AbstractThere is often a misconception that adopting and tailoring agile methods is straightforward resulting in improved products and increasingly satisfied customers. However, the empirical nature of agile methods means that potential practitioners need to carefully assess whether they are exposed to the risks that can make agile method adoption problematic. This is particularly the case with small software companies who are less able to absorb the impact of failed experimentation. This study describes a minimally intrusive assessment approach for small software companies preparing for agile method adoption and tailoring in the light of key risks. The approach has been conducted with six small software companies, three of which are presented to show the evolution of the approach, describe the resource commitment that companies have to make, and highlight the type of information generated from an assessment. The contribution of this study is that small software companies have an alternative to ‘mere experimentation’ with agile methods and can take reasoned steps towards their adoption and tailoring. Copyright © 2008 John Wiley & Sons, Ltd.