any cost that could arise from a more severe drought.

Sales Projections Disruptions

Even though it is clearly established that there is a supply shortfall in the market, any shift in consumer preferences would adversely affect the numbers in this business plan.

This threat is alleviated by research into salt water crops that can be turned into oil used in various industries. The size of Eric’s Organics operation is sufficient that it could also convert into producing finished goods if the fresh market is reduced.

You can get in the game or sit on the dock of the bay, that is cool either way, but do not be an idiot.

Is this blank page you?

Do you have a project? Make it happen.
Do you have a project? Make it happen. | Source

You would be stealing.

This article was written by Eric Dierker. I reserve all rights to this article and desire no duplication without attribution. On the other hand feel free to share the content just let folks know where it came from. Copying it and claiming it as your own would be stupid and subject you to my legal harassment of you. Besides if someone asked you what it meant you would not know so yes it is copyright protected as original work by me. Just leave a comment to ask to use it elsewhere and please share it.

To read more by this fascinating author visit www.thedierkerblog.com, Eric Dierker on Facebook and Pinterest and my sweet blog resipsaloquitor on google blogs.

OK I admit it, I need more publicity. If you steal this content please let me know so I can make a big deal out of it and get some press time.

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    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Marlene, I am having some fun on a new venture using numbering system for determination of the amount of risk. Thank you for reading and commenting, I appreciate it.

    • MarleneB profile image

      Marlene Bertrand 3 years ago from Northern California, USA

      Excellent points. As a matter of fact, every endeavor needs to include a downside contingency plan. This is good reading. Staying out of trouble by planning for trouble before or if it happens is good advice.

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Hey if you keep doing so well you may be selling stock and this may come in handy ;-) Thank you much for the read and comment Nice Lady

    • grand old lady profile image

      Mona Sabalones Gonzalez 3 years ago from Philippines

      Since I am probably the worst business person ever, I should probably take this to heart. But then, I'm a writer, not a businesswoman, hahahaha. However, it was very interesting to learn about threat assessment. Well done:)

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Thank you ChitrangadaSharan it is far better to be ready than to ignore the prospects.

    • ChitrangadaSharan profile image

      Chitrangada Sharan 3 years ago from New Delhi, India

      Nice thoughtful hub with useful tips!

      Contingencies can happen, even after so much of preparation. But it is better to be prepared.

      Well written and thanks for sharing your ideas!

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Risk minimization is a full time job in any good business. Thank you Dora

    • MsDora profile image

      Dora Weithers 3 years ago from The Caribbean

      Yea, Eric. "Downside contingencies" almost always occur. I admire the thrust of Eric's Organics. Progress and Prosperity going forward.

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Right on the money Bill.

    • billybuc profile image

      Bill Holland 3 years ago from Olympia, WA

      This could probably be said about life in general, 'eh? Thanks for the tips...applicable to freelance writers as well.