The Budgeting Table
|Equipment||Estimated Cost in USD|
|Food Truck + Equipment & Wrap||93500|
|Permits and Licenses||500|
|Register / POS||1000|
|Facebook / Twitter||0|
|Initial Product Inventory||1800|
|Uniforms / T-Shirts||280|
Risk Management Plan
The food truck is a lucrative business that is likely to generate substantial returns within a short period. However, operating the business is associated with many risks that are necessary to understand before starting. Some of these risks include food poisoning, auto accidents, injuries to workers, and equipment damage (Van Den Berg et al., 2020). Five categories of risks associated with the business are vehicle, operational, liability, and food spoilage, and fire hazards.
The food truck vehicle will be vulnerable to wear, tear, weather, and the environment since it is a physical entity. It can be involved in auto accidents, wind damage, electrical breakdown, theft, or fire. These risks can damage the vehicle as well as make it unworthy to run the business. Large trucks are more likely to be involved in an accident compared to typical cars (Hillson & Simon, 2020). Operational costs include risks to workers such as smoke inhalation, burns, cuts, falls, and back injury. There are many liability risks since business operations and provided services can affect buyers. Auto accidents and food-related illnesses are some of the common liability risks. Food spoilage and fire hazards are high in this business because it lacks the convenience of space. A small mistake in food handling can cause a major health issue.
Risks will be prioritized based on the associated loss and the probability of occurring. It will be necessary to determine the high-impact risks and prioritize them in the management plan. Risk evaluation will help determine potential risks with increased negative impact and high possibility of occurring. Vehicle risks will be given the highest priority, followed by operational, and finally liability. Since the vehicle is the most expensive item and vulnerable to auto accidents, it will be given the highest priority (Keers & van Fenema, 2018). Operational risks have reduced chances of occurring and the involved cost would be lower than those related to the vehicle. Liability risks will be given the least priority because they are preventable and associated with low cost.
Monitoring and Mitigating Risks
Vehicle risks will be monitored and mitigated by seeking the right knowledge and ensuring diligent protocols to hinder theft and fires. It will be important to hire safe drivers and ensure that they follow all the road signs and rules. Insurance coverage will be necessary to offer compensation in case of a costly occurrence (Smith & Merritt, 2020). Operational costs will be monitored and mitigated by evaluating the potential of workers and ensuring that they put on the right protective gear in the workplace. They should practice safe lifting techniques, and wear slip-proof shoes. Insurance cover for workers can offer compensation and reduce the cost of medical treatment (Hobbs, 2020). The business will adopt good operating practices and safety measures to mitigate liability risks. It will also use insurance policies to reduce possible liabilities and losses.
Reasons for Succeeding
The plan will work because it is a lucrative idea and all the necessary preparations will be been done. The right steps for starting the business will be considered implying that success will be realized. Moreover, the business will obtain the right insurance policies to receive compensation in case of any unfortunate event. Therefore, the business is ready for penetration into the market, expansion as well as success.
Hillson, D., & Simon, P. (2020). Practical project risk management: The ATOM methodology. Berrett-Koehler Publishers.
Hobbs, J. E. (2020). Food supply chains during the COVID‐19 pandemic. Canadian Journal of Agricultural Economics/Revue Canadienne D’agroeconomie, 68(2), 171-176. Web.
Keers, B. B., & van Fenema, P. C. (2018). Managing risks in public-private partnership formation projects. International Journal of Project Management, 36(6), 861-875. Web.
Smith, P. G., & Merritt, G. M. (2020). Proactive risk management: Controlling uncertainty in product development. Productivity Press.
Van Den Berg, H. H. J. L., Friederichs, L., Versteegh, J. F. M., Smeets, P. W. M. H., & de Roda Husman, A. M. (2019). How current risk assessment and risk management methods for drinking water in The Netherlands cover the WHO water safety plan approach. International Journal of Hygiene and Environmental Health, 222(7), 1030-1037. Web.