Chapter 1: Understanding Your Food Service Business's Risks
Part 1: What Is Business Risk?
As a food service business owner, you face many unique risks that other small-business owners never have to worry about. But what, exactly, is risk? Here's one way to think about it: every business decision you make can result in one of two ways:
- A positive outcome.
- A negative outcome.
The potential for a decision or action to have a negative effect on your business is what we call "risk." Yes, some actions are riskier than others. But much of what you do can be influenced by external factors – ones that are beyond your control. That's why you must consider and plan for your business's risks.

The process of examining your business to make it stronger is called "risk management." Though no one likes to dwell on a worst-case scenario, doing so can reduce the negative impact that events such as lawsuits or property damage could have on your business. Once you understand the risks you may encounter, you can purchase insurance policies and create procedures to handle these events when they arise.
Let's take a look at some of the most common types of risks for food services businesses.
Next: Part 2: How to Identify Your Food Business's Risks
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