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A Risk Management Plan

December 9 2010

The risk management plan is one of those necessary procedures that only become important when the need arises for them to be used. This plan involves one of the largest variables in running a business or project. No one can predict every risk that you will encounter because they change with time and economic conditions of the world around us.

Because of the unpredictability of risks and their impact, a good risk management plan must be in place to be utilized just in case such an event occurrs. This way you and your business can be prepared to minimize all of the risks if impact occurs and reduce the problems that arise from them.

The four basic areas that a risk management plan covers include the identification of the risks. Each identified risk also needs to be analyzed for its impact potential then prioritized. This prioritization is important. Both the impact potential and magnitude of the impact have to be considered.

If possible, every identified risk should be included in the risk management plan to mitigate its potential for damage on your project. This will help keep your project on track and progress to a successful conclusion so a revenue stream can be created.

For many the creation of a risk management plan is a difficult task. To assist in this many project managers are using project management templates. This serves two purposes. First it serves as a guide so the plan can be composed as quickly as possible. It also allows for ideas on what possible risks could be encountered with your project. Most template programs are accompanied by real life samples that can give rise to prospective risks you need to be concerned about.

While not every risk management plan is foolproof, most of them are highly successful. This is because a good deal of thought is placed into composing it and then activating the plan. This is due to the fact that no project manager ever wants to be sideswiped by an obvious risk without a plan of action ready. Not only can that have a negative consequence on the project, but explaining why you were no prepared for it could cause damage to your career.