Risk Management Plan

Project Name

Yolo Coffee Shop

Project Manager

Michael Smith

Prioritization

High

Owner(s)

Yolo Dairy

Start Date:

20/03/2014

Scheduled Completion Date:

20/05/2014

Mission/ Purpose

What is your project going to accomplish? How does this project relate to overall goals and objectives of the company? Is it part of a program or larger project?

The new coffee shop will offer market for our own Yolo milk from the diary farm. The main goal of the Yolo Diary is to ensure maximum daily sales of milk. Therefore, a considerable amount of milk would be used in our coffee shop everyday hence increase in the sales.

SOW

What will this project create? What is the product of the project? At a high level, how do you plan on doing the work of the project? What are the high-level deliverables for this project?

This project will create high-quality coffee products and complementary services. The product of the project is coffee. The work of the project will be organized in a way that will allow maximizing the companys profits and the level of consumers satisfaction.

Major project deliverables

Deliverable Description

The initiation

(Submitting the project charter)

Meeting the project owner for submission

Discussions and analysis for clarity

Making necessary changes on document

Signing of project contract

The planning

(Division of duties)

Each team to receive its allocations and prices

Teams to plan work as per time and budget

The execution

Each team to carry out their assignment

Monitoring the implementations to ensure they

lie within time and budget

Ensure the work is satisfactory to the owner.

Objectives

What objectives, if any, of the company is this project designed to meet?

Offer the best customer service in town hence increase the companys publicity;

By the end of the year, the coffee shop should be able to hit 30% of the total milk sales.

Business Need

Why should we do this project? What will be gained, changed, or modified? Is there a financial or business reason to do this project? This area should contain any feasibility studies, NPV, PI, PB, or PBD used to advance the project.

The coffee shop will offer market for the milk. The company aims to make 30% of its sales in this coffee shop. The preliminary idea was to start a milk supply shop. A feasibility study was done on the PI. It was discovered that consumers in this town prefer ready made coffee to milk hence the idea of a milk supply shop was further developed into a coffee shop. The coffee shop is therefore a marketing strategy for the Yolo Dairy to help increase the daily sales, increasing the companys profits to the desired percentage. The coffee shop will also act as an advertisement medium.

Project Manager and Stakeholders

Who will lead this project? Who are the major stakeholders?

Position Name/ Title/ Company Email/ Phone

Sponsor Yolo Dairy yolod@org.co.ke

Project manager Michael Smith msmith@gmail.com

Sales representative John James jjul@gmail.com

Milestones

What are the key milestones dates associated with the project?

Note: Target date is 20/05/2014

Key milestone Date

Project start 20/03/2014

Acquire the target space/shop 25/03/2014

Renovations and modifications 05/04/2014

Wall painting 10/04/2014

Interior designing (Gheo touch) 14/04/2014

Purchase furniture 20/04/2014

Install shelves and tables 05/05/2014

Complete layout of the shop 15/05/2014

Purchase kitchen utensils 16/05/2014

Recruit staff 18/05/2014

Sign off 19/05/2014

Official opening of shop 20/05/2014

Budget

What is the order-of-magnitude budget for this project?

Order of magnitude budget/Budget Estimate

Purpose Amount

Rent(6 months) $3,000

Legal fees $1,000

Renovation $5,000

Interior design $10,000

Labor $25,000

Furniture $100,000

Utensils $35,000

Contingency allowance $10,000

Business insurance (p/a) $1,000

Miscellaneous $1,000

Total estimate budget $191,000

User Acceptance Criteria/Quality

What are the minimum success criteria as defined by the key stakeholders?

The space that is planned to be rent is a thousand square feet with all the space free for the desired modifications and design. The space can accommodate about fifty comfortable seats. The target customers are the local ones.

High-Level Project Assumptions

What are the assumptions on which the project is based?

The project will be completed on 19/05/2014 and start running on 20/05/2014

There will be no legal issues to deal with in the renting of the property

The project will stay in the budget

The coffee shop will sell only coffee

Readily available market

High sales will be achieved

Consumers will be the local people in town

Employ experienced staff

High-Level Project Constraints

What are the major limiting factors that affect the project?

The project must end by 20/05/2014 if the anticipated yearly sales are made

The furniture is to be acquired on order hence stress on time

The interior designer is only available for a week as from 14th

Might not get experienced staff

If the license will be approved or declined

Exclusions and Boundaries

What are the boundaries of the project? What is to be included and what is to be excluded from the project?

The scope of the project

The coffee shop project involves starting of a new coffee shop in town. The Yolo Dairys vision is to make the place an effective high sale joint for the milk product as well as offering the best customer service in town. The project includes several tasks.

In scope (included):

Acquiring of new space/shop

Renovations and shop modifications

Wall painting and interior designing

Purchases e.g. furniture and utensils

Installation of shelves and tables

Staff recruitment

Out scope (excluded):

Staff training

Staff payments

Major Risks

What are the major risks affecting the project?

Overrun costs

Unavailability of immediate labor

Changes in consumers demand

Delays in furniture delivery

Tougher competition than it was expected

Higher costs of resources

Low profitability

Inadequate level of employees qualification

High season vulnerability

Low quality of complementary services

The Project Priority Matrix is presented in Table 1.

Table 1.

The Project Priority Matrix

Constrain

Enhance

Accept

Scope

X

Time

X

Budget

X

Thus, the scope of the project should be accepted. Time should be enhanced as the selected period of time may not be sufficient for completing all abovementioned functions. The budget should be constraints as the level of profitability may be lower than it is expected.

The risk scoring template is presented in Table 2 (in relation to overrun costs).

Table 2.

The Risk Scoring Template

Project Objective

Relative or Numerical Scales

Very Low - 1

Low - 2

Moderate - 3

High - 4

Very High - 5

Cost

X

Time

X

Scope

X

Quality

X

The risk management analysis of all abovementioned risks is presented in Table 3.

Table 3.

The Risk Management Analysis

RISK EVALUATION

Risk

Probability

Cost

Schedule

Scope

Quality

Risk Score

Tougher competition

30%

4

3

4

5

4,8

Lower profitability

20%

5

4

4

3

3,2

Changes in consumers' demand

30%

3

2

2

3

3,0

Unavailability of labor

20%

4

4

4

2

2,8

Higher costs of resources

30%

5

1

2

1

2,7

Inadequate level of qualification

20%

4

2

1

5

2,4

Overrun costs

10%

4

3

4

2

1,3

Delays in furniture delivery

20%

1

3

1

1

1,2

Low quality of complementary services

10%

1

1

1

4

0,7

High season vulnerability

10%

2

2

1

1

0,6

Thus, the main risks are associated with tougher competition than it was expected and lower profitability. These risk factors may significantly affect the ultimate results of the projects realization.

In order to minimize these risks, risk response matrix should be developed. It is presented in Table 4.

Table 4.

Risk Response Matrix

Risk Event

Response

Contingency Plan

Trigger

Person Responsible

Tougher competition

mitigate

strengthen one's competitive positions through additional diversification

the company's market share

Yolo Diary

Lower profitability

share

increase profits through permanent innovations

rate of profit

Yolo Diary

Changes in consumers' demand

accept

additional marketing research

the dynamics of sales

John James

Unavailability of labor

eliminate

reserves of immediate workforce

the demand for labor

Michael Smith

Higher costs of resources

transfer

diverdification of suppliers

average variable costs

Michael Smith

Inadequate level of qualification

mitigate

addiitonal trainings and courses

the level of consumers' satisfaction

John James

Overrun costs

transfer

optimize cost structure

average total costs

Michael Smith

Delays in furniture delivery

eliminate

insurance contracts that may eliminate these delays

period of delivery

Michael Smith

Low quality of complementary services

eliminate

constantly improve the quality of all complementary services

consumers' satisfaction

Michael Smith

High season vulnerability

mitigate

sales and brand promotion

the dynamics of sales

John James

KEY STAKEHOLDERS

Project Manager Authority Level

Name: Yolo Diary

Task:

I will be in charge of the team and all other tasks in the project by making sure that all the requirements are fulfilled under proper project specifications. I am permitted to approve all the expenditures to the maximum as allocated in the budget.

Project Core Team

Nelly Nelsons- Time/Risk Manager

Task:

Sees to it that all the project contracts and documents are properly prepared, accepted and implemented from the beginning to the end of the project, in time. She maintains the time plan and budget as well as offering administrative support.

Joshua Gant- Finances Manager

Task:

Prepares and maintains the budget. He defines the sources of funding and expenditure.

Jane Porter- Quality Manager

Task:

He is to keep track of the proceedings of the project and makes sure that all deliverables are submitted and reviewed in time.

Harry Henry- Procurement officer

Task:

In charge of all licensing issues. Will also contract administration services.

Subject Matter Experts (SMEs) (include company and channel designations if applicable)

Clarke & Sons

APPROVALS

Type Name

Signature

Date

Project Manager Approval:

3/16/2014

Customer/Sponsor Approval:

Yolo Diary

3/16/2014