Risk management is defined as the identification, assessment and economic control of those risks that endanger the assets and earning capacity of a business. A risk can be tolerated if: The likelihood of its occurrence is sufficiently remote and or the consequences are not severe. If what you are facing does not fall into this catergory, perhaps we need to talk.
Why Do Projects Fail?
A project fails when the plan is not met. Failure means that a project exceeds the timeline, overspends the budget, or underperforms expectations. We will outline two reasons why a plan is not met:
The plan was too optimistic. This arises when actions and costs are forced to meet predetermined targets. Underbidding, scale-to-fit, and political matters are also common causes.
External events have an impact on the plan: Scope creep, insufficient resources, unanticipated work, and extraordinary events are some examples.
To maximise the prospects of a successful outcome for your project, you should incorporate risk management.
Benefits of Project Risk Management
Project contingency can make or break a project. Having too much contingency is uncompetitive; having too little contingency increases the chance of failure. Risk assessment—or allowing for uncertainty within estimates—helps set contingency levels, with a preferred level of risk, and gives the confidence level of outcome targets.
The first step in our project risk management approach is to identify the risks that are present in your project.
Project Risk Management & Brexit advice
Several potential risks could impact UK businesses in late 2024 and beyond. While it’s challenging to predict the future with certainty, here are some key risks to consider:
1. Economic Slowdown & Recession Risks Stagnation or Contraction: The UK may still be grappling with the economic aftermath of the post-pandemic period, Brexit impacts, and global economic challenges. If the economy enters a recession or stagnates, businesses could face lower consumer demand, tighter credit conditions, and higher operating costs. Inflation: Persistent inflation, especially in energy, food, and housing markets, could lead to higher input costs for businesses. Although inflation is expected to moderate in 2024, it could remain stubbornly high, reducing consumer spending power. Interest Rates: The Bank of England may continue to adjust interest rates to control inflation, which could affect businesses with outstanding debt, especially in sectors like real estate and construction. 2. Brexit Aftershocks Supply Chain Disruptions: Although the UK has adapted to many of the post-Brexit changes, issues around customs checks, regulatory divergence, and border delays could still disrupt supply chains, especially in industries dependent on imports from the EU. Labour Shortages: Brexit has exacerbated labour shortages in sectors like agriculture, healthcare, and hospitality. As migration policies remain tight, businesses may continue to struggle to fill low-skilled and skilled positions. Trade Barriers & Tariffs: Any potential deterioration in trade relations with the EU, or delays in future trade agreements with other global partners, could impact UK businesses that rely on exports. 3. Global Geopolitical Tensions Russia-Ukraine Conflict: The war in Ukraine could continue to cause volatility in energy prices, disrupt global supply chains, and create uncertainty in financial markets. This would have knock-on effects on the cost of living, inflation, and the stability of key sectors like manufacturing, energy, and logistics. US-China Tensions: Ongoing trade tensions between the US and China could have ripple effects globally, especially in the tech sector and on supply chains that UK businesses depend on for raw materials and components. Cybersecurity Threats: As geopolitical tensions rise, so too does the risk of cyber-attacks, which could target businesses, infrastructure, and government services. UK businesses need to be prepared for heightened cyber risk. 4. Climate Change & Sustainability Pressure Extreme Weather Events: December 2024 could bring severe weather events, such as floods or storms, particularly in the context of ongoing climate change. Businesses may face physical damage to infrastructure or disruption to their operations. Regulatory Pressure on Sustainability: The UK government continues to push for net-zero carbon emissions by 2050, which may bring more stringent regulations on carbon emissions, waste management, and environmental practices. Businesses may face increased compliance costs, particularly in industries like manufacturing, transport, and construction. Supply Chain Risks from Environmental Factors: Companies reliant on global supply chains may experience disruptions due to environmental risks, such as extreme weather events or shifts in regulatory environments related to climate. 5. Political and Social Instability General Election or Political Uncertainty: A general election is scheduled for no later than January 2025, and the outcome could create uncertainty for businesses. Policy changes related to taxation, business regulation, or trade agreements could have significant implications for sectors such as banking, energy, or healthcare. Industrial Action: Strikes or labour unrest could continue to affect multiple sectors, such as transport, healthcare, and education, as unions seek higher pay or better conditions in the context of inflation and cost-of-living pressures. 6. Technological Disruption & Digital Transformation AI and Automation: The rise of AI and automation could disrupt businesses in certain industries, especially those reliant on manual labour or traditional processes. Companies may face challenges in adopting new technologies while managing the workforce implications of such transitions. Digital Transformation: Businesses may face pressure to rapidly adapt to digital technologies to remain competitive. Those lagging in digital transformation might find themselves at a disadvantage as consumers and clients increasingly expect seamless digital interactions. 7. Consumer Confidence and Behaviour Changes Shifts in Consumer Spending: A combination of inflation, high energy costs, and potential economic stagnation may alter consumer spending behaviour. In December 2024, the holiday season may not provide the typical boost to the retail sector as high living costs force consumers to cut back on discretionary spending. Growing Demand for Ethical Business Practices: Consumers are increasingly prioritizing sustainability, corporate responsibility, and ethical business practices when making purchasing decisions. Businesses that fail to adapt to these evolving expectations may lose market share. 8. Financial and Credit Market Risk Credit Tightening: If the UK faces economic pressures or banking sector instability, access to credit for businesses could become more restrictive. High borrowing costs could lead to reduced investment, particularly in capital-intensive sectors. Debt Levels: Businesses with high levels of debt may struggle if interest rates rise further or if they face difficulty refinancing debt amid economic uncertainty. 9. Health Risks and Pandemic Preparedness Future Pandemics: Although the immediate threat from COVID-19 has lessened, the world remains vulnerable to potential future pandemics or health crises, which could disrupt business operations and supply chains. Long-term Health Effects: Businesses in industries such as hospitality or travel may still be feeling the long-term effects of COVID-19 on consumer behavior, workforce health, and operational models.
Brexit news. A case study
Management Consultants London (MCL) will work with you to identify and quantify the threats. We will compare your options and agree the right course of action for you. Once we have clarified issues of ownership and prioritised the risks we will assist you in implementing the plan, for as long as you need us.
National and international franchise support
We can also support individuals and companies through the matching process through to the launch of a new franchise and management of the new site.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Ok
