Critical Risks

A. External

1. Copy Cat: It is possible other companies may try to copy the installation method used
as well as attempt to contract with similar manufacturers overseas who produce the film due to
the fact there are multiple manufacturers. The most likely identified companies to do so are
installers of window tint because conversion and or integration costs are relatively low because
of the similarities of tools, installation process and intellectual knowledge.
2. Market conditions: This will be susceptible to change as competitors enter the
industry and attempt to gain part of the previously untouched market share. Market changes
may also occur as customer perceptions of the product changes in either a positive or negative
way.
3. Technology: The product smart film is rapidly becoming more advanced allowing for
the manufacture of thinner films, lower power requirements and longer life spans. This creates a
risk if our supply contract is not currently with the company that comes out with the new line of
smart film. Furthermore, new product innovation may deem smart film no longer necessary or
feasible.
4. Acts of Nature contract: Costs such as loss of revenue and reconstruction may be
incurred unless we decide to add policy extensions such as extra expense coverage.
5. Government Regulation: Currently there is so standards or regulation, however as
the industry grows regulation attempts may be imposed.

B. Internal Risks

1. Employee Fraud/Theft: Possible scenarios may occur when management is

unaware of employee dishonesty that can result in financial loss.
2. Management Discrepancies: Decision making in relation to spending, budget
allocation and direction of company may differ between founders of the company causing
confusion and inefficiencies.
3. Equipment Breakdown: Unforeseen breakdown of equipment because of wear and
tear or user error can result in financial loss and setbacks.
4. Wholesale agreements: We make it a point to work as much as possible with ISO
certified distributors but they may violate contracts and or agreements. ISO standards are
unfortunately not enforceable by law so lost revenue due to this scenario would not be
recoverable.
5. No Operating History: Inefficiencies are likely during inception of the company
because there is currently no standards or proven operating methods available.
6. Financial Projections: Projections may differ from stated as business increases or
decreases. The supply costs may also rise if the demand increases for any unforeseen reasons.
8. Insurance: The lack of insurance may be a problem in an instance of an incident not
currently covered by the policy.

C. Insurance Previsions
 1. BOP - The company will be covered by a Business Owners Policy that includes
property and liability coverage. In a general outline, the coverage includes but is not limited to
the following:
a. Property insurance - protects building, equipment and inventory.
b. Business Income insurance - which protects from losses that occur when operations are
suspended because of a covered loss.
c. Bodily Injury and Property Damage Liability - in the event employees, products or services
cause harm to other people or their property.
d. Personal and Advertising Injury - coverage for copyright infringements, libel, or slander.
e. Medical Payment Coverage - medical expenses resulting from injury to others on premises
owned or rented.
f. Hired Auto coverage - provides liability coverage for autos leased, hired or borrowed by the
insured.
g. Non-owned Auto coverage - provides liability for employees using their personal auto in the
business of an insured.
h. Equipment Breakdown Coverage - which will protects equipment if damage occurs from
power surges, mechanical breakdown, burnout or operator error.

D. Contingency Plan

1. In the case too many competitors try to copy our business model we will approach
them with the offer to train them with proper methods for a fee and licenses them under our
name. We will then also sell the product to them at an increased price. Other methods would be
to begin to sell franchises.
2. In the case of significant employee fraud or theft and if insurance provisions do not
cover the specific incident the employee will be held fully responsible and legal actions will be
taken to the full extent to recover any financial loss.
3. In the case our main supplier cancels or breaches contract, we will have multiple
suppliers on standby in which an agreement has already been reached and only a signature will
be required to reopen the supply channel.
4. In the case an incident occurs that is not covered under insurance, management will
meet to discuss the severity of potential loss and decide if operations are economically
repairable taking into the financial standing of the company at the time of the loss. If a total loss
decision is decided upon, all assets will be liquidated to pay any current debt and liabilities, the
remaining value will be split among owners/investors relevant to the level of involvement. If
assets do not fully cover all debt, chapter 7 bankruptcy will likely result.
5. In the case Government regulation suspends or shuts down business, the cost
associated with following government regulation and/or reopening will be assessed in the same
fashion as outlined in the case 4 above.
6. In the case of an unforeseen risk or occurrence not listed which may result in
catastrophic losses, additions to the contingency plans will be added as deemed necessary by
upper level management/owners and investors in relation to their involvement.