How would you go about estimating the risk factors for a giv

How would you go about estimating the risk factors for a given business model? Are there generic risk factors that are applicable to all types of businesses? Why or why not?

Solution

One has to understand the factors business model is sensitive to. List down all the factors you can think of which in some way or the other affect the business model. One by one assume worst or bst change in that factor, does your business model get affeceted? If yes, this is a risk factor. Some factors are generic but some are industry and company dependent. Generic factors-raw material availability & prices, economy, regulatory and legal environment. This is because different industry reacts to same things differently for example rise in coffee production might lead to lower tea demand because coffee would become cheap and hence people would substitute coffee for tea.