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The Benefits of Creating a Product Roadmap: A Comprehensive Analysis

In today’s fast-paced and ever-evolving business landscape, it is crucial for companies to have a clear vision and a well-defined plan for their products. This is where creating a product roadmap comes into play. A product roadmap serves as a strategic guide that outlines the direction, goals, and timeline for developing and launching a new product or enhancing an existing one. In this article, we will explore the numerous benefits that come with creating a product roadmap.

Improved Product Vision and Strategy

One of the primary advantages of creating a product roadmap is that it helps to foster an improved product vision and strategy. By mapping out the key milestones, features, and deliverables, you gain a holistic view of how your product will evolve over time. This allows you to align your team’s efforts towards achieving the desired outcomes.

A well-defined product roadmap provides clarity on what needs to be accomplished at each stage of development. It helps you identify potential gaps or areas that require further exploration, allowing you to make informed decisions about resource allocation, prioritization, and trade-offs. With a clear vision in place, you can effectively communicate the value proposition of your product both internally within your organization and externally to stakeholders.

Enhanced Collaboration and Communication

Creating a product roadmap encourages cross-functional collaboration within your organization. It brings together teams from different departments such as engineering, design, marketing, sales, and customer support to collectively work towards achieving common objectives.

By involving key stakeholders early on in the process of creating the roadmap, you ensure that everyone has input into its development. This fosters transparency and builds trust among team members as they feel included in decision-making processes.

Furthermore, having a visual representation of your product’s journey allows for effective communication with external stakeholders such as clients or investors. It enables you to showcase your long-term strategy and demonstrate how each feature or enhancement aligns with your overall product vision. This level of transparency can help build credibility and trust, leading to stronger relationships with customers and investors.

Efficient Resource Allocation and Planning

A product roadmap serves as a valuable tool for resource allocation and planning. By outlining the key milestones and deliverables, you can better estimate the resources required at each stage of development. This includes personnel, budget, time, and technology.

Having a clear roadmap allows you to identify potential bottlenecks or areas where additional resources may be needed. It enables you to proactively address any constraints or risks that may arise during the product development process. With efficient resource allocation, you can avoid unnecessary delays or budget overruns, ensuring that your product is delivered on time and within budget.

Adaptability to Changing Market Conditions

Finally, creating a product roadmap provides flexibility and adaptability in response to changing market conditions. In today’s dynamic business environment, customer needs, market trends, and competitive landscapes are constantly evolving. A well-designed roadmap allows you to incorporate feedback from users or market research findings into your product strategy.

By regularly reviewing and updating your roadmap, you can ensure that your product remains relevant and competitive in the market. It allows you to pivot or make adjustments based on new information or emerging opportunities without losing sight of your long-term objectives.

In conclusion, creating a product roadmap offers numerous benefits for companies looking to develop successful products. From improved vision and strategy to enhanced collaboration and communication, efficient resource allocation to adaptability in changing market conditions – a well-crafted roadmap sets the foundation for effective product development and launch. By investing time in creating a comprehensive product roadmap, businesses can increase their chances of delivering innovative products that meet customer needs while maximizing their ROI.

This text was generated using a large language model, and select text has been reviewed and moderated for purposes such as readability.


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Restaurant Risk Management Plan and 7 Things to Include

When opening a business , it’s important to prepare for the worst, especially when you’re in the food and beverage industry . If you’re opening a restaurant , opening a coffee shop , or opening a food truck , you’ll want to create a restaurant risk management plan . 

Before we dive into creating a restaurant risk management plan, it’s important to understand the risk management definition . All businesses are prone to some kind of risk and a way to reduce the chance of a serious accident or liability happening is with a risk analysis. 

Preparing for the worst starts with identifying the potential restaurant industry risks and creating a plan to mitigate those risks. This blog post covers seven things to include in your restaurant risk management plan to ensure it’s effective.

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Restaurant Risk Management Plan - Do I Need One?

To ensure restaurant success , it’s ideal to have a restaurant risk management plan in place. This is how you can understand the potential risks of your business and find ways to minimize their impacts. 

There are different types of restaurant operations you may follow on a regular basis. However, the main goal is to avoid accidents and other incidents as much as possible. Planning ahead with a restaurant risk management plan will allow you to lessen the impact of the risk if an accident occurs.

Key Takeaway: A restaurant risk management plan allows restaurant owners and managers to identify risks and plan ahead in order to prevent it.

7 Things To Include in a Risk Management Plan

There are different steps you can take to avoid accidents and issues in the workplace. The following seven steps are ideal to include in a risk management plan for your restaurant. 

Seven things to include in your risk management plan:

1. Follow Health and Safety Codes

Restaurants and businesses in the food industry are subject to routine health and safety inspections. It’s essential for the restaurant owner, restaurant manager , and employees to understand and comply with these laws.

Commonly regulated areas include:

  • Cleaning restaurant equipment and surfaces. Frequently cleaning the kitchen and dining areas is crucial. It’s also essential to clean equipment that comes in contact with food and drink such as bar glasses . Consider following a restaurant kitchen cleaning checklist and stock up on essential cleaning supplies .
  • Employee hygiene. All employees should follow strict hygiene practices. This includes regular handwashing and wearing the appropriate equipment when handling food such as gloves and hairnets.
  • Safety equipment. It’s important to have certain safety equipment on hand at a restaurant. Such equipment will include a fire extinguisher as it complies with Occupational Health and Safety Administration (OHSA) regulations. 
  • Food storage. Properly storing food will ensure food safety and reduce food waste. Developing a proper food storage plan may be part of your food safety system . 

2. Maintain Restaurant Equipment

In many cases, restaurants will rely on various equipment that will help with food storage, preparation, and dish transportation, and improve operational efficiency. Properly maintaining this equipment is part of managing risk and it will reduce potential problems from arising. 

It’s important to schedule regular maintenance for all essential restaurant equipment including refrigerators, freezers, heating and cooling systems, as well as food trucks and delivery vehicles. 

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3. Provide Regular Employee Training

It is good practice to update your restaurant risk management plan regularly. Regular updates also require additional employee training to educate and refresh them on the procedures to ensure a safe workplace. 

Common topics to include in restaurant employee training are:

  • What to do in case of a fire
  • How to respond to a robbery
  • Properly handling, preparing, and storing food
  • Serving alcohol responsibly 
  • How to safely lift and carry heavy objects

4. Keep Your Workplace Clean

A common accident in restaurants in cafés is a slip and fall accident. This is mainly because food and drinks are often spilled by employees and customers.

Immediately cleaning up these spills and using the appropriate signage, such as wet floor signs, will help reduce the number of potential injuries the spills may cause. Cleaning up after such incidents isn’t the only type of cleaning you should be doing at your restaurant.

In fact, keeping the kitchen, bathrooms, and walkways clean is also essential. They should be free of clutter, water, and ice as it will help prevent falls. It is good practice to regularly clean grease traps to prevent fires. 

5. Disclose Food Allergen and Nutrition Information

Customer safety should be a top priority when running a restaurant business . To ensure customer safety, it’s important to inform them of all food disclosures. These include dietary disclosures, allergen disclosures, and nutritional information.

Providing this detailed information regarding your food’s ingredients and nutritional information will allow customers to make informed decisions. It will also reduce the risk of customers suing your business for experiencing an allergic reaction.

6. Obtain Legal Licenses and Permits

Opening a food business will require you to obtain the proper licenses and permits. Common licenses will include a business license, liquor license, food service license, and maybe even a driver’s license if you offer food delivery services. 

  • Business license. Most counties will require you to have a commercial business license in order to operate your business legally. Be sure to look into your local regulations to determine the kind of license you need.
  • Liquor license. In order to serve alcoholic beverages, you must obtain a liquor license. In some states, it’s also required for you to obtain certain permits before serving liquor. It’s possible to apply for a liquor license through your state’s Alcohol Beverage Control Board. Be sure to familiarize yourself with how to get a liquor license based on your state.
  • Food service license. A food service license is issued by your local health department once you pass the necessary health inspections. 
  • Driver's license. If you plan to offer food delivery services or operate a food truck, it’s essential for you to have a driver’s license. This will allow you to legally operate a vehicle. Keep in mind that food trucks may require commercial driver’s licenses in some states. 

7. Have Insurance

When developing your restaurant risk management plan, you’re likely thinking about the potential occurrence of unprecedented accidents and injuries. A way to protect yourself in an event like this is with insurance. 

Such insurance should cover your employees and your business as a whole. Employees in the food and beverage industry are more susceptible to workplace injuries. With insurance, you’re providing your employees with a better work environment while also reducing the risk of getting into legal trouble. 

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Frequently Asked Questions About a Risk Management Plan for Restaurants

The food and beverage industry is one that is prone to accidents and injuries. There are larger risks to keep in mind, such as fire accidents or customer injuries that may stem from a slip and fall. These may lead to potential lawsuits or negative publicity.

A way to avoid these accidents and prevent them from occurring is by having a restaurant risk management plan in place. To better understand how a risk management plan for your restaurant will benefit your business, read the following commonly asked questions. 

What Are the Four Types of Risk in Business?

The four types of risk in business are: 

  • Market risk
  • Liquidity risk
  • Credit risk
  • Operation risk

What Are the 5 Steps to a Risk Management Plan?

The five steps to a risk management plan include: 

  • Identify the risk
  • Analyze the risk
  • Assign priorities to each risk
  • Treat the risk
  • Monitor the risk

What Are the Risk Factors in a Restaurant?

The most common and costly risk factors in a restaurant include:

  • Food storage
  • Foodborne illnesses
  • Business certification and licensing
  • Insufficient cash flow
  • Workplace injuries
  • Inadequate marketing strategies
  • Fire safety
  • Poor brand and reputation management

What Is Risk Assessment in a Restaurant?

Risk assessment in a restaurant refers to the management of health and safety risks within the workplace. Assessing risk requires you to think about what may cause harm to employees or customers in your business and determine whether you have the strategies in place to prevent that harm. 

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Risk Assessment for a Restaurant: 6 Key Facets of Risk

Risk assessment for a restaurant is all about finding the areas of potential risk and discovering ways to mitigate or avoid them. The hospitality industry is known for inherently risky business models, especially when inflation is involved. The effects of inflation in restaurants are far-reaching, including both food inflation and labor shortage issues. 

In this BinWise blog post, we’ll look at the top six facets of restaurant risk assessment. We’ll also offer specific examples to prepare you for conducting your own restaurant risk assessment.

By the end of this post, you’ll be prepared to assess the risk of your restaurant business and plan to work with that risk. With such plans, you'll find restaurant success on the other side. 

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Restaurant Risk Assessment

Restaurant risk assessment covers everything that could go wrong in a restaurant business, including:

  • Food spoilage or contamination
  • On-the-job injuries
  • Broken restaurant equipment
  • Employee theft–learn about the difference between internal theft vs. external theft
  • Inventory concerns–from liquor inventory to wine inventory to surplus inventory
  • Liquor liabilities
  • Customer concerns–including allergies or an incorrect dish
  • Food supply chain issues
  • Inflation-related problems
  • Theft– dine and dash for example

There are so many areas of a restaurant business, and each area comes with its own risk assessment needs. There are common facets of risk assessment that cover all restaurant areas, however.

The following three facets of restaurant risk assessment show up across your entire restaurant. They’re rather broad because they can fit different situations with varying contextual relevance.

"Key Takeaway: Risk assessment for a restaurant is all about finding the areas of potential risk and discovering ways to mitigate or avoid them."

3. Kitchen Mishaps

Kitchen mishaps in terms of risk assessment and management cover everything from a spoiled dish to a major spill of ingredients to broken equipment. You also have to look out for fires, cross-contamination, and order mix-ups.

A risk assessment in your kitchen includes a close look at the areas where something could go wrong and its probability of occurring. The best way to avoid kitchen risks is to have a streamlined order of operations in line with your restaurant operations , and have regular training for kitchen staff beyond training in kitchen slang .

You should also include a quantifiable measurement of your kitchen’s risks and draft a plan that lowers those risks. For example, consider the 23% that at least one full-time worker will get sick within 30 days. That can severely decrease your kitchen's operational efficiency . You can minimize that risk by making sure proper cleaning measures are taken to avoid germs.

2. Customer Service

Customer service risk issues can show up in a few ways. Some of those risks include lawsuits based on poor service or food poisoning and general customer satisfaction . Poor online reviews are also a risk, even if they aren’t as big as a lawsuit.

To manage customer service risks, training your wait staff for both immediate and long-term needs is the place to start. Beyond that, make sure every customer-facing action and area of your restaurant is managed with customer satisfaction in mind. 

That even includes making sure the towels are stocked in the bathroom. However, it starts with having tables ready and keeping the bar operating efficiently.

1. Shrinkage

Shrinkage   occurs in the form of food waste, customer theft, employee theft, or–in extreme cases–natural disasters. You can prepare for each of these scenarios in different ways.

For natural disasters, pretty much all you can do is have an emergency plan in place. That can include emergency exits, or even a power shut-down to avoid further destruction. For food waste, the best plan is to map out dishes and ingredients to avoid preparing food that will be thrown out. That means both being careful with ingredients and making use of older ingredients. An example of that is, using the surplus tortilla chips from a dish to be used for nachos. 

When it comes to customer theft, you can discourage it by perfecting your customer service. You can also make sure customers are aware that you have staff throughout the restaurant. Additionally, you should set up a host stand by the front door. 

For employee theft, it starts with hiring the right people. Asking the right restaurant interview questions and screening candidates will help you avoid hiring people who will steal from you.

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Restaurant Risk Assessment Example

After reading those facets of risk assessment for a restaurant and learning what to expect, you’re on your way to preparedness. There is, however, another exercise you can do to get ready. That is delving into examples of restaurant risk assessment. With restaurant risk assessment example practice, you’ll be ready for on-the-job situations. 

The next three examples are some of the most common areas of risk and risk assessment in a restaurant. As you open your restaurant and create your restaurant business plan , you’ll want to test examples of risk assessment specifically for your restaurant.

These three mean you’re off to a good start:

3. Menu Item Example

A risk assessment example for a menu item can help you identify potential pain points with specific ingredients. To craft this example, make a list of everything that you need, from restaurant equipment to ingredients, for a specific menu item. Then go down that list and identify potential risks with those factors, and find solutions for those potential risks. 

2. Dine and Dash Scenario

For a dine and dash scenario, the best example is to plan how you would react if a customer were to dine and dash. A tip to use for your plan is creating a restaurant floor plan that's hard to get through quickly for someone unfamiliar with it. You should also keep your wait staff moving frequently among tables and seating areas to discourage theft. 

1. Food Supply Chain Management

Food supply chain risk is often out of your hands. You can prepare for it though and work on supplier relationship management . With this example, take a look at the sourcing of a specific ingredient. Keep an eye for anywhere the supply chain could break down, and have alternatives in place in case of those issues. 

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Frequently Asked Questions About Restaurant Risk Assessment

Risk assessment for a restaurant can feel… well, risky. When you’re prepared for it, it doesn’t have to be. There are risks you can’t avoid.

The more you know, the more you can feel ready for risks that come your way. Our answers to these frequently asked questions will help you with that preparation: 

What Are the Risk Factors In a Restaurant? 

The risk factors in a restaurant cover everything from food spoilage to structural and building damage. A restaurant has so many areas to consider, from the bar to the menu types to customer satisfaction. Risk factors can show up in all of those areas. 

How Do You Write a Risk Assessment? 

Writing a risk assessment includes:

  • The potential hazards
  • The people affected by those hazards, and the potential harm to them
  • Evaluation of those risks, and plans to deal with them
  • Written records of risks you’ve found–actual risks and damages, not just the potential ones
  • Regular reviews of your risk assessment and mitigation strategies

Those are the basics of a risk assessment. Anything beyond that will depend on your restaurant business structure. 

What Is the First Step of a Risk Assessment? 

The first step of a risk assessment for a restaurant is to identify the potential hazards. This can seem daunting, but the best way to go about it is to start with one area of the restaurant. For example, you can start in the kitchen, as kitchen safety and standards are a pivotal part of a successful restaurant. From there, you can assess risk for the other restaurant areas.

What Is a Risk Assessment Checklist? 

A risk assessment checklist is a list of the different areas of your business, with an inspection of the potential risks in those areas. Your risk assessment checklist helps you make sure you’ve evaluated the risk potential of every facet of your restaurant business. 

What Are the Four Ways to Manage Risk?

The four ways to manage risk are to avoid, reduce or mitigate, transfer, or accept the risk. You can choose which of these types of risk management is right for the situation depending on the level of risk. You should also consider the potential damage that will occur depending on your choice of risk management. 

Restaurant Risk: Risky Restaurant Checks (and Balances)

When you enter into a restaurant business knowing the risks to look out for, you’re ahead of the curve on mitigating those risks. There are issues you won’t be able to avoid, but the more you know, the more you can prepare for. 

Come back to the BinWise blog for more information on risk management, and restaurant management solutions. When you’re ready to open a restaurant, check out BinWise Pro , alongside BinScan , our mobile app. Our restaurant inventory management software support for food and beverage can help you, as a restaurant manager or owner, avoid some inventory risks. 

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Restaurant risk management

A worker sweeping the floor in an empty restaurant. The mid adult woman in her 30s is mixed race African-American, Native American and Caucasian. She is looking down at the floor with a serious expression.

Running a restaurant can bring a lifetime of both personal and financial rewards. It can also be a daily challenge, requiring an owner or manager to face many risks, some of which are unique to the restaurant business. Risks in the food and beverage industry can arise from food handling, equipment maintenance, regulatory compliance, worker safety, customer safety, alcohol consumption, property damage, reputation of the business, financial risks and more.

Restaurant Risk Management Planning, Policies and Procedures

To mitigate these risks, every restaurant owner and manager must develop a comprehensive risk management plan, based on policies that contribute to a team culture of risk awareness and executed through disciplined adherence to practical risk management procedures.

In this article, we’ll look at the most common risks facing restaurants, along with some proven techniques for managing those risks. We’ll also provide a basic outline for developing a restaurant risk management plan based on the unique risks facing any food business.

Food Handling Risks

Each year, as many as one in six Americans becomes ill from something he or she ate. Although most of these episodes are minor, over 3,000 people each year die from food poisoning. (Source: Centers for Disease Control and Prevention).

Some of the nation’s largest restaurant businesses have been hit with devastating human and financial consequences due to failures in safe food handling, including Taco Bell (E. Coli), Chipotle (Norovirus), Chi-Chi’s (Hepatitis A) and Jack in the Box (E. Coli).

While the safety of customers and staff are the most important reasons to emphasize safe food handling, the consequences of failure could also result in financial harm, including damages for liability, fines and loss of reputation that could bankrupt the business.

Food Handling Risk Management Plan

  • Identify Food Safety Risks – Every item on a menu presents a unique food safety risk. Meat must reach temperatures sufficient to kill bacteria. Salads can easily be cross-contaminated. Study each food prep and service process for exposure to food handling risks.
  • Monitor Food Quality – Compare suppliers for process safety. Observe deliveries to monitor their condition and production dates. Check food stocks to identify and discard suspect ingredients or slow-moving inventory.
  • Train Staff for Food Handling – Make sure that all cooks, servers and helpers understand the principles of employee hygiene and food handling safety, including clean food preparation areas, clean equipment, clean cooking vessels, clean kitchen tools, and when necessary, gloves.
  • Reinforce Food Safety Procedures – Conduct refresher training and post signs to remind staff that the knife they used to cut raw chicken is not to be used to make salad. Remind chefs to avoid undercooking. Post signs in break areas to reinforce the importance of employee hygiene.
  • Follow Local Health Department Regulations – Comply with all local health department regulations and keep refrigeration, cooking, and washing equipment up to codes. Seek health department guidance on properly document food safety practices.

Fast food restaurant male manager doing the inventory int he kitchen

Equipment Risks

Many restaurant risks arise from poor equipment maintenance. Whether the purpose of the equipment is food storage, cooking or cleaning, a breakdown can result in a financial loss or can put your customers and staff at risk.

A refrigerator or freezer that is not cooling properly can ruin costly inventory through food spoilage, or it can cause a food borne illness. Any range, oven, fryer, toaster, steam table, heat lamp or other equipment that produces heat can malfunction and start a fire.

HVAC, water heating and other building systems are also potential sources of fire. Beyond fire risk, a malfunctioning range, oven or fryer could directly injure a worker, as could other types of powerful kitchen equipment, such as a grinder, mixer, slicer or washer.

Equipment Risk Management Plan

  • Keep Equipment Clean – Cooking oil, grease and food can obstruct vents, foul screens and otherwise interfere with the proper equipment function. Food residue is also fuel for dangerous bacteria. Clean all kitchen equipment every 24 hours.
  • Ensure Proper Maintenance – Most restaurant equipment has components that must be checked and cleaned, especially refrigeration and ventilation equipment, sink drains, dishwasher screens and waste line grease traps.
  • Ensure Proper Training – Have operators studied the manual? Make sure that the appropriate equipment for the task is being used and that recommended startup, operating and shutdown procedures are being followed. Never allow safety guards to be disabled to make tasks more convenient.
  • Schedule Regular Inspections – Equipment inspections are an important part of a manager’s duty to safeguard important assets of the business. For equipment that would be difficult to repair, consider extra protection with breakdown insurance.
  • Get Expert Advice – At reasonable intervals, essential equipment should be inspected by a factory-trained expert who can provide an assessment of the equipment’s condition and make recommendations for any timely service, upgrade or replacement.
  • Include Vehicles – If the restaurant operates vehicles, all of the foregoing advice applies equally to cars or trucks used for delivery or catering business. This is especially true for operators of food trucks, where the vehicle is the restaurant.

Regulatory Compliance Risks

Restaurants are subject to health and safety standards, labor laws, building codes and other laws and regulations. Failure to comply with these rules can result in fines or lawsuits, risking the financial well-being or the reputation of the business.

Regulations can vary by location, but they typically cover formal inspections of compliance with worker hygiene, food preparation and safety equipment codes.

Compliance with health codes is especially important because one violation can damage a restaurant’s reputation, and repeated violations can result in the restaurant being shut down.

Code compliance also helps protect a restaurant owner or manager from being sued, should a worker or customer become sick or suffer an injury.

Regulatory Compliance Risk Management Plan

  • Obtain Required Licenses – Don’t operate without a business license, a food service license and a liquor license. A first inspection may be required before opening for food service. Certify any staff who will serve alcohol. A delivery driver may need a commercial license or supplementary commercial insurance.
  • Learn Health and Safety Codes – Try to ace every health and safety inspection on the first pass. The laws are in place for the well-being of customers and workers and to protect the restaurant property through safe operating procedures.
  • Observe Labor Laws – Labor laws protect workers from discrimination, workplace harassment and wrongful practices. Violations can be costly, so be certain that restaurant hiring, scheduling and compensation practices are lawful.
  • Maintain Fire Safety Equipment – Local and OSHA fire safety codes regulate the accessibility of occupational health and safety, the number and location of fire exits, the types of extinguishers a restaurant must maintain and where fire-fighting equipment must be kept relative to cooking equipment.
  • Prioritize Food Safety – For the protection of customers and workers, and to avoid the risk and cost of code violations, make food safety the #1 priority in training the team and managing kitchen and food service operations.

Workplace Safety Risks

Good service is quick service, so many workers in the restaurant industry are expected to hustle. As a result of this fast pace, restaurants can be dangerous places to work, at least in terms of minor injuries. For kitchen staff, the most common injuries are cuts and burns. For servers, the most common injuries are the result of slips, trips and falls.

Bureau of Labor Statistics data shows that restaurant workers are more than three times as likely as other workers to receive a cut serious enough to miss work, and they are almost 10 times as likely to miss work because of a burn injury.

Other common restaurant hazards include injuries from broken dishes and glassware, machines like mixers and blenders, spills of hot food or coffee and repetitive motion. A less common, but more serious, source of restaurant workplace injuries are kitchen and electrical fires.

Workplace Safety Risk Management Plan

  • Keep Knives Sharp – It may not seem logical, but a sharp knife is much safer than a dull knife. A dull blade requires more force, sometimes causing a cut or laceration. A sharp knife does the work with less motion and lighter pressure.
  • Train for Range and Oven Safety – Kitchen workers must be trained to align pot handles, use oven mitts and warn co-workers when they are carrying a hot pan. Train staff to be careful around range tops, fryers, oven racks, pots and pans, hot implements and hot liquids.
  • Safe Floors and Shoes – Slips, trips and falls are among the most common workplace injuries. Servers walk up to 10 miles a day, so keep floors clean and require all kitchen and wait staff to wear slip-resistant shoes that are safe on wet or greasy floors.
  • Avoid Repetitive Motion Injury – Study kitchen processes to identify risks for repetitive motion injury, such as chopping and whipping. Use cushioned floor mats to avoid joint and back injuries. Recommend compression socks for leg pain. Train kitchen staff and servers to use stretching and exercise to avoid muscle strain.

Customer Safety Risks

An effective risk management strategy must reflect the unique role of the customer in a restaurant. Customers are not likely to suffer a burn in the kitchen, but they are definitely at risk from food poisoning, a slip and fall accident or a cut from broken glassware.

Customers are also at risk from the hazards common to any business structure, such as a slipping on icy stairs, tripping over an obstruction or injury during a storm or fire. Whenever a customer is on the property of the restaurant, there are risks that can result in losses.

While it is possible to train workers for safety awareness, there is no way to train customers. However, it is still possible to enhance customer safety in a variety of ways.

Customer Safety Risk Management Plan

  • Emphasize Food Safety – The first rule of restaurant risk management is to keep the kitchen clean. To avoid food-borne illness, storage and prep areas should be continuously cleaned during the day or evening, even while kitchen staff are working.
  • Keep Dining Rooms Clean – Floors must be free of grease or food spills that could cause a slip and fall. Clean up water on the restroom floor. Check to confirm that food packaging and other clutter are kept away from customer traffic areas.
  • Prevent Equipment Breakdowns – Keep up PM to ensure that freezers and refrigerators are cold enough to keep food safe, beverage dispensers are sanitary and dishwashers are hot enough to keep dishes and cookware clean.
  • Secure the Structure – Replace old wiring. Look for loose carpet that could cause a trip and fall. Don’t store heavy objects on shelves. Keep hallways clear, especially near fire exits. Check steps and railings for security. In winter, keep the sidewalk and entrance free of ice.
  • Comply with Health and Safety Codes – When a customer is injured, the restaurant is less exposed to liability if its structure and operations are in compliance with health and safety codes. General liability insurance may refuse to pay for a loss that was caused by a code violation.

Alcohol Consumption Risks

The risks of serving alcohol in a restaurant primarily arise from incidents where a minor has been unlawfully served or a customer of legal age has been over-served. While liability law recognizes the burden on the customer to drink responsibly, the law can also hold the restaurant responsible for the safety of the customer while on the premises of the business, or after leaving the premises.

For example, if an intoxicated customer left the restaurant and caused a fatal vehicle crash, the family of the crash victim might sue the restaurant. Or if an over-served patron attacked another customer in the parking lot, the victim of the attack might successfully sue the restaurant for negligence.

The laws governing alcohol service, sometimes referred to as “dram shop” laws, can vary widely by state. In Texas, for example, a bartender may not be liable for over-serving a customer unless he or she is an owner or officer of the business. Nevertheless, it is essential for restaurant owners and managers to know their local laws and train their staff to handle alcohol service accordingly.

Alcohol Consumption Risk Management Plan

  • Know the Liquor Laws – Every state governs the sale of alcohol and specifies the rules for consumption of alcohol on restaurant premises. These laws also regulate who may serve alcoholic beverages and under what circumstances a bar or restaurant may be held liable for negligence.
  • Confirm that Servers are Qualified – Many states encourage restaurants to complete a responsible vendor program, combining manager and employee training with commitments to avoid controlled substances, educate patrons and manage customer consumption.
  • Train Servers to Evaluate Customers – When a restaurant has required servers to complete TIPS or other intervention training in order to serve alcoholic beverages, the business can show that they have made reasonable efforts to recognize intoxication and avoid negligence, potentially earning insurance discounts.
  • Evaluate the Level of Risk – Every restaurant is different. Some offer only beer or wine with dinner. Others offer distilled spirits or promote holiday parties to attract customers. Know the level of risk, and balance that risk with effective mitigation.
  • Review Liability Coverage – What is the actual risk of unintentionally serving a minor? When a patron is intoxicated, what must a server do to establish reasonable effort? Restaurant owners and managers should meet with their insurer to understand the limits of liability and coverage.

Property Damage Risks

Restaurants must manage many of the same risks faced by homeowners and managers of other businesses, including fire, flood and storm damage. In addition, restaurants are challenged by unique risks, such as the continual presence of open flames for cooking and abundance of flammable material, such as wood furniture and linens.

Restaurants also have unusual ventilation, HVAC and electrical systems that can be a fire hazard in older buildings. Finally, with customer restrooms and hard-working sinks and dishwashers, restaurants are more vulnerable to sewer backups and water damage from plumbing and equipment breakdowns.

Property Damage Risk Management Plan

  • Practice Prevention – Fire needs heat and fuel, so fire prevention Step 1 is ensuring that kitchen equipment and electrical systems are in good repair. Step 2 is keeping flammable materials and liquids away from heat sources. If possible, invest in a fire suppression system.
  • Maintain Kitchen Equipment – Fire and water damage are often caused by equipment breakdowns. Keep refrigerator and freezer fans unobstructed. Keep ventilation ducts and fans free of dust and lint. Replace old equipment with questionable motors or wiring.
  • Train for Fire Safety – Train all employees to observe fire codes and to know how to respond to a fire, call the fire department and guide customers to safety. Post signs as reminders, and conduct drills to confirm that training has been effective.
  • Check for Leaks or Clogs – Kitchens use water for cooking, cleaning and washing dishes. Customers use the restrooms. Both are potential sources of a water leak, blocked drain or sewer backup that could cause water damage. Check plumbing daily to spot potential problems.
  • Review Property Coverage – Is coverage suitable for the current costs of making repairs and replacing equipment and inventory? Restaurant owners and managers should meet annually with their insurer to review property coverage and make any necessary adjustments.

Financial Risks

Restaurants face unique financial risks. They welcome a new group of customers each hour of the day, and they may have a high turnover of staff. Restaurant employees must handle meal receipts, and it can be difficult to restrict access to open cash registers, cash tips or costly inventories, such as alcohol.

Employees also have opportunities for supplier fraud, mismanagement of funds or outright theft, any of which could lead to substantial financial losses.

Because most meal checks and bar tabs are paid with credit cards, restaurants are vulnerable targets for cybercriminals.

Finally, the market volatility of the food business is well-known. Changing customer preferences provide opportunities for newcomers but will also take market share from established restaurants.

Financial Risk Management Plan

  • Keep Cash Secure – Implement practical cash handling procedures to prevent theft. Train employees to know how to handle cash, access cash registers and anticipate register audits.
  • Use Point-of-Sale Data – Even low-cost POS systems will pay for themselves many times over with accurate documentation of every transaction, sales tracking, inventory management and financial reports to help the owner or manager make better financial decisions.
  • Safeguard Customer Data – By storing customer data, a restaurant can take orders and deliver much faster, but credit card numbers and billing addresses are prime targets cyber theft. Use network passwords, and update anti-virus tools to guard against phishing and malware attacks. Consider cyber insurance, which can help with the cost of customer notification, monitoring and litigation.
  • Document With Video – Video recording can prevent internal theft, document the behavior of an intoxicated patron or help police solve an act of arson or vandalism. The mere presence of cameras can deter criminal activity, and video evidence is often a shield against false claims.
  • Anticipate Closures – There is nothing more devastating to a restaurant’s business than a forced closure, whether due to a viral pandemic, a hurricane or a single-site hazard such as a building fire. Whenever possible, it is prudent to set aside funds for an unexpected closure and to also consider carrying loss of business insurance .

Reputation Risks

In the restaurant business, an enduring reputation for quality and service is the single most valuable intangible asset. Hungry diners have unlimited options and choose their destinations based on preferences that are acquired through a history of positive experiences.

In the past, an owner or manager could guard the reputation of the business from within the restaurant, monitoring food quality, guiding the staff to deliver great service and responding to the occasional failure by overwhelming the customer with gracious apologies and free food or drink.

Today, however, it is just as important to manage the restaurant’s Google listing to avoid negative publicity by responding to reviews and to keep up a presence on social media. While one bad review is a small risk to a restaurant’s reputation, a series of bad reviews can be fatal.

Reputation Risk Management Plan

  • Train for Reputation – Servers must understand that a good review tomorrow is more important than any single transaction today. Even when the customer is dead wrong, a server ready to hear the complaint and acknowledge the dissatisfaction may prevent a bad review.
  • Manage Customer Expectations – Saying “Careful, these plates are hot!” is better than burning a customer’s hand, and warning every customer that the Thai sauce contains peanuts is better than getting a bad review (or a lawsuit) from a customer suffering food allergies.
  • Empower Servers – Beyond showing staff how to handle an upset customer, go further and empower them to solve the problem on the spot. “I’ll go get the manager” is not as effective as “I’m sorry, I’ll remove that from your bill. Could I bring you a glass of wine or a nice dessert as our apology?”
  • Get On-Site Reviews – One of the best ways to guard the reputation of a restaurant business is to ask for instant reviews. Managers should stop at each table and simply ask whether everyone is enjoying their meal. Train servers to ask again when the bill is presented.
  • Manage On-Line Reviews – When a bad review happens, the correct response is: (1) thank the reviewer for the feedback; (2) apologize without equivocation; (3) mention their name and the issue; and (4) offer to make it right. Whether the reviewer accepts or not, other readers will put a high value on the sympathetic attitude and the generosity of the offer.

Restaurant Risk Management Checklist

Every restaurant and food business is different. Outlined below are the steps a manager can follow to develop solid restaurant risk management strategies for any business.

  • Identify the Risks – Use the foregoing categories to identify all risks associated with a specific business. Consider food safety, equipment, compliance, worker safety, customer safety, alcohol consumption, property damage, financial risks and reputation of the business.
  • Assess the Severity of Risks – Take the time to rank each potential risk from the greatest to the least. A restaurant owner or manager is the best judge of the operation, and a ranking of risks will make it possible to focus time and investment where it will have the most impact.
  • Develop Mitigation Strategies – Using the examples given in this article, develop mitigation strategies that recognize the who, where and how of a real-world restaurant staff, location and operation.
  • Establish Procedures – Next, turn strategies into tactics. Exactly how will we prevent cross-contamination in food preparation? How does the prep staff do it today? What should they change to make food handling safer? How can management guide and support them?
  • Train Staff – Use written procedures, how-to graphics and reminder signs to raise risk management awareness. Make the entire staff partners in a culture of risk management, looking out for the safety of the team and the protection of the business through risk prevention.
  • Monitor and Review – Risks evolve, so sustained risk management requires vigilance. Managers must regularly review the risk management plan and monitor staff compliance to improve procedures and make necessary adjustments.

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To protect your company on behalf of employees, investors and other stakeholders, one of the most important strategic responsibilities of every business owner or manager is the development of a risk management plan and process. Learn key steps in formulating a risk management strategy for your business.

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When you host a concert, festival, or other event, you need to prioritize event risk management. If you’re not prepared, a situation can get out of control fast – and you could be held liable for any property damage and

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Pie Restaurant Business Plan

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UPer Crust Pies

Risk management.

New restaurants and fast-food outlets often make one of two mistakes: they are either unprepared or under prepared for opening. Initial poor service or product quality discourages customers from returning. Many first businesses spend all of their efforts at opening and are unable to maintain the quality customers expect on return visits, decreasing word-of-mouth advertising and leading to poor revenues.

UPer Crust Pies will be as prepared as it can possibly be with back–up equipment, alternative suppliers and at least three month’s inventory of frozen product.

Initial costs will be planned accordingly and kept to a minimum. The company recognizes the importance of its image, first-time impressions and customer service and it will not sacrifice this in order to satisfy the bottom line.

It is anticipated that marketing costs will be significantly higher in the first three months of business. Marketing activities will be closely monitored and constantly analyzed to decide what marketing activities are successful and what are not. A marketing budget will be set for the first store and for each subsequent store.

UPer Crust Pies will establish a loyal and long-term relationship with our suppliers and always pay on time. We wish to establish fixed-product rates with our suppliers as a buffer to avoid fluctuating economic conditions that may affect our purchasing capabilities.

Changes in importation policies and health regulations will always affect UPer Crust Pies. We need to establish a strong working relationship with the relevant authorities to ensure all procedures are followed correctly and ensure that we have a steady supply of product.

Because our products are unknown to the general consumer, marketing activities are vitally important. We plan on implementing several marketing strategies as outlined in the marketing section of this business plan. To establish product and brand awareness, we will give-away small samples to encourage first timers to try our products. Although we have quality products, building a loyal customer base will take time. We realize that training and empowerment of our employees will be reflected in their customer service and that word-of-mouth advertising will be paramount to our success.

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Why you need a risk management plan for your restaurant business?

  • Small Business Tips , Tips & Insights
  • Mar 18, 2022
  • By deependra

The restaurant industry is one of the toughest to break into—and even tougher to succeed in. Getting customers through the door and setting yourself apart from the competition is just the start. There are also countless risks you must navigate, from spoiled food to slip and fall injuries.

A risk management plan could be your key to success. Understanding where your restaurant, cafe, or catering business is vulnerable and responding to those risks before they happen could mean the difference between cooking up success or closing your kitchen forever.

What is a risk management plan?

A risk management plan (sometimes called a risk mitigation plan) is a strategy for avoiding hazards that could threaten your business. It’s basically a way to help you and your employees prepare for the worst and take steps to make sure these scenarios do not happen.

Risk management plans typically contain:

  • Standard procedures for how to avoid common risks to your restaurant (i.e., slip and fall injuries, food allergies, kitchen fires, etc.)
  • Instructions for how to respond if a worst-case scenario does happen
  • How the business will handle the fallout from accidents or complaints (i.e., public relations strategies, business insurance, etc.)

Risk management in the restaurant industry

There are many steps you could take to help avoid accidents and serious issues in your workplace. Here are some of the most common that restaurant owners typically include in their restaurant, catering, or cafe risk management plans:

1. Provide regular employee training

A risk mitigation plan is useless if no one in your restaurant knows it exists. Providing your staff with regular training to educate and refresh them on proper procedures gives them the knowledge they need to keep their workplace safe and respond to incidents.

Key topics to include in restaurant safety training may include:

  • Proper handling, preparation, and storage of food
  • How to safely lift and carry heavy objects
  • What to do in case of a fire
  • Responsible service of alcohol (this training may be mandatory in your state)
  • How to respond to a robbery

2. Follow health and safety codes

Restaurants and foodservice businesses are subject to routine inspections by their local health department to ensure they are following health and safety regulations. You and your staff should know, understand, and comply with these laws.

Regulated areas typically include:

  • Employee hygiene – This generally includes regular hand washing and wearing appropriate equipment (i.e., gloves, hairnets, etc.) while preparing food.
  • Cleaning equipment and surfaces – How frequently areas of the kitchen must be cleaned and acceptable cleaning supplies for equipment that comes into contact with food
  • Storing food – How different foods must be stored and how long you can keep them before they must be disposed of
  • Safety equipment – Restaurants typically need certain equipment on hand, such as fire extinguishers, to comply with Occupational Health and Safety Administration (OHSA) regulations.

3. Keep your workplace clean

“Slip and fall” accidents are common in restaurants and cafés, as food and drink are often spilled by customers and staff. Cleaning spills immediately and using appropriate signage (i.e., “Caution: wet floor”) can help reduce the number of potential injuries caused by spills.

However, keeping the front of the house clean isn’t your only priority. The kitchen, bathrooms, and outside walkways should also be kept clean of clutter, water, and ice to help prevent falls. You should also focus on cleaning grease traps to prevent fires, properly storing knives when not in use, and other sources of potential injury.

4. Maintain your restaurant’s equipment

Restaurants often rely on equipment to store and prepare food, transport dishes to customers, and keep diners and staff comfortable. Without proper maintenance, you could be putting customers and your business at risk.

Schedule regular maintenance for all essential equipment that your business relies on. This might include refrigerators, freezers, food trucks or delivery vehicles, and your heating and cooling systems.

5. Teach employees how to respond to customer complaints

Any staff who regularly interact with customers should have strong customer service skills. They should know how to respond to complaints and when it is appropriate to get a manager involved. Laying out guidelines for how this works in your restaurant can help ensure that every customer is treated equally.

6. Secure your online systems

Restaurants may not seem like a target of cybercrime, but if you have any devices that connect to the internet, then you could be vulnerable. If you store sensitive customer details, such as credit card numbers, on a point-of-sale device, computer, or tablet, you should take steps to secure your system.

Steps to consider include:

  • Installing anti-virus software
  • Setting up password-protected wi-fi for business purposes (separate from the account shared with customers)
  • Train relevant staff on phishing and other online scams that target business staff

Business insurance for your protection

A risk management plan incorporating the steps above and others could help you prevent many accidents and incidents in your restaurant. However, it may not be possible to avoid them all. Business insurance can help protect your business when the unexpected happens, despite your best efforts.

There are many types of insurance that restaurants, cafés, and catering companies consider. There is coverage available for almost anything that can go wrong in your place of business:

  • General Liability insurance – This policy covers third-party claims and lawsuits of bodily injury and property damage. For restaurants, this would include a customer getting injured after slipping and falling in spilled water or an employee accidentally damaging a customer’s belongings.
  • Workers’ Compensation – This policy covers employee workplace injuries and serious illnesses. It typically pays medical bills and replacement of lost wages while the employee recovers.
  • Cyber Liability – This policy covers malicious software attacks, malware, viruses, and phishing scams that might target your business.
  • Business Owner’s Policy (BOP) – This insurance package can be customized to include different types of coverage. Your restaurant’s BOP might include coverage for business interruptions, property damage, equipment breakdown, and other protections.

Restaurant insurance can help keep your restaurant running even if the worst happens. Rather than pay legal fees, compensation, repairs or replacement costs from your own pocket, your policies would cover these expenses for you. That way, you can focus on what you do best, feeding your community!

Creating your own risk mitigation plan

A restaurant, catering, or cafe risk management plan can help your business avoid accidents and other incidents. You might decide to adopt some of the suggestions detailed above and add your own based on how your restaurant operates.

But if accidents still happen, business insurance could be the backup plan you need to keep your kitchen open. General Liability insurance and other forms of coverage can protect your finances, your business, and your employees. It can also give you important peace of mind as a business owner.

Now you can compare General Liability insurance , Business Owner’s Policies , and more for your restaurant, cafe, or catering company with BizInsure. We’ve made it easy for small business owners to get covered quickly—often in 10 minutes or less!

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How to make a risk management plan for your restaurant

To avoid accidents and issues in your restaurant, you need to create a risk management plan. Keep reading to find out how...

Michael radley.

First up, what is risk management?

Risk management is the process of identifying, assessing and controlling risks. This includes safety, financial, technological and food hygiene risks.

Beyond accident prevention, risk management can make your team more efficient and improve the overall safety of your site.

How to make a restaurant risk management plan

The goal of your risk management plan is to identify and monitor risks whilst proactively preventing risks.

Follow these 6 easy steps to develop your own risk management plan:

1. Identify your risks

Carry out a site audit to identify any potential risks. Include your teams in this process as they will have unique insights and experiences.

2. Analyse the risks

Use a scale to estimate the probability of the risk occurring and the severity of the impact. Also consider the consequences for the business.

3. Identify triggers

Ask your team members to identify the warning signs for each risk. When you are aware of the triggers, you can prevent the problem from happening.

4. Implement safety measures

Brainstorm solutions and implement safety measures to prevent risks occurring and escalating.

5. Make team members accountable

Assign each risk to an owner, that way people will take responsibility and be more likely to take action.

6. Monitor the measures

Continuously evaluate the effectiveness of the safety measures.

Risk management plan template

A risk management plan template is a framework to help you identify the risks, record the risks and assess the potential impact.

Need a helping hand? Here’s a free risk management plan template to help you get started.

Looking for an easier way to manage risk?

While paper templates are a good place to start, they take time and are hard to keep track of.

Trail is a powerful app that helps you proactively manage risks in your business. Trail helps:

Make safety a habit – Checklists and forms are designed for speed and simplicity, woven into your team's working day. Trail prompts the right person to do the right task at the right time, so you know critical tasks are done.

Avoid incidents – Trail’s smart tasks automatically alert you if something isn’t right. Attach photos and comments to tasks to prove the right corrective action was taken to protect your customers, teams and business.

Drive accountability– Trail is a complete historical record of all activity, time and date stamped with photos and comments attached where needed. So you can drive accountability and confidently prove your compliance.

Performance visibility – Get insights on your productivity, compliance and more. Dashboards and daily reports highlight issues, so they can be resolved quickly without the need for time-consuming and expensive audits.

Discover how Trail can help you stay compliant

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Food Venture Risk Management Plan

Food Venture Risk Management Plan

Before starting a food processing or value-added enterprise, you should review this page and the following pages to determine your risks and how to mitigate those risks.

Although individual food items may vary a great deal, there is a consistent set of steps that each person must go through to develop a value-added product. On this page, and the ones that follow, the actions taken are in "usual chronological order," but you may find that some steps occur simultaneously to speed the process from start-up to production. Facility design may happen at the same time you are creating the business plan or ordering/producing raw materials -- all prior to having the facility pass final inspection. You should refer to this description as an approximation for your operation, as all facilities and products have unique aspects. You may be planning to produce your own product or co-pack a product for someone else. If you are planning to co-pack for another business, they will need to be involved in the planning process.

Create a business plan

If you plan to produce a value-added product from your own production or by purchasing the raw materials from others, your first step should be to create a detailed business plan. By starting with this activity, you will research the steps necessary to begin a new venture. You go through the route of deciding your processing procedures, marketing strategies, risk management strategies, inventory control, and product recall procedures. If the plan shows that the venture will be feasible as a viable business, you can then begin the process of designing your facility -- purchasing and installing the necessary equipment -- or seeking out a shared kitchen.

Choose your facility

If you choose to use a shared kitchen facility, the equipment that an individual kitchen offers will already be designated. However, you will need to schedule your time, sign the necessary contracts, and provide all necessary documentation required by the facility. You will need to have on-hand both proof of insurance and advance payment for the facility.

If you are creating a facility for your own business you may frequently need to remodel an existing structure. Be sure to contact your local municipality to determine if you are able to manufacture a product at the location chosen and stay within their zoning plan. If not, you may need to apply for a zoning variance or decide to locate your facility elsewhere. Design the facility to make the maximum use of space and create the most efficient work flow needed to produce your product. You will need to share this site plan with the sanitarian from Pennsylvania Department of Agriculture to ensure that their requirements for your facility and processes are met. Even if you researched the facilities requirements as you prepared your business plan, by the time you are ready to set up, the regulations may have changed, necessitating your having plans that now match what is allowable for food businesses.

Beyond the floor plan, you must arrange for adequate and appropriate equipment (including but not limited to steam kettles, stove tops, exhaust fans, steel counter tops, etc.) to take your product from the basic ingredients to a customer-ready product. When doing this planning, remember that not all equipment is in the kitchen -- your business resources may include delivery vehicles. Now is the time to secure these vehicles since any modifications should be made prior to the time that you begin to make sales and the actual delivery schedules are set.

Have facility inspected

To double-check what you are doing, your facility inspection is one of the most important steps in the process. Get your (potentially) long-term relationship off on the right foot by courteously listening to, and following, all of your inspector's recommendations. Once your facility has passed inspection and you have the necessary documentation, you may then begin to do several short test runs to make sure everything is in working order before starting full-scale production. Be sure to track all processes in your record keeping system as actual production costs may differ from those in your estimated partial budget that was part of your business plan. Allocate your fixed expenses to the cost of the process to determine your total cost of production, which will play a role in your selling price. If you are a farmer/grower adding value, be sure to assign a realistic value to the ingredients that you have grown, to help insure all costs are fully documented.

Securing additional ingredients

If you are growing your own ingredients, you can begin the processing of those materials into your finished product as soon as they are harvested. However, you will probably not be able to produce all of the ingredients just-in-time for many food items, so having purchased and stored the necessary materials slightly ahead of time will insure you are ready to begin processing your trial runs and to complete first orders. Make sure all materials are stored correctly so the possibility of contamination is reduced. Make certain your record keeping process is adequate to track all products and costs of those products, as well as the time of storage, refrigeration or freezing for good pre-inventory control.

If your plan shows that you will need to hire employees, you should begin the search and hiring processes. This will insure that when you are ready to begin production, you will have all of the necessary personnel to do so.

Contact any wholesale and retail customers and inform them that you are ready for production. Set your current selling price and inform the customers of any changes to the product or price since your initial contact with them. You can begin taking orders for product and determining processing schedules based on delivery needs.

At this milestone, your dream of having a food business is well underway! However, it is really at this point that much of the hard work will begin. Your production will be both market, and employee, driven. You do not want to over-produce what the market (and your storage facility) will bear. If your product is a perishable item, needing to discard a significant amount of food items because they are past shelf life becomes very expensive. Such costs may be ones you cannot recoup. You will also need to factor in the number of employees that you have, and the hours it will take for them to complete production lots, making full use of their time while avoiding costly overtime (when possible). This is because paying overtime for production or delivery adds to the total product cost. Remember that long hours for employees not only result in financial challenges, but may also affect morale.

You will need to track all product inputs (home grown and purchased ingredients) to be sure they are manufactured and stored to your specifications and standards. If you are using organically produced products, make sure the supplier has all documentation and certificates to allow you to advertise an organic product, and that what you do in adding value does not compromise the organic certification of the finished product.

You should constantly monitor all processes and procedures to maintain quality and reduce possible product contamination. Your monitoring should consist of checking temperatures throughout the process. If you are producing a product that requires heat to seal containers, make sure they are rated adequately to allow for the process to which you subject them. Check samples from each batch to be sure containers are completely sealed. If your food product requires cold temperatures for storage, closely monitor storage facilities to make sure that a consistent, correct temperature is maintained.

Equipment maintenance is another critical aspect of production. Well maintained equipment will generally last longer and reduce the possibility of parts or pieces being shed into the food product. Use high quality food-grade grease on any equipment where it may come in contact with food. A good procedure to follow is checking equipment at the end of the production session, while cleaning. Problems found at this time will allow for more detailed maintenance procedures before the next processing begins. Keeping good equipment maintenance records will serve you well. Delivery personnel and their vehicles are not exempt from routine inspection and maintenance practices.

Selling your product

Visit your wholesale buyers frequently to maintain good customer relations. By seeing where they place your food items in their establishment, you can make sure your products are stored correctly and displayed to the best advantage. It is also beneficial to observe customers while they are purchasing your products at the retail level, to discern what, if any, improvements need to be made. If you are the primary marketer, talk to customers directly to get feedback about the product, and make corrections or improvements.

Inventory control

The first-in-first-out (FIFO) is frequently the best inventory policy, especially for a perishable product (or one with relatively short shelf life). Even the most shelf-stable preserved products may turn color if stored too long, making them unsalable. FIFO ensures that the first products off the manufacturing line are the first products sold. Maintain your storage facility so that the oldest containers are rotated to the front, rather than buried, so this procedure works for you. Verify that FIFO is working by recording batch numbers when product enters storage, and again when it is shipped to the customer.

Good product record keeping is a key step in being able to conduct a product recall procedure, if it is ever necessary. Knowing when the food item was manufactured and where it was distributed is essential to contain a recall to the fewest units possible. Every food manufacturer hopes that he/she never has to conduct a recall, but if and when the occasion arises, your recall procedure must be already set up to reduce the cost of revenues and PR associated with "something going wrong."

Following all of the steps covered in this section of the workbook -- or reviewing your steps (if you have been in business for a while) to ensure that you did not miss anything important, will help your operation run smoothly and provide peace of mind that you are doing all you can, to ensure that your product is the best you can provide. Quality sells, and producing and maintaining the image of a quality product should be every food business owner's goal.

This material is based upon work supported by USDA/NIFA under Award Number 2010-49200-06201.

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Prepared by: Winifred W. McGee, Senior Extension Educator and Lynn F. Kime, Senior Extension Associate

Good Agricultural Practices/Good Handling Practices

Good Agricultural Practices (GAPs) and Good Handling Practices (GHPs) are voluntary programs that you may want to consider as many customers are now requiring some form of third-party auditing of food safety practices.

Food safety concerns start in the field where the "ingredients" are grown. Illness-causing microorganisms that were once unheard of have become more prevalent, and products previously considered safe are now causing an increasing number of illnesses each year. Even though fruits, vegetables and herbs were once thought of as "safe" products, they have recently come under fire as the causes of major food borne illnesses. These illnesses are primarily caused by bacteria, viruses, parasites, and fungi.

Beyond plant products, these microorganisms, often referred to as pathogens or biological hazards, are also associated with ground beef, poultry, eggs, and seafood. Cooking is a common method of easily killing most pathogens in those foods. However, since fresh produce is often consumed raw, other steps must be taken to ensure that both final products and ingredients are safe.

Good Agricultural Practices (GAPs) take into consideration that produce is exposed to naturally occurring, biological hazards in the soil, water, and air and that the potential risk for contamination is increased by certain production practices such as using manure for fertilizer and human handling of products.

It is incumbent upon all value-added and local foods producers/manufacturers to develop a safety plan that enables the management of the safety component of an agricultural operation by organizing the action steps identified as key to reducing key identifiable risks. Documenting of current practices and any changes over time is the first step that allows for monitoring the safety of the food product.

GAPs focus on four components of production and processing

Maintaining "clean soil," reduces the risk of contaminating the food grown in it with illness-causing microorganisms that naturally occur in the soil during stages of growth and harvesting. Improper manure management and application has the potential for increasing the populations of these micro-organisms tremendously. It is important to remember that pathogens are found in ALL manure. Some pathogen levels in the soil will decrease over time due to competition from other bacteria in the soil or because of less-than-desirable conditions.

"Clean soil," which minimizes the risks from manure, is attained by:

  • Reducing the risk of physical contamination from rain or irrigation splash by incorporating manure or using cover mulch after application.
  • Using high temperature, aerobic composting to reduce microbes
  • Applying manure to cover crops in the fall.
  • Applying manure in the spring two weeks before planting.
  • Allowing 120 days or more between manure application and the harvest of fruit or vegetables.

All water used for irrigation, cooling, processing, or for cleaning equipment and facilities should be free of microbial contaminants. Municipal water usually has the best quality because of previous testing and safety requirements, but it is rare for farms to have this water source. Ground or well water will have fewer pathogens than surface water (such as ponds, streams, or rivers) because there is less chance of contamination. By regularly testing water sources, an agricultural producer can document that water is not a source of contamination. The recommended frequency of water testing is dependent on the type of water source and the time of year. It is important to be more vigilant as harvest approaches and the water has increased contact with the product. The level of contribution that water has to product contamination also varies, based on the method and timing of water use. For example, use of drip irrigation (rather than sprinklers) helps to prevent water-based contamination because there is less soil splash.

There is a human element involved in food safety during production and processing, referred to as "clean hands." Poor worker hygiene and health, unclean clothing or shoes, or unsafe practices can threaten food safety. The farmer must provide clean and appropriately stocked restroom and hand washing facilities to field and processing employees, to reduce the incidence of product contamination. Skimping on restrooms, or not effectively training workers in their use, results in unnecessary product contaminants in the field.

Food items will have physical contact with many surfaces (including harvest equipment and containers, transport bins, knives and other utensils, sorting and packaging tables, product packaging, and storage areas) during harvest and processing. Basic GAPs to help ensure clean surfaces are:

  • Keeping potential contaminants (i.e., soil and manure) out of the processing area or facility.
  • Discarding soiled produce in the field and damaged produce prior to processing.
  • Using plastic containers and totes that can be routinely, efficiently cleaned and sanitized.
  • Cleaning and sanitizing equipment and facilities daily.
  • Including a sanitizer in produce rinse water to reduce bacteria.
  • Controlling animal contamination (from pets, wildlife, birds, insects, and rodents).
  • Developing guidelines for product storage and transportation.

Identify Your GAPs/GHPs Exposure

Whether you are an agricultural producer, or the manufacturer of a food product that depends on local inputs, the agricultural and harvest practices that are used have potential to increase the risk to your business. Take time to consider how much the GAPs and GHPs related to the ingredients you use will impact on your business. Describe this impact in the space provided:

If you are an agricultural producer, you will need to create a Food Safety Plan. Use this grid to begin taking the steps toward that important document.

Plan to do a yearly update during the off-season, of all monitoring records to figure out how to change what you do in subsequent years to make your food safety plan work for you.

List here your top 3 sources of risk associated with GAPs and GHPs, and then identify 1-2 strategies to manage each of these

Identify the one strategy you will use in the next 6 months, and list 1 step you will take to implement that strategy:

Strategy 1:

Iowa State University Fact Sheet, On-Farm Food Safety: Guide to Good Agricultural Practices (GAPs) , by Jason Ellis, Dan Henroid, Catherine Strohbehn, and Lester Wilson .

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Hazard Analysis Critical Control Points - HACCP

Having a Hazard Analysis Critical Control Points (HACCP) plan will help ensure a consistent product for sale. You will need to develop this plan for your operation and the following information will assist you with the process.

Hazard Analysis Critical Control Points (HACCP) is a useful tool in the prevention of food safety hazards. HACCP is not a stand-alone program-- instead, it is only one part of a multi-component food safety system. Other parts must include: good manufacturing practices, sanitation standard operating procedures, and a personal hygiene program (similar to the GAPs and GHPs discussed previously.

In the past, periodic plant inspections and sample testing were used to ensure the quality and safety of food products. Inspection and testing,. How-ever, these spot-checks were like a photographic snapshot, because they provided information about the product that was relevant only for the inspection or testing time. They did not cover what happened before or after, so these traditional methods offered little production or assurance from a public health and safety point of view.

HACCP was introduced as a system of continuous control in food safety as the product is manufactured, rather than trying to detect problems by testing the finished product. This new system is based on assessing the inherent hazards or risks in a particular product or process and designing a system to control them. Specific points where the hazards can be controlled in the process are identified.

Since its inception, HACCP has shown itself to be a system that fits well with modern quality and management techniques -- in addition to supporting the consumer expectations of safe food. It is especially compatible with the ISO quality assurance system and Just-in-time delivery of ingredients. Because of HACCP, manufacturers are assured of receiving quality products that meet their specifications, without having to conduct special receiving tests.

HACCP is incorporated in the food production process as follows:

  • A flow diagram of the complete food manufacturing process is created, to identify hazards (biological, chemical and physical) that may pose an unacceptable health risk to the consumer. analysis.
  • The significant hazards associated with each specific step of the manufacturing process are listed.
  • Preventive measures (temperature, pH, moisture level, etc.) to control the hazards are also listed.
  • Critical Control Points (that is, steps at which control can be applied and a food safety hazard can be prevented, eliminated or reduced to acceptable levels) are identified. Examples would be cooking, acidification or drying steps in a food process.
  • Critical, measurable limits of acceptability are designated for each of these CCPs and the ways to monitor them are assigned within the routine process for manufacture of the specific food. If the critical limit criteria are not met, the process is considered to be "out of control", because food safety hazards are not being prevented, eliminated, or reduced to acceptable levels, and the potential for business liability risk is increased.
  • Monitoring of these CCPs is accomplished through a planned sequence of measurements or observations to ensure the product or process is in control (critical limits are being met). It allows processors to assess trends before a loss of control occurs, because adjustments can be made as the process continues, assuming the monitoring interval is adequate to ensure reliable control of the process.
  • There must be pre-planned and written steps in place for disposition of the product and for correction of the process. If, for instance, a cooking step must result in a product center temperature between 165°F and 175°F, and the temperature is 163°F, the corrective action could require a second pass through the cooking step with an increase in the temperature of the cooker.
  • The HACCP system requires the preparation and maintenance of a written HACCP plan together with other documentation. This must include all records generated during the monitoring of each CCP and notations of corrective actions taken. Usually, the simplest record keeping system possible to ensure effectiveness is the most desirable.
  • After engaging the HACCP plan, there must be several verification steps taken:
  • The scientific or technical validity of the hazard analysis and the adequacy of the CCP's in ensuring food safety should be documented.
  • The effectiveness of the HACCP plan also needs to be gauged and documented.
  • To be of the best effect, the system should be subject to periodic revalidation using independent audits or other verification procedures.

By adhering to HACCP, a food manufacturer has a continuous and systematic approach to assure food safety, and thus reduce liability. As additional food safety related incidents occur, there is a renewed interest in HACCP from a regulatory point of view. Both FDA and USDA have proposed umbrella regulations which require HACCP plans of industry. As a small food manufacturer, you will do well to adopt HACCP approaches to food safety whether or not it is required for your specific venture.

Identify Your Food Production Risks

For every food product, there are specific points at which some oversight, testing, and recording of results would be warranted. Consider how HACCP applies to your food venture, and describe how it might reduce risk. Then evaluate who will take the lead in incorporating HACCP -- you, your suppliers, and/or your co-packer. Write what you have discovered in the space below:

Strategies to Manage Food Safety Risk

We have discussed that there are several ways that HACCP is part of a food venture. A food manufacturer can take the responsibility him/herself, studying the process, conferring with experts, and developing the flow diagram and resulting plan. In other instances, the control for HACCP will be with the supplier of ingredients, or with a co-packer who manufactures a packaged product. What strategies will you need to use, in order to assure that your food product is safe for consumers?

List here your top 3 sources of HACCP-related risk, and then identify 1-2 strategies to manage each of these risks.

Washington State University Food Processing Website , Hazard Analysis Critical Control Points (HACCP).

North Carolina State University Department of Food Science Website, HACCP Principles. By J.E. Rushing and D.R. Ward.

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Product and Business Liability

This article will highlight what types of insurance coverage you will need for your food business.

Every producer of a value-added product should carry product liability insurance. If you are planning to produce the product in your home kitchen, you first need the kitchen inspected and approved by the Pennsylvania Department of Agriculture (PDA). Your current home owner's policy carries no product liability insurance so you will need to purchase a commercial or business policy and you may wish to add additional product liability insurance. Most business, commercial, or farm owner's policies include a minimum coverage level of $300,000 protection. Food product liability insurance only covers claims of injured parties and not any costs incurred for a product recall. There are several types of products to cover these expenses and others. More information about these products is covered in the Insurance Coverage Options for Fresh Produce Growers fact sheet from the North Carolina State University A & T which is contained in this informational workbook. When purchasing any insurance, you should consider the level of coverage based on what you are willing to pay out to satisfy a claim awarded to someone. You should then cover the remainder of your assets with an insurance product.

The premium for product liability is based on several factors. If you are just beginning, you will need to estimate the amount of sales you will have during the year. The more sales you have or predict, the greater the premium. It will not benefit you to underestimate this figure to reduce premiums. In the event of a claim, your insurance company will audit your records and any discrepancy may reduce coverage. If you have been in business, you can use your sales history to determine this figure.

There is an experience factor when pricing a product liability policy. This means that if you do not have several years of experience your premium may be higher than someone with three or more years' experience. This is because insurance companies determine that experience reduces risk, much the same as insurance for a young driver is higher than for an older more experienced driver. Most policies for food manufacturers contain $300,000 product liability coverage. If you determine that you need additional coverage, it will cost an additional 3% on average to move to $500,000 coverage. This increase in coverage may be necessary depending on your situation. If you determine that $500,000 is not enough coverage for your business, the average increase to move to $1M is 10% more than the initial $300,000 coverage level. Many farmers markets are now requiring this $1M coverage level before you can participate at the market. Some producers are also increasing coverage to more than $1M.

There are many items you will need to provide to your insurance agent to allow that person to adequately assess your insurance needs. These include the following:

  • The entity description
  • Address including post office box
  • Locations of operations and satellites if any
  • Additional individuals/entities insured with addresses and their interests
  • Loss Payees & Lien-holders
  • All available phone numbers & contacts
  • Values of product, buildings, stock, vehicles
  • List of all licensed operators of vehicles with pertinent information
  • Written description of operation
  • Radius of operation
  • Fire & Burglary Protection
  • Number of employees & work experience
  • License information & safety certificates
  • Estimated gross receipts

Another method of reducing risk when producing a food product is your business structure. You may think that when just starting the enterprise that you can operate as a sole-proprietorship to reduce start-up costs. This may be an acceptable business structure for a business with less inherent risks however; a food based business carries a higher level of risk than producing a crop. You will be taking steps to process raw products and ingredients into a finished product and each step increases your level of risk. Because of these additional levels of risk, you should consider a business structure that may reduce the risk exposure to your personal assets. Consult your accountant and legal advisor to determine which structure best fits your operation.

There are three types of claims a food manufacturing company may face be-cause of someone becoming injured from a product. These are:

  • Manufacturing or production flaws. This claim will state that some part of the production process created an unsafe defect in the final product. An example of this type of claim may be that a piece of glass was present in a product you produced and could harm a consumer if ingested.
  • Design defect. This claim states that the design of the product caused someone harm. An example of this claim may be that your product or packaging design harmed a consumer.
  • Defective warnings or instructions. This claim states that you failed to warn your consumer that something in the product may harm them. An example of this claim would be that you used tree nuts or peanuts (or other allergen), in the ingredients and did not include a warning on the product label.

Pennsylvania laws follow the "stream of commerce" model of liability. This means that anyone placing any component of a product into the stream of commerce is liable in the event of damages. The person who grew the raw product, the person who added value to the raw product, and any business that produced any of the inputs are liable. However, the business that combined the raw product and all other inputs is the most liable since that business created the end product. If you are producing a baked good, the person who grew the wheat will be listed in court documents but that person's level of liability will be smaller than yours because you processed the final product.

When producing a food product, there are requirements of what must be Included on the label. You must follow these requirements and you may consider adding other elements that may reduce your risk level. You must list ingredients, nutritional information, size (net weight for example), and the company's name. There are additional items that may be included that will reduce your risk exposure.

For example, if your product contains any peanuts or peanut oil, you should include an allergy warning on the label. This will show that you attempted to inform the consumer that an allergy attack is possible. You should research all possible allergies and your ingredients to determine what you may need to include. We have all seen the warnings on hot beverages due to the McDonalds™ incident with coffee. These warning will at least demonstrate "good faith" to warn consumers of possible injury causing possibilities.

Your record keeping system for tracing a product back to the date it was produced is also a key item in risk management. When you discover that a food product may be contaminated, being able to trace that item throughout the entire process from production to consumption will be invaluable. You may be able to recall only that batch of product thus reducing the amount of potential consumers injured by your product and product destroyed. Being able to trace back products may reduce the risk level for your business.

There are many court cases that have been argued against food manufacturers. These cases provide many scenarios for attorneys to use to prove damages to their clients. Under strict liability the product itself is the focus and the manufacturer is liable for all processes involved in making that product. If the product is defective or contaminated the producer of the product is liable even if they are not negligent while making the product.

Because of all the issues mentioned above, you should not operate without product liability insurance and a comprehensive risk management plan. You should tell your insurance provider before you begin a food based business. You will need to work with that person to determine your level of risk expo-sure and how you want to protect your personal assets. Having protection in place before it is needed is always the best procedure. The best business people know that insurance is an integral part of doing business. Insurance will be in the top five items of your yearly expenses however, doing business without insurance coverage is not recommended.

Develop Your Plan to Address Product and Business Liability

To develop your risk management plan, you need to identify the legal actions that you need to take for your food venture. Once you have a clear picture of what needs to be done to reduce legal risk, you can identify the tools you'll use to address the risks.

Strategies to Manage Legal Risk

Having adequate insurance, keeping vigilant about court decisions related to food liability, and ensuring that your business structure is effective are all ways to manage your legal risk. Which one will be the most important to your business, and why?

How does your legal strategy interface with any of the other four areas (GAPs/GHPs, HACCP, allergen notification, and proactive recall planning) that were discussed in the workshop?

List here your top 3 sources of legal risk, and then identify 1-2 strategies to manage each of these risks.

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Food Allergens

Many people suffer from food allergies. This article will inform you of the necessary steps to warn consumers of potential allergens contained in your product(s).

Food allergic reactions can range from mild oral symptoms to severe anaphylactic shock in which multiple body systems react simultaneously. An estimated 30,000 episodes of food related anaphylaxis occur each year in the U.S., resulting in approximately 2000 hospitalizations and 150 deaths.

The main preventative recommendations for people with food allergies are to carefully read product labels and carry medications in case of a reaction. Therefore, it is extremely important that product labels be accurate and credible. The Food Allergen Labeling and Consumer Protection Act of 2004 (FALCPA) required that the top eight allergens be bolded on food labels or be listed in a "contains (allergen)" statement at the end of the ingredient list. A 2008 Eastern Michigan University study showed that, in the two years immediately after the FALCPA was passed, the annual accidental food allergen ingestion rate of adults decreased by a significant 24.4%. Additionally, the percent of accidental food allergen ingestion events due to store-bought food decreased. Therefore, food manufacturers should be diligent about indicating the presence of any of the top eight allergens in their products -- not only because of the law, but also because of the effectiveness of these notices in reducing consumer allergy incidents.

The eight (9) major food allergens include

  • Tree nuts (like walnuts or pecans)
  • Wheat (this includes gluten)

To reduce the risk of individuals accidentally consuming any of these, it is important to not only list their presence when they are an intended ingredient in a food product, but also to test food products that have been made in the same kitchen where other foods with these allergens were made, or when the same equipment has been used to make other foods which do contain one or more of the above allergens.

In general, allergen warnings must be put on all foods even if the products that carry these allergen risks are listed in the ingredient list. The allergen warning must say: Warning: this product contains foods that may cause an allergic reaction. This product contains (name product/s). If a food product is made from ingredients manufactured by another supplier, the labels of prepared ingredients must be checked, and applicable allergen alerts must be included on the resulting product's label.

As an example, Nut Warnings must be put on: any food containing nuts or nut derivatives (including almond extract, peanut oil, walnut oil or other nut oils). These warnings must also be placed on the package of any food that has been prepared with chocolate or other prepared food that has a nut warning on it (e.g. cookies prepared with M&Ms in them OR any food that has been prepared in the same kitchen at the same time foods with nuts were prepared (e.g., one batch of brownies was made with nuts, the other without). In all these instances, the Nut Warnings must say:

Warning: This product contains ground nuts or tree nuts or ingredients derived from nuts. OR Warning: Nuts. This product was made in the same facility as other products containing nuts or where nuts are handled. (ONLY if there are no nuts directly in the product.)

The resulting Sample Label of such a product would read:

Chocolate Chip Cookie Ingredients: Wheat flour, sugar, butter, vegetable shortening, eggs, chocolate (contains cocoa solids, cane sugar, lecithin, vanilla), pure vanilla ex-tract, salt. Warning: This product contains foods that may cause an allergic reaction. This product contains wheat, milk products, eggs, and was made in the same facility where products containing nuts were made or where nuts were handled.

In relation to strict liability, case law suggests that, although restaurants are generally not liable for failing to warn food allergic consumers about the presence of allergens in restaurant food, those same restaurants may have some duty to warn consumers about food allergens. Section 402(A), comment j, of the Restatement (Second) of Torts has been adopted by courts:

In order to prevent the product from being unreasonably dangerous, the seller may be required to give directions or warning, on the container, as to its use. The seller may reasonably assume that those with common allergies, as for example to eggs or strawberries, will be aware of them, and he is not required to warn against them. Where, however, the product contains an ingredient to which a substantial number of the population are allergic, and the ingredient is one whose danger is not generally known, or if known is one which the consumer would reasonably not expect to find in the product, the seller is required to give warning against it, if he has knowledge.

Therefore, it is important for all food manufacturers and restauranteurs/caterers to:

  • Carefully review the ingredients of their products, noting the intentional presence of any allergens.
  • Design warnings (on packaging or in menus) that ensure that these ingredients are known by consumers, so that they can make an informed selection.
  • Carefully assess products that do not, in themselves, have an allergen as an ingredient, to determine whether they still might come in contact with equipment, or facilities, where the allergen is present.

In cases where food might have unintentional allergen content, it is important to test the product for residue (using a standard enzyme-linked-immunosorbent-assay (ELISA) process) and notify the public that the product "is made in the same facility where (named allergens) are present."

In this way, food business risk is lessened, through clear consumer information, and your profile as a vigilant, caring manufacture is enhanced.

Develop Your Allergen Notification Plan

To develop your allergen notification plan, you need to assess your food product(s) for the intentional use of any of the 8 food allergens. You need to check with suppliers for the contents of their items that you include in your food products. You also need to assess your facility, equipment, and practices to deter-mine whether unintentional allergen content may be in the food that you sell. Which of these sources of allergen will be the most significant one for your product(s)?

Strategies to Manage Food Allergen Related Risk

The amount of risk associated with allergen-related incidents continues to rise for food ventures. Regardless of whether a business creates packaged products (where the allergens must be acknowledged in writing) or serves ready-to-eat items that may contain allergens (as a restaurant or caterer), it is incumbent upon the food manufacturer to make sure that contents or contact with any of the 8 allergens is clear to the consumer. How active do you believe that you will need to be, in identifying and dealing with allergens?

List here your top 3 concerns related to food allergen risk, and then identify 1-2 strategies to manage each of these risks.

Food Allergens: Food Safety for the Non-Food Scientist . By Dr. Aurora A. Saulo, University of Hawaii at Manoa

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Proactive Recall Plans

Having a recall plan in place will be critical if the need for a recall occurs. Practicing the recall plan on a regular schedule is also helpful in determining if the plan actually works.

The term "food recall" can mean a wide variety of activities -- but in essence, it is any corrective action by a company needed to protect consumers from potentially adverse effects of a contaminated, adulterated, or misbranded product. Recalls are voluntary actions, initiated by a recall decision made by the company management. In some cases, if the company does not initiate a recall, the government agency responsible for the particular product category may request that the company do so. Recalls are conducted by industry in cooperation with federal and state agencies.

No food business hopes for a recall. By employing Good Manufacturing Practices (GMP) and Hazard Analysis Critical Control Points (HACCP) plans, businesses seek to prevent recalls. However, even the best managed businesses can make occasional mistakes. It is important to be ready for a recall well before a problem occurs, with company management integrated into the recall plan and team. It is not enough to just rely on product liability insurance! While liability insurance might cover a portion of the losses due to recall, it will not cover the expense of product retrieval and most importantly, liability insurance will not help the company regain one of its biggest assets for sustainability -- customer trust.

Despite the undesirable nature of a recall event, it is in the best interest of the manufacturing company to complete the recall quickly. Because the manufacturer is responsible for all of the costs involved in this process, it is critical to have a plan to cover recall expenses, to expedite the process with-out creating negative public opinion, and to prevent down time. How this all will come about should be well-thought-out ahead of time, because when crisis hits, it is too late to work on the recall plan. Generally, recall events should be included in the Crisis Management and Emergency Contingency Program for a company (a document that few businesses seem to have).

Factors prompting a food recall include but are not limited to:

  • unsafe, contaminated, or mislabeled product,
  • nonconformities to manufacturer's specifications, and
  • missing allergen or other hazard warnings.

Although a recall may be perceived as a failure, as long as a proactive, rather than reactive, approach is taken, the company's reputation can be recovered and even improved as they demonstrate a commitment to consumer safety and service. The recall process includes withdrawal of an unsafe or substandard product from the market and distribution channels, as well as the return of already purchased product from consumers. Rapid removal of products from the market requires a well-documented product code and tracking system be in place. The need for a recall is determined by the potential health hazards of a product, and the extent of recall is implemented according to the classification of hazard.

Starting from the year 2000, USDA requires a press release to be issued for every recall even if the product had not yet reached consumer channels. To notify the public in the event of a product recall, the press release and the Recall Notification Report are posted on web sites maintained by federal agencies, as well as state health agencies.

Purpose of a Recall

A company's food safety policies, ethical understanding, regulatory requirements, and financial constraints all determine the recall concept that is adopted. An effective recall procedure will protect not only the consumer, but also the company. A smooth recall process can save a company's name and prevent further damage due to negative publicity. Destroying, replacing, or altering the product are the three main corrective actions. A recall plan should strive to achieve the following goals:

  • Protect consumer health
  • Comply with existing rules and regulations
  • Minimize the cost of the recall
  • Regain and improve the company's reputation
  • Outline of a Successful Recall Process

Although each business may have variations on who does what activities within the recall and how the process will be carried out, all successful recalls have these things in common:

  • Planning ahead: A successful recall process depends on planning of the recall management well before a problem occurs.
  • Acting quickly: The sooner harmful or misleading events are prevented, the faster the negative publicity and financial burden are eliminated.
  • Effective communication during a recall: The firm should immediately provide recall instructions to everyone in the product distribution channels.
  • Recall assessment: Post-recall assessment is extremely important in determining the effectiveness of the recall plan in order to improve the efficacy of potential future recalls. The current recall plan also should be evaluated through simulated recalls.

What can you do to be prepared for a recall?

The actions necessary to be ready to implement a recall are:

  • Select a recall coordinator and establish a recall committee.
  • Prepare a recall action plan.
  • Keep the contact information in the recall plan up-to-date.
  • Conduct mock recalls to test the effectiveness and promptness of the recall plan.
  • Revise the recall plan based on mock recalls.
  • Establish a product identification and tracking system.
  • Conduct timely stock rotations, and maintain good records for the supplied products, invoices, and bills for purchased and sold products.

Develop a customer inquiry and complaint database to identify major problems. The questionnaire for collection of information from consumers should be designed to get as much information as possible regarding the problem. The frequency of the calls related to the same problem should be recorded.

To be able to implement the necessary actions in the event of a recall, you need to have a well-considered recall plan.

What should you include in a recall plan?

A recall plan is prepared in order to act quickly and effectively to locate the product, to remove the product from the market, to quarantine the product, to identify and to correct the root cause in order to prevent recurring, and to reassure the consumers about the establishment's commitment to consumer safety. Therefore, the recall plan should describe in detail the procedures that the establishment will follow and the responsibilities of individuals during the recall. The recall committee selected and managed by the recall coordinator prepares the recall plan.

A recall plan should include the following items:

  • Purpose: This step includes statements defining the company objective for preparing the recall plan. It should define the scope of the products covered under the recall plan. As a starting point, all products produced under a single HACCP plan, including cleaning and sanitation procedures, could be included in the recall plan. The scope of the recall may expand or contract from this point.
  • Definitions: In this section, the terms related to the recall and the level of recalls are defined. The terms include: recall, market withdrawal, stock recovery, recall classification, class I, class II, and class III recalls.
  • Responsibilities: The roles and responsibilities of every individual participating in the execution of the recall should be clearly specified in the recall plan. The recall plan should include all current contact information (office and home telephone numbers, fax numbers, mobile phone numbers, e-mail ad-dresses) for members of the recall committee and their deputies and should be updated frequently.
  • Fact gathering about the defective product:
  • Internal discovery: A defective product may be spotted internally (company plants, warehouses, co-packers). The seriousness of the problem should be rapidly evaluated by the plant manager and the quality assurance manager in the plant and/or the supply chain. If the problem is considered to be serious, the recall coordinator should be alerted immediately.
  • External discovery: Every complaint about a product should be investigated by consumer services, sales and marketing department, and regional technical management to evaluate the seriousness of the problem. If the problem is judged to be serious, or even if there is an element of doubt, the recall coordinator should be alerted immediately.
  • Health hazard evaluation and recall classification: The recall plan should state the potential defects and hazards for the products in scope of the recall plan and the corresponding recall class. At a minimum, this evaluation should take into account whether any disease or injuries have already occurred from the use of the product, an assessment of how serious the health hazard is, an assessment of the immediate and long-range consequences of the hazard, and an assessment of the ability to identify and quantify the defective product in the marketplace.
  • Identification of the regulatory agency: After the recall coordinator makes the decision to initiate the recall, he or she contacts the regulatory agency. Therefore, the contact information for the individual in the appropriate regulatory agency should be included in the recall plan. The recall coordinator provides the Product ID (name, code number, lot number, size), the reason for recall, how the problem was discovered, the quantity of product that was manufactured and distributed, the distribution records for the affected product, a copy of any recall communication that has been issued, the recall strategy and depth, and a public warning.
  • Recall communications: Appropriate and effective communication during recall is essential for a successful recall process. The recall plan should include a generic press release, a generic communication letter for affected affiliates, information specifying how contact will be made with media, and a name and contact info for the designated spokesperson.
  • Recall status reports: The recall plan should include a policy to document the number of consignees notified, number of responses versus non-responses, and quantity of product accounted for, all of which are necessary for recall effectiveness checks.
  • Not Returned product: The recall plan should include the following statements to clearly define the strategies regarding the returned product:
  • Returned products will be quarantined until the termination of the recall.
  • Quarantined products will be reprocessed or disposed of after receiving the approval of technical management.
  • FDA will be notified for approval of planned method of disposition because FDA may wish to witness final destruction of Class I articles.
  • Recall termination: The recall plan should clearly define the policy to be implemented to end the recall process.
  • Appendices: The suggested appendices include a press release template and a sample press release from FDA, a product withdrawal for template, and the recall plan flow sheet.

Once a recall plan is established, the recall team should conduct practice or "mock" recalls to ensure the plan's effectiveness and to detect pitfalls in the plan. Mock recalls should be conducted without prior knowledge of the personnel involved. A mock recall assesses the recall team's ability to use the plan to conduct a review of records related to processing, raw product, ingredients, and containers, and to determine the distribution of the product with the given lot code. Such exercises can also determine the distributors' (including brokers) ability to locate product rapidly. If there are major problems or it is taking too long to obtain the necessary information, it is strongly suggested that the recall team get help from external organizations and/or consultants.

Develop Your Product Recall Plan

The entire food manufacturing process is centered around a series of activities that should lead to quality, safe products. However, sometimes things get out of control, and a faulty batch, or erroneous labeling may occur. When that happens, it is important to protect the integrity of your company's name and reputation by quickly owning up to the error and "making good." Being able to act in an emergency is enabled by making plans ahead of time, and running drills to make sure that the plans are sound. Think about the actions that you can take, now, to be ready for the unexpected, and jot them down here.

When a recall must occur, it is just as important that WHO will be involved is known ahead of time as WHAT they must do to resolve the problem. Use the chart below to identify the people involved, and the areas they represent.

Food RM-Flow chart

OSU FactSheet AEX-253-05, What can you Do to be Ready for a Recall? By Dr. Gonul Kaletunc and Dr. Frehan Ozadahi, The Ohio State University.

Food RM-Logos

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How to create a risk management plan for your restaurant business in the USA

Management Plan

When one undertakes the thought of opening a new restaurant or launching a venture, it is essential to consider the risks that would likely be met while on the journey. Preparing for the worst should be on every new entrepreneur?s list. Therefore, it is vital that before undertaking a new restaurant business, a solid full proof risk management analysis or a strong risk management plan has to be made. 

Formulating plans such as;

  • Training restaurant employees
  • Maintaining the restaurant?s facilities
  • Health and Safety codes of conduct
  • Obtain appropriate licensing
  • Preparing for closed closures, etc. can help in leading to a profitable and risk-free management plan for your restaurant business in the USA.

Be it the USA or any other place on the globe, undertaking a proper risk management plan is equally important. Dodge a bullet of risks in the USA?s restaurants could be avoided by undertaking the following steps.

1.  Proper training of the employees at the restaurant

One of the main faces of the restaurant and its image is the type of employees that work there. They are more of the heart of your business; therefore, it is crucial to safeguard your restaurant?s image by providing proper and complete training to the employees that work for you at your restaurant.

They are more aware of the day-to-day functioning of the restaurant due to which they are more likely to safeguard the norms and risks involved in day-to-day functioning.

Everyone should be trained the best according to their levels, from attendants to chefs. For this, the employees should be assured of a few necessities such as;

Management plan for your restaurant business:

Ensure Safety at the workplace

Complete help and assistance at the workplace

Free and helpful training services

Friendly environment pre- and post-training period

Polite and reliable Customer Service Assistance

Proper Training for Alcohol Service

If your restaurant serves alcohol, you are at risk of people damaging the laws after being intoxicated, hence forming law plans and making them understand your employees is necessary yet again.

2.  Maintaining the Facilities and Infrastructure of the Restaurant

Under this head, special care of things is to be taken at the restaurant. The facilities and the ambience you make are to be well facilitated and checked out from time to time. 

Make sure that

The Kitchen is to be kept neat, clean and without any strong or bad odour.

Not only from the perspective of health and hygiene matters but from all the other perceptions, the Kitchen should be kept clean. The food storing unit should be timely checked, the spills should be straight away cleaned, things should be organized and well maintained, heavy electricals such as refrigerators, ovens and/or other machines should be properly cleaned, the utensils should be cleanly washed and used.

Make room for signage boards and areas

God forbid, in case of an emergency, there should be a place for the people in the restaurant to evacuate immediately. Perhaps, room for Entry and Exit should be there which is easily noticeable.

Railing, Windows, Doors, etc. function well and are maintained properly

Making sure of the functioning of windows, doors and railing is important to stay away from mishappenings.

Keeping the environment and walkway immaculate

When a customer walks in, he should forget about his worries and the outer world how should he be mingled by the ambience and cleanliness of the restaurant?

3.  Mapping out Health and Safety Codes of Conduct

After the deadly pandemic, people have now started taking healthy measures much more seriously. But not because there had been such a devastating pandemic, but because health and hygiene are top priorities, the restaurants should map out clear health and safety codes of conduct such as

  • Provision of Fire Extinguishers
  • Prohibition of Smoking in any place (Rather a smoke zone should be provided)
  • Provision of First Aid Service
  • Provision of Air Ventilators in the Kitchen as well as the main room
  • Timely checking of the Stored and Preservative Food especially stored or preserved non-veg.

4.  Obtaining Appropriate License

Be it a local shop or a gigantic business, a legally authorized license is a must. The license is a reflection of the authority that you hold and gives you the privilege of the smooth running of your restaurant. In times of problem, a license helps you in proving your worth and the mark of your restaurant. Without a license, your restaurant will not be counted legally and authorities have complete rights to ban your organization which here is your restaurant.

Some major and basic licenses on a mandatory basis are

  • Business License
  • Liquor License (If the Restaurant serves Alcohol)
  • Food Service License
  • Driver?s License (If the Restaurant has a food delivery facility)

5.  Let your Restaurant be technologized

Technology has not left to embark its mark upon any field, and so it is with restaurants. Restaurants have seen much new technology being introduced. From the digital menu to the digital way of ordering your favorite platter, every inch of it had been well-equipped and set in motion with technology. But this time technology has to be used to

  • Safeguard WIFI Passwords
  • Install Anti-virus Software
  • Install CCTV Cameras

6.  Prepare for Food Closures

In case of an emergency, closures will come to your help. The functioning of a restaurant will always welcome the circularity of income and expense. In certain scenarios, there might be mishappening, when forced closures might take place. For such instances, forced closures should be planned and prepared on a prior basis to refrain from last-minute extra expenses.

Owning a restaurant is definitely fancy, but running it smoothly is all it takes. But, Shoocal is here to help you find the best solution in order to run a risk-free restaurant .

Management Plan

Copyright © 2022, Shoocal Ventures Private Limited. All Rights Reserved


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