Do you manage and track risks to your revenue? How?

[Racer36]

Hi all, first post here and interested to get other’s perspective. This question is coming mainly from a tech/Saas industry point of view but would be interesting to hear from other sectors if it’s applicable.

How do you currently manage and track risks that could impact your revenue? If so, what challenges do you find with your current method?

 

[Daybooks]

Would generally be the same in any business. Identify as best you can the source of existing and potential risks. Then consider what you can put in place to mitigate such risks. These are on-going discussions the board of directors or its owners should regularly have and manage. The success is largely down to the skills of individuals in both identifying and solving and of course their understanding of the business model in force; this being the biggest challenge.

 

[ctrlbrk]

How do you currently manage and track risks that could impact your revenue?

Excel spreadsheet.

If so, what challenges do you find with your current method?

No challenge.

 

[fisicx]

How do you currently manage and track risks that could impact your revenue? If so, what challenges do you find with your current method?

All in my head. Easy to monitor and manage.

@Racer36 - how do you manage and track?

 

[Frank the Insurance guy]

How do you currently manage and track risks that could impact your revenue?

Once you have identified your risks, have a chat with your insurance broker about how best to mitigate those risks and the benefits of various insurance policies. They should be able to give you advice and options - you can then take a business decision on which areas you can take on this risk yourself, and which risks you want to insurer against.

A good broker will be happy to sit with you at the outset to help identify some of the risks you need to consider,

 

[ChrisGoodfellow]

Do you mean insurable risks like @Frank the Insurance guy is talking about? Or risks like losing customers to bad service?

If it's the latter, I'm looking at customer feedback, how often we're sharing metrics or other insights and the share of our total revenue individual customers make up (should be less than 15% for us). We get customer feedback on pretty much every project and try to action things straight away. Reporting is built into each new project we sign and my management accounts show spend by customer.

For context, I run a B2B marketing agency.

Does that help?

 

[JEREMY HAWKE]

All in my head. Easy to monitor and manage.

@Racer36 - how do you manage and track?

All in my head as well and its not just about understanding risks it is also about mitigating risk with potential opportunities to fill that gap should one or many more sources source of revenue fall through

A good example is UKBF during the pandemic some of us lost a percentage of customers for a while but ended up with more new business from other customers in that time. Much of this was from previous marketing efforts in the past

 

[Mark T Jones]

Since its SAAS, I'm guessing the loading is towards recurring income? Not something a lot of us have, so I can't really comment.

With regards to doing deals, it really is a question of keeping a very close eye on your position and marketing. I made a tough - contentious decision to stick with the hospitality sector, which is very risky on my income, but I'm playing the long game.

 

[Frans VH]

Working for pharma customers actually forced us to do formal risk management.
It can be a simple spreadsheet where you note down everything that you can think of that can go wrong.
Each risk is identified by
- creation date,
- source event (what caused the risk to be on the list),
- impact (how serious would it be when the risk comes true),
- probability (the chance that the risk actually comes true

Assign a numeric score to impact and to probability (1=low up to 5=very high)
Multiply impact x probability and sort your Excel from highest to lowest. For everything above a certain threshold, you should create mitigation actions for.

Identify the action plans in the risk Excel.

Formal risk management consists mainly of regularly reviewing your list of identified risks. (e.g. every quarter)

If you want to go all the way, review the results of your actions and note down the impact and probability after the action plan is complete.

If you get this in front of auditors or compliance people, you'll be ok.

 

[sanderdehoogh]

Over the course of 4 years I ran the commercials for a SaaS business. Our tracking really depended on the type of risk we were looking at. Two examples:

Risk from market dynamics, such as competition.
We tracked these in a simple spreadsheet posted on a shared file location. All team members from marketing/sales/customer success would have access and flag new observations, we discussed the list during every quarterly review with the management team.

Risk in client relationships, such as low usage- risk of cancellation.
We tracked these by tagging types of risk in a drop down field attached to the customer/company in our CRM. It made it easy to:
- Run reports on the portion of revenue at risk, more accurate forecasting
- Align resources to the riskiest relationships (content, CEO calls, etc.)
- Make a weekly action list for sales to discuss and work on

That's of course purely the commercial viewpoint.