Manage Risk: A Risk Management Plan for Smith Cafe

This document provides a risk management plan for Smith Cafe, a restaurant located near a waterside location. It covers the scope of the risk report, background information about the cafe, the purpose of the risk management plan, stakeholders involved, identification of risks, assessing potential risks, creating a risk register, a risk treatment schedule, and reviewing the risk management plan. The document also includes references to relevant books and journals.

MANAGE RISK

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Scope of risk report......................................................................................................................3
1.1 Background information.......................................................................................................3
1.2 Purpose of risk management plan.........................................................................................3
1.3 Stakeholders..........................................................................................................................3
2. Identification of risks with scope.................................................................................................4
3. Assessing potential risk................................................................................................................5
4. Risk register.................................................................................................................................6
5. Risk treatment schedule...............................................................................................................7
6. Risk action plan. ..........................................................................................................................8
Risk action plan table:.................................................................................................................8
7. Review the risk management plan.............................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The term risk can be defined as a possibility of loss on invested project. It is essential for
companies to minimise risk so that higher return can be gained (Giannakis and Papadopoulos,
2016). Though, this is being said in the business that “higher risk leads to higher return” but
companies can take too much risk as they invest huge amount of capital. The project report is
based on a restaurant which is located near waterside location. The name of restaurant is Smith
cafe. The project report covers information about risks which are faced by chosen business and
way to manage risks.
MAIN BODY
1. Scope of risk report.
1.1 Background information.
The business which is chosen in this report is a cafe which is located near waterside. It is
involved in providing food services to customers.
Operations- The cafe will provide all sort of food including breakfast, lunch, dinner as well as
bar and catering services. Apart from it, it will also offer kinds menu too for children.
Customer base- The cafe' s menu states that it is suitable for all types of customer including
male, female, children.
1.2 Purpose of risk management plan.
The risk management plan is a type of risk assessment matrix which find out estimated
risks, make projection of impact and set responses towards risk. It is crucial for companies in
order to minimise negative effect of risk on performance. For above Smith cafe, this plan can be
beneficial in order to overcome those risks which may occur in establishing business such as risk
of existing competitors.
1.3 Stakeholders.
(a) Stakeholders for which risk management report will be prepared?

Companies prepare risk management report for different stakeholders including internal
and external stakeholders. In regards to Smith cafe, they will prepare risk management plan for
below mentioned stakeholders:
 Customers- This is main external stakeholder for companies, and it is essential for them
to prepare risk management report (Brustbauer, 2016). Such as for above Smith cafe,
there can be risk of lack of attraction of customers. Hence, it is important for them to
prepare risk management plan.
 Government- It is also a stakeholder which can affect companies. If government makes
change in their plans and policies against businesses then there can be risk of lose. Like
in above cafe, they should make risk plan to overcome negative impact of changed
government policies.
(b) Which stakeholders will be involved in risk identification?
 Managers- These are the main internal stakeholders who should be included in the
process of risk analysis. It is so because they are responsible for preparation of plans and
policies.
 Employees- The employees should also be included in the process of risk identification.
Such as for above Smith cafe, it is important for them to include employees in order to
find out the risks.
2. Identification of risks with scope.
Risk which may be faced by above cafe?
1. Operational risk- Operational risk describes
the ambiguities and risks faced by a firm when
attempting to conduct its day-to-day business
operations within a particular field or industry
(Van Staveren, 2018). Such in above company,
they can face this risk due to any injury to
their staff members or because of any reason.
6. Natural disaster risk- This is a form of risk
that is uncontrollable by human resources. For
example the above Smith cafe can face this
risk if any natural disaster occurs like flood.
2. Supply chain risk- Supply-chain risk is a 7. Competition risk- This is a risk which is

feature of the probability of the incidence of an
occurrence and its effect. In the above
company, they can face this risk if suppliers of
raw material increases their prices.
faced by new companies from established
firms. In Smith cafe, they can face this risk due
to higher level of competition.
3. Human resource risk- It is a type of risk
which is can be faced by companies if there is
shortage of skilled staff members.
8. Political risk- This risk occurs due to change
in political conditions (Sweeting, 2017). Like
in above cafe if there is political instability
then they may face this risk.
4. Financial risk- This is a kinds of risk that
occurs due to lack of financial resources or
change in economic condition. Like in the
above cafe, they may face this risk if
economical condition changes negatively.
9. Man made disaster risk- This is a risk which
includes material spills, fires, transportation
risk etc. In the above cafe, this risk may occur
if their managers fail to execute effective
policies.
5. Technology risk-It is a risk which occurs
due to failure of technology (Meyer and
Reniers, 2016). In the above cafe, they may
face this risk if applied technology does not
work according to function.
10. Reputation risk- It is a risk that is related to
decreasing in goodwill of companies. In the
above cafe they may face this risk of lower
reputation if they do not satisfy to customers.
3. Assessing potential risk.
Risk Likelihood Insignificant Minor Moderate Major Extreme
Operational
risk
Frequent ✓
Supply
chain risk
Possible ✓
Human
resource
risk
Possible ✓

Financial
risk
Likely ✓
Technology
risk
Probable ✓
Natural
disaster risk
Rare ✓
Competition
risk
Possible ✓
Political risk Likely ✓
Man made
disaster risk
Unlikely ✓
Reputation
risk
Uncommon ✓
4. Risk register.
Heading Risk Likelihood rating Seriousness
rating
Risk grade
Operational
risk
Injury to staff member Likely Major Higher
Supply chain
risk
Increasing of rates by
suppliers
Likely Major Medium
Human
resource risk
Lack of skilled
workers
Likely Normal Medium
Financial risk Lack of financial
resources
Likely Major Higher
Technology
risk
Failure of technology Unlikely Major Medium

Natural
disaster risk
If flood occurs Unlikely Major Higher
Competition
risk
Higher competition by
existing firms
Likely Normal Higher
Political risk Unstable political
condition
Likely Normal Medium
Man made
disaster risk
Failure of
organisational
structure
Likely Normal Medium
Reputation
risk
Unsatisfied customers Unlikely Major Medium
5. Risk treatment schedule.
Risk Possible
Treatment
Options
Risk Grade
(From above)
BEFORE
Treatment
Risk
Grade
AFTER
Treatment
Person
Responsib
le for
Implemen
tation
Timing –
when will
it be
carried
out – the
timetable/
schedule
How will
it be
reported/
monitored
?
Operation
al risk
By focusing on
day to day
activities.
Likely+ Major=
Medium
Rare+mod
erate=
Low
Operation
al manager
Immediate By
evaluating
all
activities
on a daily
basis.
Supply
chain risk
Finding suitable
suppliers.
Likely+Major=
Higher
Possible+h
igher=
Higher
Production
manager
Immediate Checking
rate of
provided

material
by
suppliers
Human
resource
risk
Hiring higher
skilled
candidates
Likely+Normal=
Medium
Rare+mod
erate=
Low
Human
resource
manager
After few
months
Evaluating
activities
of
employees
at work
place
Financial
risk
Increasing level
of financial
aspects.
Likely+Major=
Higher
Possible+h
igher=
Higher
Accountan
ts
Immediate Checking
prepared
financial
statements
Competiti
on risk
Preparation of
effective
strategies
Likely+Normal=
Lower
Rare+mod
erate=
Low
Branch
manager
After few
months
Analysing
exist
policies
and plans
Reputation
risk
Satisfying both
internal and
external
stakeholders
Unlikely+Major
= Medium
Possible+h
igher=
Higher
Manager After few
months
By taking
feedback
of
customers
6. Risk action plan.
Risk action plan table:
RISK ACTION PLAN – Action Plan 1
Risk Supply-chain risk
Summary – The goal of this action plan is
to minimise risk of supply-chain. As it is

impacting negatively to financial position
of above cafe.
Proposed Actions In this aspect, it is essential for company to find out more
suppliers who are providing similar raw material then try to
make comparison between prices.
Resource Requirements For this purpose more number of staff members will be
needed as well as financial resources will also needed.
Person Responsible for
Implementation
Production department
Timing – when will it be
carried out – the
timetable/schedule
Immediate
How will it be
reported/monitored?
By analysing rates of provided material by chosen supplier.
RISK ACTION PLAN – Action Plan 2
Risk Financial risk

Summary – The goal of this action plan is
to minimise risk of financial aspects. As it
is impacting negatively to performance of
above cafe.
Proposed Actions In this aspect, it is important for financial managers to get
financial assistance from different institutions at lower cost.
Resource
Requirements
Some amount of cost in order to conduct research for different
alternatives of providing funds.
Person Responsible
for Implementation
Finance manager
Timing – when will
it be carried out – the
timetable/schedule
Immediate
How will it be
reported/monitored?
By checking availability of funds in order to make payment of
debts.

7. Review the risk management plan
(a) Evaluation of process used for risk management.
In the above part, two risk management plan has been prepared in order to find out level
of risk and needed resources to overcome impact of risk on companies performance.
(b) Which risks will be reported on?
There are two types of risk which should be reported on like supply-chain risk and
financial risk.
c) How often will risks be reported to management
In accordance of level of risks, these should be reported immediate to management. This
is so because these risk can impact the performance of above cafe negatively.
(d) Who is responsible for reviewing risk?
Name of risk Responsible person
Supply-chain risk Production manager
Financial risk Financial manager

REFERENCES
Books and journal:
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics. 171. pp.455-470.
Brustbauer, J., 2016. Enterprise risk management in SMEs: Towards a structural
model. International Small Business Journal. 34(1). pp.70-85.
Van Staveren, M., 2018. Uncertainty and ground conditions: a risk management approach. CRC
Press.
Sweeting, P., 2017. Financial enterprise risk management. Cambridge University Press.
Meyer, T. and Reniers, G., 2016. Engineering risk management. Walter de Gruyter GmbH & Co
KG.