The Hidden Risk of Having a Guaranteed Customer
In businesses where the final product is sold in a guaranteed manner to one customer, such as the government, the risk of doing the job is higher because you are working with the governmental system.
For instance, in a power plant, the government purchases your generated electricity for the next ten years. Contrary to popular belief, this type of business is quite risky because it is dependent on a certain customer. If this customer goes after purchasing its needs from somewhere else, you will be crushed.
If you have guaranteed customers, or if you lack control over your customers, define your flexibility and risk in the business plan much more precisely. Prepare yourself for a long list of possible obstacles. As governments come and go, policies change, or the economy improves or deteriorates for any kind of reason, the government in control may have to change its mind.
How should you handle risk in general? You have gathered a great deal of information in the market research and analysis section. Out of the gathered information, write under the risk title whatever comes to your mind as a risk. After making a list of risks, analyze what consequences and results each of them can bring upon you if it happens.
Write the possible obstacles in your business and make the necessary predictions. Add a topic under the title obstacles to your business plan, as a subset of the risk section, or bring them in an independent part. Many of these obstacles may be simply predictions and will not happen in the real world. But have a list of them, so if you encounter them, you will have plans to overcome them according to your predictions. This gets you to think and create solutions for problems that are yet to occur.
Sometimes in practice your mind stops and you do not know how to solve a problem, but when you refer to your business plan, you realize that you have already prepared some thoughts for this section.
Have a list of variable factors and possible problems, and consider these issues in the risk section of the plan or under the part about unpredicted factors.