Risks to consider in a business plan. Risk analysis of investment projects

Remark 1

There are no projects without risks.

As the complexity of a project increases, so does the number and magnitude of the associated risk. When managing projects in a meaningful way, the most important thing to think about is not intermediate risk analysis activities, but rather how to develop a response plan to reduce the level of risk.

The concept of project implementation risk

Definition 1

The risk of project implementation is a probable event that leads to the fact that the decision-maker loses the opportunity to achieve the planned result of the project or its individual parameters, characterized by time, quantitative and cost assessment.

Project risks are always associated with uncertainty, which is such a state of objective conditions for accepting a project for execution that does not allow planning the consequences of decisions due to the incompleteness and inaccuracy of the available information. If there is no information about the risk, then it becomes unknown, and it is necessary to lay a special reserve for it without implementing management procedures. For a threat for which there is at least a minimum of information, a response plan can be developed, which makes risk minimization possible.

It seems expedient to repeatedly conduct risk assessment in the course of project implementation. The most optimal risk minimization occurs within the framework of the development of the project idea or at the time of approval of the project documentation.

The main risks inherent in most projects include:

marketing risk;
risk of violation of the project schedule;
the risk of non-compliance with the project budget;
general economic risks.

Marketing risk refers to the risk of not receiving profits due to a reduction in sales volumes or the price of a product. The reasons for the emergence of risks of non-compliance with the schedule or exceeding the project budget can be both objective factors (changes in customs duties when clearing equipment, which leads to a delay in cargo), and subjective factors (poor quality of work or inconsistency of work).

General economic risks are risks that are associated with factors external to the enterprise (changes in exchange rates and interest rates, an increase or decrease in inflation).

Elements of a project risk assessment

The modern risk management methodology for project implementation provides for active work with the causes and consequences of identified hazards and threats. Risk management is a set of interrelated processes that are based on the identification, assessment of risks, determination of measures to reduce the scale of adverse consequences arising from the occurrence of a risk event.

The main procedures for assessing the risks of project implementation:

identification;
analysis;
drawing up a response plan;
control and monitoring.

Identification is the definition of risk based on the identified factors of its occurrence, as well as the documentation of its parameters. Quantitative and qualitative analysis of the sources of occurrence and the likelihood of adverse consequences is actually an evaluation procedure. In the course of planning the response to the identified factors, it is planned to develop measures to reduce the negative impact on the parameters and results of the project. Due to the dynamism and uniqueness of the events of the risks associated with them, project activities especially need efficient system monitoring and control involved at each stage life cycle project.

Project risk management

Management of risks project activities implies the following:

understanding by the participants of threats and uncertainties in the project implementation environment, their causes and possible negative events as a result of the emergence of risks.
search for opportunities for effective and efficient solution of project tasks, taking into account the identified uncertainty.
identification of ways to reduce the risks of project implementation.
finalization of the project plan, taking into account emerging risks and a set of measures to reduce them.

Remark 2

If, based on the results of the assessment, the project can be accepted for execution, then the enterprise will have to solve the problem of managing the identified risk. In case of high uncertainty of the project, it should be sent for revision, after which a qualitative and quantitative risk assessment is again carried out.

As shown by the competition of business plans, held by the company "Corporate Finance" and the journal "Financial Director", the most common mistake of enterprises planning the implementation of investment projects is insufficient study of risks that may affect the profitability of projects 1 . Since such errors can lead to incorrect investment decisions and significant losses, it is very important to identify and assess all project risks in a timely manner.

As a rule, project risks are understood as the expected deterioration in the final indicators of the project's effectiveness, arising under the influence of uncertainty. In quantitative terms, risk is usually defined as a change in the numerical indicators of the project: net present value (NPV), internal rate of return (IRR) and payback period (PB) 2 .

On this moment There is no single classification of enterprise project risks. However, the following main risks inherent in almost all projects can be distinguished: marketing risk, the risk of non-compliance with the project schedule, the risk of exceeding the project budget, as well as general economic risks.

Next, we will consider the risks of the project using the example of a jewelry factory that decided to launch a new product on the market - gold chains 3 . Imported equipment is purchased for the production of the product. It will be installed in the premises of the enterprise, which is planned to be built. The price of the main raw material - gold - is determined in US dollars based on the results of trading on the London Metal Exchange. The planned sales volume is 15 kg per month. The products are supposed to be sold both through own stores (30%), some of which are located in large shopping centers, and through dealers (70%). Sales have a pronounced seasonality with a surge in December and a decrease in sales in April-May. The launch of the equipment should take place before the winter peak of sales. The project implementation period is five years. Managers consider net present value (NPV) as the main measure of project performance. Estimated planned NPV is $1,765 thousand.

Main types of project risks

Marketing risk

Marketing risk is the risk of not receiving profits as a result of a decrease in the volume of sales or the price of a product. This risk is one of the most significant for most investment projects. The reason for its occurrence may be the rejection of the new product by the market or an overly optimistic estimate of future sales. Errors in planning a marketing strategy arise mainly due to insufficient understanding of the needs of the market: incorrect product positioning, incorrect assessment of market competitiveness or incorrect pricing. Also, errors in the promotion policy can lead to risk, for example, choosing the wrong promotion method, insufficient promotion budget, etc.

Yes, in our example 30% of the chains are planned to be sold independently, and 70% - through dealers. If the sales structure turns out to be different, for example, 20% - through stores and 80% - through dealers, for which more than low prices, then the company will not receive the originally planned profit and, as a result, the project performance will deteriorate. This situation can be avoided primarily through a comprehensive assessment of the market environment by the marketing department.

The rate of sales growth can also be influenced by external factors. For example, some of the company's own stores in case in question opens in new shopping centers, respectively, the volume of sales in them will depend on the degree of "promotion" of these centers. Therefore, to reduce the risk in the lease agreement, it is necessary to establish qualitative parameters. Thus, the rental rate may depend on the fulfillment by the shopping center of the schedule for launching retail space, ensuring the transportation of customers to the point of sale, the timely construction of parking lots, the launch of entertainment centers, etc.

Risks of non-compliance with the schedule and exceeding the project budget

The reasons for the occurrence of such risks can be objective (for example, a change in customs legislation at the time of customs clearance of equipment and, as a result, delay in cargo) and subjective (for example, insufficient study and inconsistency in the implementation of the project). The risk of non-compliance with the project schedule leads to an increase in the payback period, both directly and due to lost revenue. AT our case this risk will be great: if the company does not have time to start selling a new product before the end of the winter peak of sales, then it will suffer big losses.

Similarly, overall project performance is affected by the risk of over budget.

Definition real time and project budget

For a more accurate assessment of the project time and budget, there are special methods, in particular, the PERT analysis method ( Program Evaluation and Review Technique), developed in the 1960s by the US Navy and NASA to estimate the construction time of the Polaris ballistic missile. The methodology turned out to be effective and was subsequently used to assess not only the timing, but also the resources of the project. Currently, PERT analysis is one of the most popular and simple techniques.

The meaning of this method is that when preparing a project, three estimates of the implementation period (project cost) are given - optimistic, pessimistic and most probable. After that, the expected values are calculated using the following formula: Expected Time (Cost) = (Optimistic Time (Cost) + 4 x Most Likely Time (Cost) + Pessimistic Time (Cost)) : 6. Coefficients 4 and 6 are obtained empirically based on the statistical data of a large number of projects. The result of the calculation is used later as the basis for obtaining the rest of the project indicators. However, it should be noted that the PERT analysis design is only effective if you can justify the values of all three estimates.

If the work is performed by external contractors, then as a way to minimize these risks, special conditions can be stipulated in the contract. So, in our example, when preparing a project, work is planned to build a room and install equipment, performed by an external counterparty. The duration of these works should be three months, the cost - 500 thousand US dollars. After completion of the work, the company plans to receive additional revenue from the production of chains in the amount of 120 thousand US dollars per month at a profitability of 25%. If the supplier causes the repair and installation time to increase by, say, one month, then the company will lose $30,000 (1 x 120 x 25%) in profit. To avoid this, the contract defines sanctions in the amount of 6% of the contract value for one month of delay due to the fault of the contractor, that is, 30 thousand US dollars (500 thousand x 6%). Thus, the size of the sanctions is equal to the possible loss.

When implementing a project only on its own, it is much more difficult to minimize risks, while the amount of losses may increase.

In our example if you install the equipment on your own, in case of a delay of one month, the loss of profit will also amount to 30 thousand US dollars. However, additional labor costs for employees during this month should be taken into account. Let in our example, such costs amount to 7 thousand US dollars. Thus, the total losses of the company will be equal to 37 thousand US dollars, and the payback period of the project will increase by 1.23 months (1 month + 7 thousand US dollars: (120 thousand US dollars x 25%)). Therefore, in this case, a more accurate assessment of the duration and cost of work, as well as effective management of the project implementation process and its constant monitoring, are required.

General economic risks

General economic risks include risks associated with factors external to the enterprise, for example, risks of changes in exchange rates and interest rates, an increase or decrease in inflation. Such risks also include the risk of increased competition in the industry due to the overall development of the economy in the country and the risk of new players entering the market. It should be noted that this type of risk is possible both for individual projects and for the company as a whole.

In our example the most significant is the currency risk. When calculating a project, all cash flows are often given in a stable currency, such as US dollars. However, to better account for currency risk, cash flows should be calculated in the currency in which the payment is made. Otherwise, you can get an underestimation of the currency risk, since the fluctuation in exchange rates will not be taken into account. For example, if both inflows and investments are calculated in the same currency, and the dollar exchange rate rises, but the ruble price of the product does not change, then in fact we will receive less revenue in dollar terms. The use of different currencies for the calculation will take this factor into account, but one currency will not. This is especially true in our case, when all capital investments for the repair of the building and the purchase of equipment are made in foreign currency, and the proceeds from the sale of products - in rubles.

Project risk analysis

The procedure for assessing and analyzing project risks can be represented as a diagram (see Fig. 1).

Risk assessment is carried out during the project planning process and includes qualitative and quantitative analysis. If, based on the results of the assessment, the project is accepted for execution, then the enterprise faces the task of managing the identified risks. According to the results of the project implementation, statistics are accumulated, which allows in the future to more accurately identify risks and work with them. If the uncertainty of the project is too high, then it can be sent for revision, after which the risks are reassessed.

The procedure for managing project risks, as well as collecting and using statistical information in specific situation depends on the specifics of the company and the project being implemented and is not considered in this article.

Let us consider the qualitative and quantitative assessment of project risks in more detail.

Qualitative risk analysis

The result of a qualitative risk analysis is a description of the uncertainties inherent in the project, the reasons that cause them, and, as a result, the risks of the project. For the description, it is convenient to use specially designed logical maps - a list of questions that help identify existing risks. These maps can be developed both independently and with the help of consultants (see Fig. 2).

As a result, a list of risks to which the project is exposed will be formed. Further, they must be ranked according to the degree of importance and the magnitude of possible losses, and the main risks should be analyzed using quantitative methods for a more accurate assessment of each of them.

In our example analysts identified the following main risks: failure to achieve planned sales volumes due to both their lower physical volume (in physical terms) and lower prices, as well as a decrease in profit margins due to rising raw material prices.

Quantitative risk analysis

Quantitative risk analysis is necessary in order to assess how the most significant risk factors can affect the performance of an investment project. The analysis allows you to find out, for example, whether a small change in sales volume will lead to a significant loss of profit or whether the project will be profitable even if 40% of the planned sales volume is realized.

There are several main methods for conducting such an analysis: analysis of the influence of individual factors (sensitivity analysis), analysis of the influence of a complex of factors (scenario analysis) and simulation modeling (Monte Carlo method). Let's consider each of them in more detail, using the indicators of our example.

Sensitivity analysis. This is a standard method of quantitative analysis, which consists in changing the values of critical parameters ( in our case physical volume of sales, cost and sales price), substituting them into the financial model of the project and calculating project performance indicators for each such change. Sensitivity analysis can be implemented using both specialized software packages (Project Expert, Alt-Invest) and Excel. Calculations for analysis are most conveniently presented in the form of a table (see Table 1).

Such a calculation is carried out for all critical factors of the project. The degree of their impact on the final effectiveness of the project (in this case, on NPV) is more convenient to show on the graph (see Fig. 3).

Thus, the result of the project under consideration is most strongly influenced by the selling price, then the cost of production and, finally, the physical volume of sales.

Although the selling price has a large influence on NPV, the probability of its fluctuation can be very low, therefore, changes in this factor will pose little risk. To determine this probability, the so-called "probability tree" is used. First, based on expert opinions, the probability of the first level is determined - the probability that the real price will change, that is, it will become more, less or equal to the planned one ( in our case these probabilities are equal to 30, 30 and 40%), and then the probability of the second level is the probability of deviation by a certain amount. In our example the reasoning is as follows: if the price still turns out to be less than the planned one, then with a probability of 60% the deviation will be no more than -10%, with a probability of 30% - from -10 to -20% and with a probability of 10% - from -20 to -30% . Similarly, deviations in positive side. Deviations of more than 30% in any direction were considered impossible by the experts.

The final probability of the sales price deviation from the planned value is calculated by multiplying the probabilities of the first and second levels, so the final probability of a price reduction by 20% is quite small - 9% (30% x 30%) (see Table 2).

Total risk by NPV in our example is calculated as the sum of the products of the final probability and the risk value for each deviation and is equal to $6.63 thousand(1700 x 0.03 + 1123 x 0.09 + 559 x 0.18 - 550 x 0.18 - 1092 x 0.09 - 1626 x 0.03). Then the expected value of NPV, adjusted for the risk associated with a change in the selling price, will be equal to 1758 thousand USD(1765 (target NPV) - 6.63 (expected risk)).

Thus, the risk of changes in the selling price reduces the NPV of the project by 6.63 thousand US dollars. As a result of a similar analysis of two other critical factors, it turned out that the most dangerous is the risk of changes in the physical volume of sales: the expected value of this risk was 202 thousand US dollars, and the expected value of the risk of changes in the cost of 123 thousand US dollars. It turns out that a change in the retail price is not the most important risk for the project under consideration and can be neglected, focusing on managing and preventing other risks.

Sensitivity analysis is very clear, but its main drawback is that the influence of only one of the factors is analyzed, and the rest are considered unchanged. In practice, several indicators usually change at once. Scenario analysis helps to assess such a situation and adjust the NPV of the project for the amount of risk.

Scenario analysis. To begin with, it is necessary to determine the list of critical factors that will change simultaneously. To do this, using the results of the sensitivity analysis, you can select 2-4 factors that have the greatest impact on the outcome of the project. Consider at the same time large quantity factors does not make sense, because it only complicates the calculations.

Three scenarios are usually considered: optimistic, pessimistic and most probable, but if necessary, their number can be increased. In each of the scenarios, the corresponding values of the selected factors are fixed, after which the project's performance indicators are calculated. The results are tabulated (see Table 3).

As with sensitivity analysis, each scenario is assigned a probability based on expert judgment. The data of each scenario is substituted into the main financial model of the project, and the expected NPV values and risk values are determined. The magnitude of the probabilities, as in the previous case, must be justified.

The expected value of NPV in this case will be equal to 1572 thousand USD(-1637 x 0.2 + 3390 x 0.3 + 1765 x 0.5). Thus, unlike the previous stage of the analysis, we received one more accurate comprehensive assessment of the effectiveness, which will be used in further decisions on the project. It should be taken into account that a large gap between the planned and estimated NPV values indicates a high project uncertainty. There may be additional risk factors in the project that need to be considered.

Simulation modeling. In the case when exact estimates of the parameters (for example, 90, 110 and 80%, as in scenario analysis) cannot be set, and analysts can only determine the intervals of possible fluctuations of the indicator, the Monte Carlo simulation method is used. Most often, such an analysis is carried out to identify currency risks (fluctuations in the exchange rate during the year), as well as risks of fluctuations in interest rates, macroeconomic risks and others.

Due to its complexity, Monte Carlo calculations are always carried out using software products that have the appropriate function (Project Expert, Alt-Invest, Excel). The main meaning of the calculations is as follows. At the first stage, the boundaries within which the parameter can change are set. Then the program randomly (simulating the randomness of market processes) selects the values of this parameter from a given interval and calculates the project's performance indicator, substituting the selected value into the financial model. Several hundred of these experiments are carried out (in electronic calculations, it takes several minutes), and a lot of NPV values \u200b\u200bare obtained, for which the mean (m) is calculated, as well as the risk value ( standard deviation, d). In accordance with the statistical rule (the so-called “three sigma rule”), the NPV value will be in the following intervals (see Table 4):

with a probability of 68.3% - in the range m ± d;
with a probability of 94.5% - in the range m ± 2d;
with a probability of 99.7% - in the range m ± 3d.

As can be seen from the table, m = 1725, d = 142. This means that the most probable NPV value will fluctuate around the value of 1725. Applying the “three sigma” rule, we find that with a probability of 99.7%, the NPV value falls within the range of 1725 ± (3 x 142), even the lower limit of which is greater than zero. Therefore, with a high degree of probability, the result of our project will be positive. If a negative result was obtained with a two- or three-fold deviation (this is possible with a low NPV of the project or high sensitivity to the factor), then using the “three sigma” rule, you can determine what the probability of this deviation is and draw a conclusion about the possibility of an unfavorable occurrence. outcome. For example, if at m ±d the value of NPV > 0, and at m -2d the value of NPV< 0, это значит, что с вероятностью до 13,1% ((94,5% - 68,3%) : 2) эффективность проекта отрицательна, он имеет довольно высокий риск и может быть пересмотрен.

In our example, the project for the production of gold chains is generally characterized by a low degree of risk, since the NPV of the project is very likely to be positive, and the calculated maximum risk in the implementation of the pessimistic scenario is 193 thousand USD (1765 thousand - 1572 thousand) . Therefore, the project can be accepted. Nevertheless, it is worth insuring against the risk of non-compliance with the launch of capacities (construction and installation of equipment), as well as the risk of increasing costs (for example, by purchasing options to buy gold). In addition, you need to pay attention to the promotion of goods: the advertising policy of the company and the choice of the point of sale. This can be done by building on previous practice or by working out lease agreements and contracts for supply chains to distributors.

In conclusion, we note that the application of the described approach to the analysis of project risks often allows, already at the first stage of project evaluation, to make a decision regarding its further development, as well as draw conclusions about possible ways risk minimization. It should be emphasized that reasonable expert assessments must be a prerequisite for such an analysis, otherwise the efficiency of the work will be low.

“The more complex the business model of the project, the more carefully it is necessary to assess the risks”

Interview with the director of the corporate finance department of the investment company ATON (Moscow) Dmitry Aleevsky

- Do you think there are differences between project and operational risks of the company?

It seems to me that there are no fundamental differences between these risks. Project risks are a logical extension of operational risks, since most of the company's projects are based on an already existing business model.

- However, companies evaluate the riskiness of a particular project, if only to understand how its implementation will affect the overall risk of the business. How carefully should the assessment of project risks be approached?

Approaches to assessing such risks should depend mainly on how typical the project is for the company, and not on the amount needed to implement it. Thus, the construction of a new retail chain store can be a high-budget project, but its implementation will use technologies already known by companies that will guarantee the store an influx of customers and a stable income: market capacity analysis, determination of consumer preferences of the area and appropriate advertising.

If a company decides to diversify its business and acquire, for example, a network of gas stations to locate its stores, then it will have to face a completely different level of risk. For retailers, this business will be completely new, and they will be forced to take into account factors unknown to them: the purchase of gasoline, pricing, location of gas stations, etc. If the decision to open the next store can be made on the basis that the company needs a presence in the area , then the decision to purchase gas stations should be worked out to the smallest detail, since the risk of such an investment will be immeasurably higher due to the uniqueness of the project for this company. In addition, with the new acquisition, the core business will also change: supply chains will become more complex, managers will have to make decisions in an area unfamiliar to them. Thus, the more complex the business model of the project, the more carefully it is necessary to assess the risks.

- In what sequence are the project risk assessment activities carried out?

First, sensitivity analysis and scenario analysis are carried out, which are based on a simplified definition of project parameters (discount rates, environmental conditions, etc.). This allows you to either reject the project or decide to conduct a more detailed study and determine areas for further work. With a positive result of the study, all aspects that can somehow affect the outcome of the project are worked out. Then again a quantitative analysis is carried out on the basis of updated data and measures to eliminate (insurance) the risks identified during the work. In the end, if a decision is made to implement a project, then the total level of its risk, that is, the amount that the investor will lose in case of failure (taking into account all insurance measures), should not exceed an acceptable value, for example, 20% of the NPV of the project.

Interviewed by Anna Netesova

1 For more information about the results of the competition, see the article “How not to make mistakes when drawing up a business plan”, “Financial Director”, 2003, No. 4. - Note. editions.
2 The formulas for calculating these indicators are not given in this article, since they have already been published in our journal (see the article “Estimation of the cash flow of an investment project”, “Financial Director”, 2002, No. 4). In addition, these formulas can be found in any textbook on financial management or investment appraisal. - Note. editions.
3 In order to maintain the confidentiality of commercial information, the author considers an example with conditional data, which is based on real project from his personal experience. – Note. editions.

Project risks name such events (or conditions) that have a negative or positive impact on one or more project objectives. Project risks include timing, cost, quality, or scope. The risk depends on a specific project, for example, when a target is defined for the final result according to a certain action plan, or the final result should be a project that does not exceed the cost specified in the budget, and so on. It can be triggered by several reasons, which in turn will affect certain project factors.

Project risks: understanding the concepts

Project risk- this is an effect that allows you to accumulate the likelihood of a series of events that will positively or negatively affect the goals of the project itself. They are divided into two types: known and unknown. As a rule, known threats can be recognized at the beginning of the project, which allows them to be managed - to create contingency plans that provide for possible losses. And unknown risks cannot be determined in advance, so it is impossible to predict further actions.

Risk event- an event that can occur during the implementation of the project, while it will bring a benefit or harm.

Probability of risk occurrence- possible threat. Each risk in the implementation of the project is assigned a share of more than 0%, but less than 100%. Risk with 0% probability - not considered a risk because it cannot happen. And a risk with a 100% probability is also not a risk, but a real event, which is necessarily provided for by the project.

Consequences of risk- labor costs, money, failures of the action plan - determine the degree of influence on the implementation of the project goals.

The magnitude of the risk is an exponential value that combines its probability with its consequences. The formula for calculating the magnitude of the risk = probability of occurrence of the risk * appropriate actions.

Reserve for contingencies(or a reserve to cover uncertainty) - represents a certain amount of money or a time period. Everything you need to calculate how to reduce the risks of cost overruns, as envisaged by the project objectives, to a cost level acceptable to the organization. A contingency reserve is included in the base project cost plan.

Management reserve- also presented in the form Money or a certain period of time, which are not included in the basic project cost plan, but are used by the head of the enterprise in order to prevent possible negative consequences that cannot be predicted.

risk tolerance– determining the degree of readiness of the organization to possible threats. Some organizations are ready to take risks, while other organizations avoid these risks in every possible way. Someone takes big risks to earn even more, and someone eschews the problems associated with the loss of finances.

At its core, risk is a form of uncertainty. However, there is a significant difference between these two concepts.

Uncertainty is a set of factors that do not determine the outcome of actions, and the degree of possible influence of these factors is not known in advance. Uncertainty is also the incompleteness and inaccuracy of presenting information about certain conditions of work on the project. Uncertainty is caused by external or internal factors. External factors are understood as legislation, the influence and reaction of the market to the demand and production of goods, the activities of competitors. Internal factors include the professionalism of the organization's employees, the proportion of errors in the definitions of design characteristics, and others.

Risk is a possible, qualitatively and financially measurable loss. The concept of "project risk" reflects the degree of danger for the positive implementation of the project. The concept of risk is the uncertainty associated with the occurrence of negative situations in the implementation of the project, which entails adverse consequences. Such risks arise from objective and subjective probabilities.

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Main types of project risks

Systematic risks are beyond the control and influence of project management. They are always there. These include:

political factor (political situation in the country, changes in the socio-economic sphere);
natural factors, ecology, natural disasters;
legal, legal risks (imperfection of the legislative framework);
economic risks (volatility of the exchange rate in the currency market, taxation, sanctions, and others).

The amount of systematic or "market" risk does not depend on the specifics of a particular project, but on the situation on the market as a whole. In those countries where the stock market is well developed, to determine the degree of impact of these risks on the ongoing project, a special coefficient β has been introduced, the use of which is based on stock market statistics for each specific industry or organization. In our country, this statistics is not common, on the basis of this, it is customary to use expert estimates. Depending on the probability of risk, various measures are envisaged in order to avoid negative consequences during the implementation of projects. Certain scenarios for the development of the project plan are being developed, based on a number of external conditions.

There are so many reasons why law enforcement officers come to the company, as if doing business itself is already suspicious. It does not matter how strictly you yourself comply with the requirements of the law. If at least one of your counterparties falls into the sphere of attention of law enforcement officers, the probability of a visit by law enforcers is very high.

Non-systematic risks can be eliminated partially or completely, thanks to competent project management:

related to production (non-fulfillment of the sales plan, work, production volumes, etc.);
associated with financial losses (shortage of profit from the project, lack of liquidity of products);
related to the market situation (pricing instability, new competitors in the business niche).

Most unsystematic risks are manageable. They divided into several groups based on their impact on the implementation of the project.

The risk of not receiving the expected income from the project implementation

Manifestation: the project is not effective, has an NPV value (negative value). In this case, we mean a global increase in the payback period of the project. This group includes risks associated with financial flows in the operational phase, namely:

Marketing risk - the possibility of shortfall in profit due to the fact that the sales plan was not fulfilled or a large-scale reduction in sales prices was made against the background of the planned ones. The profit of the project is determined by the revenue, and to a greater extent affects the efficiency. That is why marketing risks are key among all possible ones. In order to reduce the likelihood of its occurrence, a thorough study of the market situation is required, the identification of factors that may affect the project, forecasting their occurrence or strengthening, and identifying ways to eliminate the negative consequences of these factors. By factors, we mean all kinds of changes in the market in a particular business area, increased competition, a weak position in the market, a decrease in demand and prices for project products, etc. Qualitatively assessing marketing risks is important especially when we are talking on the launch of a new production facility or an increase in existing production capacity. If the goal is to reduce production costs, then they are studied last.

Example: if we are talking about the construction of a hotel, then marketing risks affect two characteristics: the cost of rooms and their occupancy. If the investor has set the room rates based on the location of the hotel and its class, then the main uncertainty factor will be guest occupancy. It is necessary to determine the ability of this enterprise to “survive” under different values occupancy. The possible values of this parameter are revealed by the statistics of the study of the hotel business market in a particular area. If there is no statistics, then the values are set analytically.

The risk of exceeding the production cost of products

The case when the costs exceed the planned finances for the project, which entails a decrease in profits. In this case, you need to analyze the costs of your company and similar (possibly competing with yours) suppliers of raw materials (remoteness, delivery, availability of alternatives), predict the cost of raw materials.

Example: suppose that the raw materials consumed by the project contain agricultural products, or, for example, an impressive part of the cost is the cost of petroleum products, so the dependence of raw materials prices on specific factors should be taken into account: harvested volumes, market conditions, energy costs, etc. d. Naturally, the cost of raw materials cannot be fully included in the price of products. Especially important in this case is the study of the dependence of the results of the project on the amplitude of the cost in a certain period of time.

1. Technological risks - associated with a shortfall in profit due to the fact that the production volume plan was not fulfilled or the cost of production increased due to the use of new technologies.

Technological risk factors:

Features of the technology used are well-established production processes, their applicability in certain conditions, the conformity of raw materials, and so on.
The dishonesty of the equipment supplier - failures in the supply of equipment, marriage, poor quality service.
Lack of affordable service for servicing purchased equipment - the lack of regional service representatives leads to long downtime in production.

Example: consider technological risks in the construction of a brick factory. Initial conditions: the premises are available, the equipment is purchased, the sources of raw materials are known, and the equipment is supplied by one well-known manufacturer in the form of a turnkey production line. In this case, technological risks should be minimal. And if, during a project with the construction of a brick factory, only the place where the quarries are located for the extraction of raw materials is known, and the building needs to be built, the equipment must be purchased and installed at its own expense and by various suppliers, the technological risks will be huge! Most likely, a third-party investor will have the right to demand additional guarantees or removal of risk factors.

2. Administrative risks - associated with a shortfall in profit due to the excessive influence of administrative power. If the authorities are interested in the implementation of the project, then these risks are significantly reduced.

Example: The risk associated with difficulties in obtaining a building permit is common. Banks rarely engage in the financing of commercial projects in the field of commercial real estate without the necessary permission, considering these risks unreasonable.

You will be taught how to successfully resist risks and choose the best anti-crisis strategy for your company on a course from the School of the General Director.

Risk of insufficient liquidity

Manifestation: At the end of the forecast period, the budget has a negative cash balance. There may be risks of investment projects, and in the operational phase:

The risk of exceeding the project budget. It arises due to the fact that it took more investment than previously planned. This risk can be significantly reduced by detailed analysis investments at the planning stage of the project. This requires its comparison with similar projects, industries, analysis of the technology chain, viewing the full scheme of the project, setting the amount of cash flow. It is recommended to plan for contingencies. A 10% over budget would be considered the norm. Based on this, there should be a limit available funds applying for a loan for a project.

Risk of discrepancy between the investment schedule and the financing schedule. Financial investments come with a temporary delay or not in the amount that was planned. Or there is a strict schedule of a bank loan, which does not allow the slightest deviation from payments. In order to avoid the negative consequences of the risk, you should initially reserve your own money, or, as for credit funds, take into account the possibility of fluctuations in the timing of the withdrawal of money when signing the contract.

The risk of shortage of funds at the stage of reaching the design capacity. It is he who provokes a delay in the operational phase, a slowdown in the rate of reaching the planned capacity of the project. The reason lies in the unconsidered working capital at the planning stage.

Risk of shortage of funds in the operational phase. The decrease in profits and the lack of finances to pay off credit obligations and debts to suppliers are influenced by internal and external factors. When borrowing funds for a project, one of the main ways to reduce the risk of a shortage of funds is to use the debt coverage ratio derived during the construction of the loan repayment schedule. The method is to set the fluctuation of the money earned by the company in accordance with the forecasts of situations in the market and the economy as a whole. So, with a coverage ratio of 1.3, the company will lose 30% of profits, but will retain the ability to repay credit obligations.

Example: Initially, the construction of, for example, a business center, will not seem like a risky project if you study only price fluctuations. Statistics show that the fluctuations will not be so great over the general period of the project's existence. But the situation is completely different when the rate of rental and debit with credit are taken into account. A business center built using credit funds will easily go bankrupt even in a short period of crisis. This is exactly what happened with a huge number of objects that began their activities at the end of 2008.

The risk of non-fulfillment of planned work in the investment phase for organizational or other reasons

Manifestation: The start of the operational phase is delayed or not started at full capacity. There is a pattern that the complexity of the project directly depends on the requirements for the quality of its management. In order to minimize this risk, it is necessary to select a team of qualified specialists to manage the project, select the most profitable options for the supply of equipment, conclude contracts with contractors for the implementation of a turnkey project, etc.

Project Management: 10 Conditions for Successful Implementation

Practitioner tells

Alexey Kosarev, Head of the System Analysis and Risk Management Department, OJSC Magnitogorsk Iron and Steel Works.

Any risks are grouped into certain types. Personally, I stick to considering the following:

related to pricing issues for the project products, as well as the prices of raw materials, materials and services used;

property (meaning the loss or damage to the main fund);

market (monitoring the exchange rate, stock indices, the value of assets, securities);

associated with theft and actions of fraudsters.

For manufacturing enterprises, accidents, industrial accidents, etc. become special risks. For trade enterprises, logistics, intermediation in supply and distribution, unscrupulous suppliers (especially if there is only one supplier), receivables of wholesale buyers (especially if payment is made with a deferred payment) become risks.

At the enterprise where I work, a list of certain risks and provoking factors was formed. Each risk has a specific and unambiguous wording, which allows you to consider in detail the causes of their occurrence, and greatly simplifies the process of assessing risks and developing measures to reduce them. Very convenient way sort out the risks graphic image in the form of a table of coordinates "damage" / "probability". There is no particular difference in their presentation in the form of a map or in a table. We just think that it is most convenient for us to represent the risks on the coordinate plane. It clearly shows dynamics. But in general, an enlarged view is useful when automating a management system, especially you need to have information about risks regarding types of activities, business processes or structural divisions of an enterprise.

Project risks and work with them: 6 main steps

Step 1: Planning for risk management

Risk management planning needs to be as thorough as planning the cost and schedule of the project itself. It should be borne in mind that well-planned risks increase the likelihood of achieving your goals.

Risk management planning is a process in which approaches are defined and actions are planned to manage project risks. The strategy of the organization is formed, the basic rules are formulated, which allows them to be managed.

There are 4 sources of information for organizing project risk planning processes:

Factors of the external environment of the enterprise. The attitude of the people involved in the project has a huge impact on the project management plan.
Organizational process assets. Each organization may have predefined risk management approaches, such as categories or general definitions concepts, templates, standards, designation schemes for responsible employees and documents that define levels of authority in making important decisions.
Description of the content of the project.
Project management plan.

Planning and review meetings are considered to be a tool and method for risk management planning. The meetings are attended by the project team, the project manager, representatives of the organization who are responsible for planning operations for risks and the company's possible response to them. The participants of the meeting draw up the main plans for conducting risk management operations, develop cost components and planned operations included in the project budget and schedule. At the meeting, the degree of responsibility is distributed among the project participants in case of a risk. If an organization has common patterns that define risk categories, terms (such as levels of risk, probability of occurrence by type, possible consequences risks for the project, the matrix of probabilities and consequences), then they are adapted for each specific project, taking into account its specifics. And then a risk management plan is already formed.

Step 2. Risk identification

Risk identification is the process of identifying risks that may affect the project in any way, as well as documenting their characteristics. Project team members and risk management experts conduct risk identification. Customers of the project, participants and experts of a narrow profile can also take part in it. The process of identifying risks is iterative in nature, as new ones may arise during the development of the project. Each special project has its own unique composition of participants and frequency of iteration. The participation of project team members in the process of identifying risks helps to develop in them a sense of ownership and responsibility for each risk and their further actions to respond to them.

The input information for the risk identification process is:

Factors of the external environment of the enterprise - information comes from open sources, taking into account commercial databases, scientific papers and others research work in the field of risk management.
Assets of the organizational process - information on the implementation of previous projects.
Description of the content of the project. Project tolerances are specified in the description of the scope of the project. The absence of uncertainty in the design tolerances is required, otherwise the threat of risks is visible.
Risk management plan. The outputs of the risk identification process from the risk management plan are the order in which responsible persons are assigned, the reserve for risk management activities in the budget and schedule, and risk categories.
Project management plan. Determining the type of risk requires understanding the project schedule management plans, the price and quality of goods in the project plan, and of course analyzing the outputs of these processes.

Reviewing the documentation involves reviewing project materials developed prior to the review. First of all, the quality of plans lends itself to analysis, then the consistency of plans, their compliance with the requirements of Customers, project tolerances, solid plans for content, timing, cost are considered - absolutely everything that will serve as a risk provocateur in the project is taken into account.

Information collection methods:

Brainstorming is a meeting of 10-15 people: members of the project team together with independent experts from different fields, where they develop a detailed list of project risks. Each participant in the meeting names the threats that, in his opinion, are important to the project. Discussion of the proposals put forward is not allowed. All risks are sorted into categories and specified.
Delphi method. The only difference with brainstorming is that the meeting participants don't know each other. There is a facilitator who asks questions in order to get ideas about the risks of the project, collects the answers of the experts present. The experts' responses are then analyzed, categorized and fed back to the experts for comments. The agreed list goes through several rounds of the Delphi method. It excludes pressure from employees and the fear of expressing their idea in the presence of colleagues.
The nominal group method aims to identify risks and rank them in order of importance. Groups of 7-10 experts take part in the implementation of this method, each of which lists the risks of the project that he sees, without discussion. After all the possible risks of the project have been identified by common forces, a joint discussion begins and the list of risks is re-compiled as they become important.
Crawford cards. A meeting of experts is held - 7-10 people. Usually a group of 7-10 experts gathers. The facilitator informs that he will ask the group 10 questions, for each of which the participant must give answers in writing, on a separate sheet of paper. The question of which of the risks is the most important for the project, the facilitator asks several times. Each participant is forced to consider ten different project risks.
Surveys of experts with solid experience working on various projects.
Identification of the root cause. The need to identify significant causes of risks and their distribution into groups is pursued.
Analysis of strengths, weaknesses, opportunities and threats (SWOT analysis). It is necessary to analyze the strengths and weaknesses of the project and its environment. Assessing the environment, it becomes clear what threatens external environment and what is favorable for the project. Analysis of checklists. The lists reflect all the risks that are based on the knowledge and input information accumulated during the implementation of such projects.
analogy method. To identify risks, accumulated experience and knowledge on risk management from similar projects is used.
Methods using diagrams. To depict risks, diagrams of cause-and-effect relationships are used, and flowcharts that allow you to streamline the sequence of events of a particular process.

As a result of identification, a Risk Register is formed, which contains:

List of identified risks.
A list of response actions is displayed in case of threatening uncertainty.
The main reasons for the emergence of risk are indicated.
The list is divided into categories.

In the course of identification, the resulting list of risk categories can expand, which leads to an increase in the hierarchy in their structure, obtained in the course of drawing up a risk management plan.

How to make decisions about launching investment projects

Practitioner tells

Lilia Kukhareva, Managing Partner of KRES-Consulting, Moscow

A special approach to the organization of work is the Project. It is project management methods that are most effective when an organization sets itself a complex new task, for which there are severe budget and time constraints. Thanks to this, it is possible to make a major transformation in the organization, for example, to implement ISO 9001:2000, the process approach, Lean technologies. Thus, there are projects to develop innovations in business.

In the course of work on the project, all participants closely interact in it. Experts from various structures are involved in solving complex problems. The approach to work must be coordinated in order to meet deadlines, and creative in order to cope with any task. The team must become a team. It is the team that is responsible for the final result of the project.

Step 3. Qualitative risk analysis

In risk management there is the main problem related to the size of their list formed at the stage of identification. The fact is that it is not possible to manage all the risks, as this is fraught with serious financial and personnel costs. Therefore, it is important to distribute them into groups according to priority. The primary classification of risks can be based on the time of their onset. Close risks are given high priority. They should then be ranked in order of importance in order to proceed with further analysis and planning of actions in case of risk. The fastest and cheapest way to prioritize is a qualitative risk analysis, which is carried out throughout the project and reflects every change that comes into contact with the risks of the project.

Qualitative analysis is carried out in the presence of the following information:

1. Assets of the organizational process - considers data on risks that have happened in other projects, as well as the accumulated knowledge.

2. Description of the content of the project.

3. Risk management plan containing the following elements:

appointment of responsible people in risk management, including budget and planned operations to manage them;
risk groups by category;
prescribed probability of occurrence of risks and their consequences;
compiled matrix of probabilities and consequences of risks;
an indication of the risk tolerance of the project participants.

4. Risk register containing a list of risks to be identified.

5. Tools and methods for conducting a qualitative risk analysis:

determining the likelihood and impact of risks. all identified risks are subjected to an assessment of likelihood and impact by experts, and are also ranked based on the provided definitions in the project management plan. those with clearly low likelihood and impact are not included in the overall rating, but are on the list of risks that are being monitored further;
probability and consequences matrix - allows you to determine the degree of risk for each goal separately, for example, for project cost, implementation time or scope. the degree of risk allows you to control the response time. for example, threats from a high-risk area (indicated in red) require preventive action and an operational strategy to respond. and for green zone risks, preventive operations are not relevant;
risk classification is an excellent tool for distributing incoming information related to project risks and a convenient search system for similar cases. Risks are classified in order to be able to divide them into groups and identify managers who better than others understand the features of a particular risk.

Qualitative risk analysis allows you to update their register based on the following information:

ranking project risks by priority;
lists of risk groups by category;
lists of risks from the "red zone" that require immediate response;
lists of risks requiring further study;
the results of a fruitful risk analysis.

At the end of this stage, it becomes possible to assess the overall risk level of the project in relation to quality: the project is high-, moderate-, low-risk. These evaluation criteria allow you to independently determine, for example, at what number of "red" levels the project will be considered "high risk". It is best to record your subjective assessment separately and then monitor its dynamics, which will be a reflection of the quality of work in the project.

Step 4. Quantitative Analysis

Quantitative risk analysis - analysis of the impact of certain risks on the overall objectives of the project.

Quantitative analysis is performed for those risks that were identified during the qualitative analysis. An important assessment of such an analysis is the identified probability of occurrence of risks and the amount of benefit or damage. A risk analysis is performed, with a high or medium degree of probability. And the method of analysis is determined for each specific project, depending on its timing and funding.

The initial information in the quantitative analysis was:

Organizational process assets.
Description of the content of the project.
Risk management plan.
Risk register.
Project management plan.

The most common methods for quantitative project risk analysis are:

sensitivity (vulnerability) analysis;
scenario analysis;
risk simulation using the Monte Carlo method.

In order to explore each of the above methods, you need to know about them. general idea. Quantitative analysis is based on the basic version of the project risk calculation. Qualitative analysis allows you to determine the factors that affect the risks of the project. The objective of quantitative analysis is to numerically measure the impact of changes in risk factors on the positive effect of the project.

Sensitivity analysis identifies those risks that have the greatest impact on the project. The method is to track the parameters that affect the project under study. After the parameters are fixed, changing one of them, it becomes possible to influence the situation. Suppose, considering the issue of the possible profit of the Project Executor, it is necessary to highlight the parameters that affect it: the lack of specialists among the staff, the need to attract qualified employees, the lack office space, the need to rent, the lack of a minimum set technical means to equip jobs and the need to purchase the necessary technical equipment. After that, a sensitivity analysis is performed for each parameter that has the highest degree of risk.

Scenario analysis. Based on the development of sensitivity analysis techniques. As a result of its implementation, the entire group of variables is subject to simultaneous and unquestioning change. Three types of scenarios are calculated: pessimistic, optimistic and most realistic. Based on these calculations, new values are built for the NPV and IRR criteria. These indicators are compared with the main values, giving all the necessary recommendations, which contain the “rule”: despite the optimistic scenario, the project cannot be considered further if the NPV criterion has a negative value, and vice versa: the pessimistic option with a positive NPV value is the most acceptable, even taking into account possible worst case expectations.

Risk analysis using the Monte Carlo simulation method is a combination of sensitivity analysis and scenario analysis methods. Implement this method is possible only with the help of a special computer program that will give the result in the form of a probability distribution possible outcomes project, for example, the probability of the NPV criterion<0.

Even in the process of risk identification, a risk register is formed, with a qualitative risk analysis it is updated, with a quantitative analysis, the register is updated again. The risk register is part of the project management plan, therefore, the following elements of it are updated:

Probabilistic analysis of the project, evaluates the possible outputs of the project schedule and its cost. A list of project completion milestones is compiled. As a result of the probabilistic analysis of the project, a distribution of cumulative probabilities appears, taking into account the risk tolerance of the project participants, so that it is possible to correct the cost and time reserve for force majeure.
Probability of achieving cost and time targets. Based on the results obtained with the help of quantitative risk analysis, it is possible to assess the probability of achieving the project goals, the background for which is?

An expert assessment of all negative factors that cannot be influenced, and the development of options for minimizing manageable risks, will help to take into account the main threats to the implementation of an investment project.

Olga Senova , economics consultant Alt-Invest LLC

By identifying and analyzing project investment risks, the company tries to take into account the likelihood of negative consequences and the amount of lost profits. In business projects, they can be divided into two large groups:

Systematic project risks. These are the risks that cannot be influenced and managed, but are always present and taken into account in the business plan:

Political (political instability, socio-economic changes);

Natural and environmental (natural disasters);

Legal (instability and imperfection of legislation);

Economic risks (state measures in the field of taxation, restrictions or expansion of export-import, currency legislation, etc.).

The value of systematic risk is determined not by the specifics of an individual project, but by the general situation on the market. In those countries where it is developed, to determine the degree of influence of these threats, it is most often used coefficient b, which is calculated based on statistics for a specific industry or organization. In Russia, such data is not enough, therefore, as a rule, only expert assessments are used.

Unsystematic project risks. The CFO needs to pay special attention to them, since it is possible to manage them, which means minimizing the impact on the project. They are divided into several large blocks: production (non-fulfillment of planned work, deviation from the schedule of planned production volumes, etc.), financial (failure to receive the expected income from the project, problems with insufficient liquidity) and market risks (changes in market conditions, loss of market positions , price changes). In other words, these are threats that must be taken into account without fail.

The risk of non-receipt of income during the implementation of the project

During the implementation of the project, the risk of not receiving the expected income manifests itself in the form of a negative NPV or an excessively long payback period. This group of threats includes everything related to the forecast of cash flows in the operational phase.

How to reduce the financial risks of an investment project

Marketing risk can significantly affect the amount of revenue. This is due to the unfulfilled planned sales volume or a decrease in the previously determined sales price. Marketing risk assessment is especially relevant for projects when a new production is created or an existing one is expanded. Its impact is minimized with the help of market analysis, when key factors of influence are determined and predicted. These include changing market conditions, increased competition and loss of positions, reduced market capacity or product prices, and falling or no demand for goods.

Example
During the construction of a hotel, marketing risks primarily relate to two characteristics - price per room and occupancy. Suppose that the investor has determined the first indicator based on its location and class, and then the main factor of uncertainty will be the occupancy of the rooms. When analyzing the risks of the project, it is necessary to study the ability of the hotel to bring at least a minimum income with various loadings. The range of these data is taken from market statistics for similar properties. If the information could not be obtained, the minimum and maximum guests living in the rooms at the same time will have to be determined analytically.

The risk of growth in the production cost of products arises if the production costs exceed the planned indicators, thereby reducing the profit of the project. Therefore, in the business plan, it is necessary to analyze the costs, based on data from similar enterprises, to evaluate the cost and suppliers of raw materials (reliability, availability, the possibility of alternative purchases).

Example
If among the raw materials consumed during the implementation of the project there are agricultural products or a significant share of the cost is occupied by petroleum products, then it will be necessary to take into account that their prices depend not only on inflation, but also on specific factors (harvest, conjuncture on the energy market, etc. .). Often, the increase in raw material costs cannot be fully transferred to the price of products (for example, the production of confectionery or the operation of a boiler house), in which case it is necessary to study the dependence of project results on changes in cost.

Technological risks can also affect the profitability of a project when a company cannot achieve planned production volumes or control cost growth. Key factors include:

features of the applied technology, first of all, its replicability and the possibility of application in given conditions, compliance of raw materials with equipment, etc.;
dishonesty of the equipment supplier, that is, failure to meet delivery deadlines, supply of low-quality equipment, etc.;
the lack of an accessible service for servicing the purchased equipment, since the remoteness of the service departments can lead to downtime in production.

Example
In the business plan for the construction of a brick factory, when the building is already there, the sources of raw materials have been studied, and the turnkey production line is supplied by a well-known manufacturer, technological risks will be minimal. However, if the building has not yet been erected, the site for the extraction of raw materials (quarry) has not been developed, equipment will be purchased and installed on its own from different suppliers, the project becomes less stable. Then the external investor will most likely require additional guarantees or risk minimization (studying the situation with raw materials, attracting a general contractor, etc.).

The risk of exceeding the budget during the implementation of the project

A common situation is when the forecast budget at the end of the period has negative cash balances. The risks that determine this may arise both in the investment and in the operational phase for several reasons.

The risk of exceeding the project budget is perhaps the most common - more investments were required than planned. Its impact can be significantly reduced at the planning stage - compared with similar projects or industries, analyze the technological chain, take into account the required amount of working capital. It is also worth considering additional funding for unforeseen expenses. Even with careful investment planning, going over budget by 10 percent is considered the norm. If a loan is attracted for a project, it is advisable to negotiate with bankers to increase the limit.

The risk of non-compliance with the funding schedule, resulting in funds being received late or insufficiently, or being allocated on an overly rigid schedule that does not allow for deviations. The task of the business plan specialists is to reserve money in the company's accounts in advance (if the project is financed by its own funds) or to provide a flexible schedule for receiving money from the bank (if we are talking about debt financing).

The risk of a shortage of funds at the stage of reaching the design capacity may delay the work in the operational phase and slow down the achievement of the planned capacity. A similar problem arises when the financing of working capital has not been fully analyzed in the planning process.

The risk of a shortage of funds in the operational phase arises from the influence of internal and external factors that lead to a drop in profits and problems with repayment of obligations to creditors or suppliers. If the project is implemented with the help of borrowed funds, it is worth using the debt coverage ratio when building a loan repayment schedule. Its essence is that the possible fluctuation cash flow takes into account the expected market and economic situation. For example, with a coverage ratio of 1.3, a company's profits could be reduced by 30 percent while still being able to meet its obligations under a loan agreement.

Example
The construction of a business center can be attributed to a not very risky project, if we focus only on price fluctuations per square meter of leased space. However, a very different picture emerges when rental rates and the combination of income with payments are taken into account. A business center built using credit funds can easily go bankrupt due to a relatively short-term (compared to its lifetime) crisis. This is exactly what happened with many facilities, the start of which took place in 2008-2009.

The risk of delaying planned work in the investment phase, arising from organizational or other reasons, and, as a result, untimely or incomplete start of the operational stage. The negative effect can be minimized with the help of a qualified team of project managers, selection of reliable equipment suppliers, contractors.

In conclusion, it is worth noting that there are many classifications of risk. The specific option that will be used in the business plan is determined by the specifics of the project. Quite often there is a scientific approach and numerous complex descriptions, but you should not get carried away with this. It is more expedient to indicate exactly those potential problems that are most significant for a particular investment project.

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7.1. Basic concepts

Risk and uncertainty

Decision-making processes in project management occur, as a rule, in the presence of one or another measure of uncertainty, determined by the following factors:

incomplete knowledge of all parameters, circumstances, situations for choosing the optimal solution, as well as the impossibility of adequate and accurate accounting of all even available information and the presence of probabilistic characteristics of the behavior of the environment;

the presence of a random factor, i.e., the implementation of factors that cannot be foreseen and predicted even in a probabilistic implementation;

the presence of subjective factors of opposition, when decision-making takes place in a situation where partners play with opposite or non-coinciding interests.

Thus, the project is being implemented in conditions of uncertainty and risks, and these two categories are interrelated.

Uncertainty in a broad sense is the incompleteness or inaccuracy of information about the conditions for the implementation of the project, including the costs and results associated with them.

Risk- potential, numerically measurable possibility of unfavorable situations and related consequences in the form of losses, damages, losses, for example - expected profit, income or property, cash in connection with uncertainty that is, with an accidental change in the conditions of economic activity, unfavorable, including force majeure circumstances, a general drop in prices in the market; the possibility of obtaining an unpredictable result depending on the economic decision or action taken.

Let's take a closer look at the concept probability of risks - the probability that as a result of the decision there will be losses for the entrepreneurial firm, that is, the probability of an undesirable outcome. There are two methods for determining the probability of undesirable events: objective and subjective. The objective method is based on calculating the frequency with which one or another result was obtained under similar conditions. Subjective probability is an assumption about a particular outcome. This method of determining the probability of an undesirable outcome is based on the judgment and personal experience of the entrepreneur. In this case, in accordance with past experience and intuition, the entrepreneur needs to make a numerical assumption about the likelihood of events.

Risk measurement- determination of the probability of occurrence of a risk event. When evaluating the risks that the project team and the project investor are able to take on during its implementation, they proceed primarily from the specifics and importance of the project, from the availability of the necessary resources for its implementation and the possibilities of financing the likely consequences of risks. The degree of acceptable risks, as a rule, is determined taking into account such parameters as the size and reliability of investments in the project, the planned level of profitability, etc.

Quantitatively uncertainty implies the possibility of a deviation of the result from the expected (or average) value, both up and down. Accordingly, it is possible to clarify the concept of risk - this is the probability of losing part of the resources, shortfall in income or the appearance of additional costs, and (or) the opposite - the possibility of obtaining significant benefits (income) as a result of the implementation of certain purposeful activities. Therefore, these two categories that affect the implementation of an investment project should be analyzed and evaluated jointly.

Thus, risk is an event that can occur under conditions of uncertainty with some probability, while three economic outcomes are possible (estimated in economic, most often financial indicators):

negative, i.e. damage, loss, loss;

positive, i.e. benefit, profit, gain;

zero (neither damage nor benefit).

The nature of uncertainty, risks and losses in the implementation of projects is primarily associated with the possibility of incurring financial losses due to the predictive, probabilistic nature of future cash flows and the implementation of the probabilistic aspects of the project and its many participants, resources, external and internal circumstances.

Management of risks

Project management implies not only a statement of the fact of the presence of uncertainty and risks and an analysis of risks and damages. Project risks can and should be managed. Management of risks - a set of methods for analyzing and neutralizing risk factors, combined into a system of planning, monitoring and corrective actions.

Risk management is a project management subsystem, the structure of the subsystem is presented below.

Management of risks:

Identification and identification of perceived risks;

Risk analysis and assessment;

Choice of risk management methods;

Application of selected methods and decision-making under risk conditions;

Response to the onset of a risk event;

Development and implementation of risk mitigation measures;

Monitoring, analysis and evaluation of actions to reduce risks and development of solutions.

Risk Management Methods

Development and implementation of risk management strategy

Risk compensation methods, including forecasting the external environment of the project, marketing projects and project products, monitoring the socio-economic and legal environment and creating a system of project reserves;

Methods of risk distribution, including the distribution of risks over time, the distribution of risks between participants, etc.;

Risk localization methods used for high-risk projects in a multi-project system, implying the creation of separate special units for the implementation of especially risky projects;

Methods of avoiding risks, including the rejection of risky projects and unreliable partners, risk insurance, and the search for guarantors.

Identification and identification of perceived risks- systematic identification and classification of events that can adversely affect the project, i.e., in fact, the classification of risks.

Risk classification- a qualitative description of the risks on various grounds.

Risk Analysis - procedures for identifying risk factors and assessing their significance, in essence, an analysis of the likelihood that certain undesirable events will occur and adversely affect the achievement of project objectives. Risk analysis includes risk assessment and methods for reducing risks or reducing the adverse effects associated with them. At the first stage, the relevant factors are identified and their significance is assessed.

Risk assessment- this is a quantitative or qualitative determination of the magnitude (degree) of risks. A distinction should be made between qualitative and quantitative risk assessment.

Qualitative assessment can be relatively simple, its main task is to determine the possible types of risks, as well as factors affecting the level of risks when performing a certain type of activity.

Quantification risk is determined through:

a) the probability that the result obtained will be less than the required value (planned, planned, predicted);

b) the product of the expected damage by the probability that this damage will occur.

Risk assessment methods include the following:

Quantitative risk assessment using methods of mathematical statistics.

Methods of expert risk assessment.

Risk simulation methods.

Combined methods, which are a combination of several separate methods or their individual elements.

The sequence of work on risk analysis:

Selection of an experienced team of experts;

Preparation of a special questionnaire and meetings with experts;

Choice of risk analysis technique;

Establishment of risk factors and their significance;

Creation of a risk action mechanism model;

Establishing the relationship between individual risks and the cumulative effect of their impact;

Consideration of the results of risk analysis - usually in the form of a specially prepared report (report).

Risk Mitigation Methods include:

Distribution of risks between project participants;

Risk insurance;

Reservation.

Distribution (withdrawal, transfer, transfer) of risks - the act of transferring, in whole or in part, risks to another party, usually through some form of contract.

Risk insurance is a relationship to protect the property interests of individuals and legal entities in the event of certain events (insurance of events) at the expense of monetary funds formed from the insurance premiums (insurance premiums) paid by them.

Reservation- a method of reserving funds to cover damage, unforeseen expenses in the event of risk events.

7.2. Project risk analysis

Essence of project risk analysis

The analysis of project risks begins with their classification and identification, that is, with their qualitative description and determination of what types of risks are inherent in a particular project in a given environment under existing economic, political, and legal conditions.

Project risk analysis subdivided into qualitative(a description of all anticipated risks of the project, as well as a cost estimate of their consequences and mitigation measures) and quantitative(direct calculations of changes in project efficiency due to risks).

The analysis of project risks is based on risk assessments, which consist in determining the magnitude (degree) of risks. Methods for determining the criterion for quantitative risk assessment include:

statistical evaluation methods based on the methods of mathematical statistics, i.e. dispersion, standard deviation, coefficient of variation. To apply these methods, a sufficiently large amount of initial data and observations is required;

methods of expert assessments based on the use of expert knowledge in the process of project analysis and taking into account the influence of qualitative factors;

analogy methods based on the analysis of similar projects and the conditions for their implementation to calculate the probabilities of losses. These methods are used when there is a representative basis for analysis and other methods are unacceptable or less reliable, these methods are widely practiced in the West, since in the practice of project management, project evaluations are practiced after their completion and significant material is accumulated for subsequent use;

combined methods include the use of several methods at once.

Methods for constructing complex probability distributions (decision trees), analytical methods (sensitivity analysis, break-even point analysis, etc.), and scenario analysis are also used.

Risk analysis is the most important stage in the analysis of an investment project. As part of the analysis, the problem of reconciling two practically opposite aspirations is solved - whether maximizing and minimizing project risks.

The result of the risk analysis should be a special section of the business plan of the project, including a description of the risks, the mechanism of their interaction and the cumulative effect, measures to protect against risks, the interests of all parties in overcoming the danger of risks; assessment of the risk analysis procedures performed by the experts, as well as the initial data used by them; a description of the risk distribution structure between the project participants under the contract, indicating the stipulated compensation for losses, professional insurance payments, debt obligations, etc.; recommendations on those aspects of risks that require special measures or conditions in the insurance policy.

Qualitative risk analysis

One of the areas of investment project risk analysis is a qualitative analysis or risk identification.

A qualitative analysis of project risks is carried out at the stage of developing a business plan, and a mandatory comprehensive examination of an investment project allows preparing extensive information for analyzing its risks.

The first step in risk identification is to specify the risk classification in relation to the project being developed.

In risk theory, there are concepts factor a(causes), type of risk and type of loss(damage) from the occurrence of risky events.

Under factors(reasons) risks understand such unplanned events that can potentially come true and have a deflecting effect on the intended course of the project, or some conditions that cause uncertainty in the outcome of the situation. At the same time, some of these events could have been foreseen, while others could not have been predicted.

Type of risks - classification of risk events according to the same type of reasons for their occurrence.

Type of loss, damage- classification of results of realization of risk events.

Thus, it is possible to clarify the relationship between the main risk characteristics:

Risk Factors

Uncertainty in the implementation of factors and their unpredictability

Risk (risk event)

Losses (Damage)

Risk analysis is carried out in terms of:

origins, causes of this type of risks;

probable negative consequences caused by the possible realization of this risk;

specific predictable measures to minimize the risk under consideration.

The main results of a qualitative risk analysis are:

identification of specific risks of the project and their causes;

analysis and cost equivalent of the hypothetical consequences of the possible implementation of the noted risks;

proposal of measures to minimize damage and, finally, their cost estimate.

In addition, at this stage, the boundary values (minimum and maximum) of a possible change in all factors (variables) of the project, checked for risks, are determined.

Quantitative risk analysis

The mathematical apparatus of risk analysis is based on the methods of probability theory, which is due to the probabilistic nature of uncertainty and risks. Tasks of quantitative risk analysis are divided into three types:

straight lines, in which the risk level is assessed on the basis of a priori known probabilistic information;

reverse, when an acceptable risk level is set and the values (range of values) of the initial parameters are determined, taking into account the established restrictions on one or more variable initial parameters;

tasks of studying the sensitivity, stability of effective, criterion indicators in relation to the variation of the initial parameters (probability distribution, areas of change of certain values, etc.). This is necessary due to the inevitable inaccuracy of the initial information and reflects the degree of reliability of the results obtained in the analysis of project risks.

Quantitative analysis of project risks is carried out on the basis of mathematical models of decision-making and project behavior, the main of which are:

stochastic (probabilistic) models;

linguistic (descriptive) models;

non-stochastic (game, behavioral) models.

In table. 7.1 shows the characteristics of the most used risk analysis methods.

Table 7.1

	Method characteristic
Probabilistic analysis	It is assumed that the construction and calculations of the model are carried out in accordance with the principles of probability theory, while in the case of sampling methods, all this is done by calculations on samples risk ratio (the ratio of expected profit to the volume of all investments in the project)
Expert risk analysis	The method is used in the absence or insufficient amount of initial information and consists in attracting experts to assess risks. A selected group of experts evaluates the project and its individual processes according to the degree of risk
Analog method	Using a database of implemented similar projects to transfer their effectiveness to the project under development, this method is used if the internal and external environment of the project and its analogues has sufficient convergence in key parameters
Point level analysis	Determining the degree of sustainability of the project in relation to possible changes in the conditions for its implementation
project sensitivity	The method allows you to evaluate how the resulting indicators of the project implementation change with different values of the given variables necessary for the calculation
Analysis of project development scenarios	The method involves the development of several options (scenarios) for the development of the project and their comparative assessment. The pessimistic variant (scenario) of a possible change in variables, the optimistic and the most probable variant are calculated
Method for constructing project decision trees	Assumes a step-by-step branching of the project implementation process with an assessment of risks, costs, damages and benefits
Simulation Methods	They are based on a step-by-step finding of the value of the resulting indicator by conducting multiple experiments with the model. Their main advantages are the transparency of all calculations, the ease of perception and evaluation of the results of the project analysis by all participants in the planning process. As one of the serious disadvantages of this method, it is necessary to indicate the significant costs of calculations associated with a large amount of output information.

7.3. Risk Mitigation Methods

All methods to minimize project risks can be divided into three groups:

1. Diversification, or risk sharing(distribution of the enterprise's efforts between activities, the results of which are not directly related to each other), which allows to distribute the risks between the project participants. The distribution of project risks among its participants is an effective way to reduce it. Reliability theory shows that with an increase in the number of parallel links in the system, the probability of failure in it decreases in proportion to the number of such links. Therefore, the distribution of risks between the participants increases the reliability of achieving the result. In this case, it is most logical to make responsible for a specific type of risk that of its participants, which has the ability to more accurately and better calculate and control this risk. The distribution of risks is formalized during the development of the financial plan of the project and contract documents.

Risk allocation is actually implemented in the process of preparing the project plan and contract documents. It should be borne in mind that an increase in risk for one of the participants must be accompanied by an adequate change in the distribution of project revenues. Therefore, when negotiating it is necessary:

determine the capabilities of project participants to prevent the consequences of the occurrence of risk events;

determine the degree of risk that each project participant undertakes;

agree on an acceptable reward for risks;

monitor compliance with parity in the ratio of risks and income between all project participants.

2.Reservation of funds Contingency is a risk management strategy that balances the potential risks that affect the cost of a project against the costs required to overcome project disruptions.

The value of the reserve must be equal to or greater than the value of fluctuations in system parameters over time. In this case, the costs of reserves should always be lower than the costs (losses) associated with failure recovery. Foreign experience allows an increase in the cost of the project from 7 to 12% due to the reservation of funds for force majeure. Reservation of funds provides for the establishment of a relationship between potential risks that change the cost of the project, and the amount of costs associated with overcoming violations during its implementation.

Table 7.2. Contingency reserve provisions

Cost type	Change in contingencies,%
Costs / duration of work of Russian contractors
Costs / duration of work of foreign contractors
Increase in direct production costs
Decrease in production
Increasing the interest on a loan

Minimizing risks always increases project costs, but it also increases project profits.

Part of the reserve should always be at the disposal of the project manager (the rest of the reserve is managed, in accordance with the contract, by other project participants).

A necessary condition for the success of the project is the excess of the estimated income from the implementation of the project over the cash outflows at each calculation step. With the aim of reduce risks in terms of financing it is necessary to create a sufficient margin of safety, taking into account the following types of risks:

risk of construction in progress (additional costs and lack of income planned for this period);

the risk of a temporary decrease in the volume of sales of the project's products;

tax risk (inability to use tax incentives and benefits, changes in tax legislation);

the risk of late payment of debts by customers.

When calculating risks, it is necessary that the balance of accumulated real money in the financial plan of the project at each calculation step be at least 8% of the costs planned at this step. In addition, it is necessary to provide for additional sources of project financing and the creation of reserve funds with the deduction of a certain percentage from the proceeds from the sale of products.

3.Risk insurance. If the project participants are unable to ensure the implementation of the project in the event of a risk event on their own, it is necessary to carry out risk insurance. Risk insurance is, in essence, the transfer of certain risks to an insurance company.

Foreign practice of insurance uses full insurance of investment projects. The conditions of Russian reality allow so far only partially insure project risks: buildings, equipment, personnel, some extreme situations, etc.;

Choosing a rational insurance scheme is a rather difficult task. Consider the main provisions of this method of reducing risks.

Rosstrakhnadzor Order No. 02-02/08 dated May 19, 1994 approved the Classification by type of insurance activity, which provides for insurance of financial risks by an agreement providing for the insurer's obligations for insurance payments in the amount of full or partial compensation for loss of income (additional expenses) of a person caused by the following events :

stoppage of production or reduction in production as a result of specified events;

job loss (for individuals);

bankruptcy;

unforeseen expenses;

non-performance (improper performance) of contractual obligations by the counterparty of the insured person who is the creditor under the transaction;

court costs (expenses) incurred by the insured person;

other events.

The concept of entrepreneurial risk has been introduced in the legislation of the Russian Federation. Business risk insurance involves the conclusion of a property insurance contract, under which one party (the insurer) undertakes, for the fee stipulated by the contract (insurance premium), upon the occurrence of an event (insurance event) provided for in the contract, to compensate the other party (the insured) or another person in whose favor the contract is concluded (to the beneficiary), losses caused as a result of this event in the insured property or losses in connection with other property interests of the insured (to pay insurance compensation) within the amount (sum insured) specified by the contract.

Under a property insurance contract, in particular, the following property interests may be insured:

risk of loss (destruction), shortage or damage to certain property;

the risk of liability for obligations arising as a result of causing harm to life, health or property of other persons, and in cases provided for by law, also liability under contracts - the risk of civil liability;

the risk of losses from entrepreneurial activities due to a breach of their obligations by counterparties of the entrepreneur or changes in the conditions of this activity due to circumstances beyond the control of the entrepreneur, including the risk of not receiving expected income - entrepreneurial risk.

When concluding a business risk insurance contract, the insurer has the right to analyze the risks, and, if necessary, appoint an examination.

When insuring business risk, unless otherwise provided by the insurance contract, the sum insured must not exceed the losses from entrepreneurial activities that the insured would be expected to incur in the event of an insured event.

For real investments there is insurance and not only against financial losses. A construction contract may provide for the obligation of the party, which bears the risk of accidental loss or accidental damage to the construction object, material, equipment and other property used in construction, or liability for causing damage to other persons during construction, to insure the corresponding risks.

Deductions for business risk insurance can be included in the cost of production. So, the cost of products (works, services) includes: payments (insurance premiums) for voluntary insurance of means of transport (water, air, land), property, civil liability of organizations - sources of increased danger, civil liability of carriers, professional liability, voluntary insurance from accidents and illnesses, as well as health insurance.

It is allowed to create insurance reserves or insurance funds for all enterprises and organizations to finance expenses caused by business and other risks, as well as those related to insurance of property, life of employees and civil liability for causing damage to the property interests of third parties. A limit on deductions for these purposes has also been established: it cannot exceed one percent of the volume of products (works, services) sold.

Effectiveness of risk mitigation methods is determined using the following algorithm:

the risk that is of greatest importance to the project is considered;

overspending is determined taking into account the probability of an adverse event;

a list of possible measures aimed at reducing the likelihood and danger of a risk event is determined;

additional costs for the implementation of the proposed measures are determined;

the required costs for the implementation of the proposed measures are compared with the possible cost overrun due to the occurrence of a risk event;

a decision is made on the implementation or refusal of anti-risk measures;

the process of comparing the likelihood and consequences of risk events with the costs of mitigation measures is repeated for the next most important risk.

7.4. Organization of work on risk management

A comprehensive study of various risks at the project development stage using the system of approaches and methods presented in the previous sections is undertaken not only for the purpose of analyzing project risks at the beginning of the project life cycle. The conclusions drawn on the basis of such a study provide significant assistance to the project manager at the stage of its implementation, since the analysis of project risks should not be limited only to a statement of the fact of their presence and a settlement and recommendation conclusion at the stage of developing a project business plan. Mandatory continuation and development of the analysis of project risks is their management at the stage of implementation and operation of the project.

Risk management is a specific area of management that requires knowledge in the field of company theory, insurance business, analysis of the economic activity of an enterprise, mathematical methods for optimizing economic problems, etc.

The risk management system is a special type of activity aimed at mitigating the impact of risks on the final results of the project. Risk management is a new phenomenon for the Russian economy, which appeared during the transition of the economy to a market economy system.

Risk management is carried out at all phases of the project life cycle through monitoring, control and necessary corrective actions.

The risk management process involves the implementation of certain steps, including:

identification of perceived risks;

analysis and assessment of project risks;

choice of risk management methods;

application of selected methods;

evaluation of risk management results.

Risk analysis of an investment project involves an approach to risk not as a static, unchanging, but as a controlled parameter, the level of which can and should be influenced. This leads to the conclusion that it is necessary to influence the identified risks in order to minimize or compensate them. The so-called concept of acceptable risk is aimed at exploring these possibilities and the associated methodology.

The concept of acceptable risk is based on the assertion that it is impossible to completely eliminate potential causes that may lead to an undesirable development of events and, as a result, to a deviation from the chosen goal. However, the process of achieving the chosen goal can take place on the basis of making such decisions that provide a certain compromise level of risk, called acceptable. This level corresponds to a certain balance between the expected benefit and the threat of losses and is based on serious analytical work, including special calculations.

As applied to investment design, the concept of acceptable risk is implemented through the integration of a set of procedures - project risk assessment and project risk management.

Characterizing in general the entire arsenal of project risk management methods, it is necessary to emphasize their specific practical orientation, which allows not only to select and rank risk factors, but also to model the project implementation process, assess with a certain probability the consequences of adverse situations, select methods to minimize their impact or propose risk-compensating measures, monitor the dynamics of the behavior of the actual parameters of the project in the course of its implementation, and, finally, correct their change in the right direction. The goal of project risk management not only contributes to the deepening of project analysis, but also improves the efficiency of investment decisions. The role of the main executor of all procedures related to risk management falls on the shoulders of the project manager (administrator) or the team with his participation.

Project risk management methods can and should become a means of effective implementation of the projects themselves at all levels of government - federal, regional and local.