1. Risks
Risk is regarded as any untoward circumstances that may arise during the operation of a business or project. Such hurdles might compromise several aspects of the business including schedule, products and services, resources and profitability. The prevalence of risks in business might also emerge when something planned failed to deliver the expected outcomes. In addition, the lack of precision or uncertainty constitutes the same effect when something comes to pass that might threaten the business momentum. Van mobile food service for instance faces risk of food contamination according to the NSW Food Authority (2002) guidelines for mobile food vending. Such risk may interfere with the business and might entail several complications including customer complaints due to resulting health complications leading to legal actions.
1.1. Risks
The following risks are identified according to their significance and impact to the Van mobile food service.
Regulatory - The Food Act of 2006 stipulates standard codes that food business operators need to adhere upon before acquiring licenses to operate (Tablelands Regional Office, 2010). The legislation also outlines the mandatory process that the applicant needs to undergo in accordance to the Food Standard Codes for safety. The provision of the law states the interpretation and application (S.3.1.1), general requirements and safety practices (S.2.2) and food premises and equipment (S.3.2.3) (Tablelands Regional Office, 2010). These compliances are mandated in the Australian Standard 4674 or the fit-out, design and construction of the food premises to ensure that the business is well suitable for its purpose (Randwick.nsw.gov.au, n.d.). The possible regulatory risk that “Serve a Mate” could possibly be facing is the non-compliance to the Australian Standard 4674. This is because; the van that will be used for “SAM” might not meet the prescribed standards of the law. This problem can be mitigated by ensuring that the layout for the Van customization has been submitted to the Food Authority for approval prior to the construction.
Strategic – External and environmental risks are also eminent in the Van mobile food service such as “SAM”. One of which is the natural calamity that might strike the business operation and totally put it into halt. Such vulnerability may not only affect the operations of the business, but would also reflect on profitability and severe losses. For instance, heat waves, fires, cyclones, drought and fire frequent the city of Melbourne (Mercer, 2009), since “SAM” will be stationed near Victoria University in Melbourne VIC, it is apparent that the food van would also be exposed to the natural circumstances. As a precautionary measure, it would be best to have a talk with the University administrator to allow the Van to take refuge in an enclosed parking lot within the school grounds during instances of calamities. In addition, the Van should also be scheduled for regular maintenance check to determine any anomalies that might insinuate probable destruction of the Van. The Van should also be equipped with defensive tools such as extra fire extinguisher, back-up air-conditioning unit during high heat and stable brace mechanism that will hold the van steady during drastic weather conditions.
Operational – Operational risks are the most prominent and frequent in any business (Blundell, 1974). This may arise at any moment during operations and apparent mitigating efforts should be utilized to minimize the impact of the perceived risks. For example, proper hygiene is a must in food business because any form of contamination might cause the business to be packing down the road. Hygiene is also analogous to food handling in which improper preparation involves ensuring that the person handling the food is tidy enough to touch it. SAM understands the need for hygiene when handling food, which is the reason that all employees will be required to sanitize their hands before handling the products raw or cooked. In any cases that sanitizing agents run out there should be kitchen gloves available in the processing area as alternative. SAM will also impose a policy stating that no employee should have a direct skin contact with the food products raw or cooked. In the event that one of the four chosen suppliers will not be able to deliver the raw materials, SAM will have a secondary list of verified and well-evaluated suppliers ready to be contacted to deliver the needed supplies. This will ensure the consistency of the products particularly the quality.
Financial – The bloodline of the business is the amount of remaining cash on hand that will sustain the financial needs of the business from the smallest incidental expenses to fixed expenses such as utility bills and insurance. Risks may occur is in the financial department “SAM” if the sales were not sufficient enough to support the business expenditures. For example, the electric bill is almost past due and there are not enough funds yet to pay the bill. The best possible solution to mitigate the problem is to have a contingency fund to be included in the start-up capital. All businesses have its time of up’s and down’s and for starters such as SAM, it is important to include a contingency budget for emergency cases. Another example is when one of the equipment broke down at the start of the operation and no money in the cash register yet to pay for the repairman, a contingency budget will be useful to pay for the immediate repair and to ensure that it is business as usual.
References
Blundell, G. Office of the Governor-General, Government House. (1974). Food Hygiene Regulations 1974. Circular distributed 2009. Wellington: Office of the Governor-General.
Mercer, P. (2009). thenational.ae [online]. Available from: <http://www.thenational.ae/news/world/asia-pacific/australia-to-act-on-natural-disasters>. [Accessed 14 April 2013].
Randwick.nsw.gov.au [online]. (n.d.). Available from: <http://www.randwick.nsw.gov.au/Places_for_people/Building_and_development/Food_safety/>. [Accessed 14 April 2013].
NSW. Food Authority, NSW. (2002). Guidelines for mobile food vending vehicles. Circular distributed 2002. Austalia: Food Authority.