RISK ANALYSIS - DRAFT
[For investor presentation - needs work]

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OPERATIONAL RISKS

Risk: Quality dilution across two locations
Probability: Medium
Impact: High
Mitigation:
- Hire and train manager 3+ months before opening
- Documented SOPs for all processes
- Weekly quality audits
- Mystery shopper program?
[TODO: Research mystery shopper services]

Risk: Key person dependency
Probability: Medium
Impact: High
Current state: Too much relies on me and Sarah
Mitigation:
- Cross-train staff
- Documented procedures
- Build management layer
- [Need more here]

Risk: Supply chain issues
Probability: Low-Medium
Impact: Medium
Mitigation:
- Multiple supplier relationships
- 2-week inventory buffer
- Local backup options

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FINANCIAL RISKS

Risk: Cost overruns during buildout
Probability: Medium-High (construction is unpredictable)
Impact: Medium
Mitigation:
- 15% contingency in budget
- Fixed-price contracts where possible
- Phased buildout if needed

Risk: Slower than projected ramp-up
Probability: Medium
Impact: Medium-High
Mitigation:
- Conservative projections (60-70% of L1 as baseline)
- 6 months operating capital reserve
- Sarah's condition: if not profitable in 18 months, close

Risk: Economic recession
Probability: ???
Impact: Medium
Mitigation:
- Coffee is relatively recession-resistant
- Diversified customer base (commuters + locals)
- Lease flexibility (negotiate out clause?)

[TODO: Add data about coffee consumption during 2008 recession]

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MARKET RISKS

Risk: New competitor enters market
Probability: High (it's Seattle)
Impact: Medium
Mitigation:
- Strong brand differentiation
- Community relationships
- First mover advantage in specific neighborhood

Risk: Changing consumer preferences
Probability: Low
Impact: Medium
Mitigation:
- Monitor trends
- Flexible menu
- Customer feedback loops

Risk: Remote work reversal (everyone back to office)
Probability: Low-Medium
Impact: Low
Why low impact: Actually might help - more commuters
[Actually need to think about this more]

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LOCATION-SPECIFIC RISKS

Crossroads location:
- Strip mall perception
- Anchor tenant could leave
- Less walkability

Main St Bellevue:
- High rent = less margin for error
- Competition density
- Parking issues

U District:
- Seasonality (summer slow)
- Student budget constraints
- Neighborhood safety perception

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PERSONAL/LIFESTYLE RISKS

Risk: Burnout
Probability: Medium-High
Impact: High
Mitigation:
- Hire strong manager
- Set boundaries
- Sarah and I spelled out conditions
- Build in personal time

Risk: Partner disagreement
Probability: Low
Impact: High (we're married!)
Mitigation:
- Aligned on conditions before proceeding
- Regular check-ins
- Written agreement on exit conditions

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RISK MATRIX (need to visualize this)

High Impact / High Probability:
- Quality dilution
- Cost overruns

High Impact / Low Probability:
- Partner issues
- Major recession

Low Impact / High Probability:
- New competitor
- Minor delays

Low Impact / Low Probability:
- Supply chain
- Preference shifts

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OVERALL RISK ASSESSMENT:

Manageable if we:
1. Hire right manager
2. Maintain financial reserves
3. Stay disciplined on quality
4. Keep communication open

Unacceptable if:
- We skip manager hiring
- We drain reserves for buildout
- We let timeline pressure compromise decisions

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[TODO: Make this less listy and more narrative for presentation]
[TODO: Add specific numbers where possible]
[TODO: Have Greg review financial risk section]
