Melbourne is located in the State of Victoria, Australia. It has the highest population in the State of Victoria. Melbourne has a much diversified economy which is characterized by a well developed infrastructure system, high technology, tourism, good logistics and transportation activities. Due to the presence of a good economy in the city, the business of selling food would do well. High population in the city would create a high demand for the product. However, there are risks which may act as a challenge in selling of the food and beverages. The risks and the mitigation measures are discussed below.
Financial risk involves how the business finances are used. Financial risk may be caused by borrowing a lot of money to start the business. This increases the debt of the business. The risk may arise where the business uses a lot of money in fuelling the vans instead of buying raw materials for food and beverage preparation. Financial risk may also arise due to poor planning of how to allocate the available funds in the various activities to be carried out. The activities to carry out include fueling the van, buying of the raw materials to be used and payment of salaries to the workers. In order to minimize on the financial risk, the manager of the business should draw up a cost and time schedule. The schedule outlines the activities to be carried out and their associated costs. The business should not rely on borrowing a lot of money to start the business. The risk may be classified as medium .
The risk of safety or emergency of this project arises in a situation where the business sells foods and beverages which may be harmful to the health of consumers. The business may produce foods and beverages which contain harmful substances that may harm the consumers. The risk may be caused by purchase of poor raw materials which have not been tested and approved to be fit for human consumption. The risk can be minimized by setting up a team of members who are going to test and approve all the foods and beverages produced. Testing should be done before releasing the food to the market. Suppliers of raw material should be encouraged to supply high quality raw materials. Risk of safety or emergency may be rated as low.
Market risk is where the business incurs losses due to fluctuations in the market price of the product. The high population in Melbourne may increase the demand for food and beverages. The presence of competitors in the food and beverage industry may also lead to fluctuations in prices. Since the business is starting up, market risk may be rated as very high, 3. The business should analyze the market and its competitors before setting the price for its food and beverages.
Technological risk arises where the business fails to incorporate changes in technology in the production of food and beverage. Technology is very dynamic. There is, therefore, need to ensure the business takes into consideration technological changes in the production process. The economy of Melbourne is characterized by high technological changes. Failure to incorporate changes in technology may have a negative impact on the business. The business manager should ensure that technological changes are incorporated in the production process. For instance, the manager may purchase equipment to help with the packaging of the food and beverage .
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