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Project Risk

The document outlines a risk management and survival strategy for Project Greenforge, identifying major business risks such as lack of buyers, wrong product selection, and insufficient waste supply, along with corresponding solutions. It emphasizes the importance of customer validation, market research, and maintaining low fixed costs while ensuring compliance and minimizing downtime. The capital protection strategy allocates funds to research, working capital, machinery, and operations to ensure financial sustainability.

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wrlhello03
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2 views4 pages

Project Risk

The document outlines a risk management and survival strategy for Project Greenforge, identifying major business risks such as lack of buyers, wrong product selection, and insufficient waste supply, along with corresponding solutions. It emphasizes the importance of customer validation, market research, and maintaining low fixed costs while ensuring compliance and minimizing downtime. The capital protection strategy allocates funds to research, working capital, machinery, and operations to ensure financial sustainability.

Uploaded by

wrlhello03
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

PROJECT GREENFORGE

Risk Management & Survival Strategy

Purpose

This document identifies major business risks and defines measures to prevent financial losses.

Risk 1: No Buyers
Problem: Factory produces products but no customers purchase them.

Impact: Inventory buildup Cash flow crisis Business failure

Solution:

• Secure at least 3–5 potential customers before setup


• Obtain trial purchase commitments
• Produce samples before full-scale manufacturing
• Validate demand before expansion

Rule: No major machinery purchase without customer validation.

Risk 2: Wrong Product Selection


Problem: Manufactured product has low market demand.

Impact: Poor sales Low utilization

Solution:

• Conduct market research


• Meet 50+ potential customers
• Start with multiple product prototypes
• Focus on highest-demand product

Rule: Market decides product, not founder assumptions.

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Risk 3: Insufficient Waste Supply
Problem: Factory cannot obtain enough raw material.

Impact: Production stops

Solution:

• Multiple scrap supplier agreements


• Municipal partnerships
• Industrial waste contracts

Rule: Never depend on a single supplier.

Risk 4: Excessive Fixed Costs


Problem: High salary and electricity expenses.

Impact: Cash burn

Solution:

• Small team initially


• Rented facility
• Gradual hiring
• Outsource non-essential tasks

Rule: Keep fixed costs low until demand is proven.

Risk 5: Machinery Failure


Problem: Production interruptions.

Solution:

• AMC contracts
• Spare parts inventory
• Backup suppliers

Rule: Downtime must be minimized.

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Risk 6: Working Capital Shortage
Problem: Customers delay payments.

Solution:

• Advance payments where possible


• Maintain reserve funds
• Diversify customer base

Rule: Maintain minimum 6 months operating expenses in reserve.

Risk 7: Regulatory Delays


Problem: Pollution or compliance approvals delayed.

Solution:

• Complete approvals before equipment purchase


• Engage compliance consultants

Rule: Compliance first, investment second.

Risk 8: Market Competition


Problem: Larger companies enter market.

Solution:

• Build local supply network


• Focus on quality
• Develop strong customer relationships

Rule: Compete on reliability, not only price.

Safe Launch Strategy


Stage 1: Research and customer interviews

Stage 2: Trading and distribution model

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Stage 3: Pilot production

Stage 4: Factory setup

Stage 5: Expansion

Capital Protection Strategy


Total Capital Available: ₹50 lakh+

Allocation:

Research & Validation: 10%

Working Capital Reserve: 30%

Machinery: 40%

Operations: 20%

This ensures survival even if sales are slower than expected.

Final Principle
The company will not scale based on assumptions.

Every major investment decision must be supported by customer demand, supply certainty, and financial
sustainability.

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