

                                   Risk

     [] This table shows an example of how risk may be evaluated, where it
     stems from, and which areas are most dangerous.  It allows you to
     compare your exposure, given various assumptions.  The "weights"
     shown in the table below are arbitrary samples.  You should adjust
     the weights to reflect how elements of risk affect your
     your business.  The Overall Risk should always total 1.0.

     []The example shows a relatively new company in a growing, yet new
     industry with an excellent management team, although they haven't
     enjoyed a lot of success [in this industry?] The most important
     variables, however, are the industry and position within that industry.
     The assumptions play the next important role -- this is saying that a
     lot is riding on their assumptions.


Elements                   Degree of Risk
of Risk
--------------------------------------------------------------------------
                   Low     Medium      High     Weight    Total
--------------------------------------------------------------------------
Industry                   5                   .25        1.25

Maturity                   5                   .05        0.25

Competitive
Position           1                           .25        0.25

Strategy           1                           .05        0.05

Assumptions                            10      .20        2.00

Management         1                           .10        0.10

Past Performance           5                   .10        0.50

                            Overall Risk       1.00       4.40


Rationale

     [] Fill in appropriate information.

Industry: Company must stay competitive as business matures.

Maturity: In the mature stages there are likely to be competing
models/companies.

Competitive Position: The market is wide open.  Few competitors.

Strategy: Product/service, price distribution, promotion strategies are
straight forward.

Assumptions: Sales forecasts for new products/services are difficult to
predict.  Product/service acceptance is good -- sales estimates are
considered conservative.

Management: Careful planning and clear objectives should not present much
risk.

Past Performance: NA
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