Imagine your business has taken on a major project — let's say to install wooden fencing around a new subdivision. You've planned everything out: your budget, your schedule and the resources you'll need. Sounds like a fool-proof plan — what could possibly go wrong?

Therein lies the problem: if you haven't planned for what could possibly go wrong, if something does go wrong, the results can be problematic. What if your lumber supplier has a lumberyard fire just before your delivery date? The odds of this happening are slim; however, managing risks to your project is about preparing for possible occurrences that are outside your project plan.

This is not to suggest that you fireproof the lumberyard. You want to prepare for the possible outcome: a problem with your supplier that ends up causing issues with your schedule and budget. How quickly can you get a new shipment of lumber, and how much will it cost you? What will you do with your displaced workers? One setback can often disrupt your entire project.

That's why it's vital for you to prepare for risk when you plan your project. By mapping out the potential problems that could arise during the course of your project and deciding how you will deal with such problems should they arise, you will be going in well-prepared.

You will want to tackle this task with all the major players involved in your project. If you're working with knowledgeable suppliers and skilled tradespeople, you can draw from their wealth of valuable experience. Try holding a group brainstorming session. By bringing everyone together, you can probably plan for many of the obstacles you might face. Once your group has listed all potential risks, the next step will be to determine how to deal with each problem.

A solid risk management plan can help you move forward with your project, confident in the knowledge that you won't easily be caught off guard. Keep in mind that risk management is just one of several important aspects of project management. For more information on managing your projects, visit our Project Management page.