Assessing both internal and external risks means thinking through the probability of project success or failure and the subsequent results of any or all tasks involved in the project. How likely is it that task A will set you behind schedule? Will the need to add more resources to complete that task put you over budget? How likely is it that task A will be hazardous to the company or the neighborhood?

During the initial planning stage of the project, you are assessing risk each time you assign a completion date or a budget figure. If, for example, you plan to move the office but aren't sure whether to select June or July for the move, you will assess the possibilities of moving in either month and choose the one in which you have the greater likelihood of a successful, cost-efficient, and time-efficient move. From an internal or technical perspective, you need to determine in which month you will have the resources and the budget to complete the project successfully. From an external or safety perspective, you will determine in which month the move will be least likely to interfere with the overall workings of the company and its ability to conduct business. Assessing the risk as you plan your project will add up to this overall determination. Granted, most tasks on most projects have little external risk, but it's well worth keeping such risks in mind.

You may also face a quality risk. The project may be proceeding on schedule and within budgetary constraints, but the product may be inferior to what you were originally seeking. It may not be as easy to determine such risks to the quality of the final deliverables as it is to see what might set you behind schedule or cost more than your budget allows. Inexperienced personnel, poor equipment, dated software products, poor internal communications, and similar factors raise the level of risk that you may not produce the quality that you had hoped for.

For example, a popular freelance writers' Web site has writers bid against one another for writing assignments. The site does not set minimum bids, and ultimately some inexperienced young writer will end up winning a job that should pay $1,000 for a professional writer, because he or she is willing to do it for $100 to get his or her foot in the door. The company accepting an amateur for a job that should have a professional is taking a tremendous quality risk. Often, they find themselves hiring a writer for $1,200 to do a rush-job rewrite because the original work was substandard. Of course, the flip side is that the young new writer could have fresh ideas and this could be his or her big break. The big question: Are you willing to take a risk this big with your project's quality?