Cafe & restaurant risk management: Reputation, cyber-crime and finance
The COVID-19 crisis has upended so much that was certain in business – many things that were predictable are now uncertain and risky. This section of our Cafe & Restaurant Risk Management Survey covers Reputation Risk, Cyber-Crime & IT Issues, plus Financial Risk.
Reputation Risk and Community Profile
* Fines and negative publicity related to hygiene and food safety problems
* Criticism on social media and review sites, related to poor quality food or service
* Poor behaviour of staff, management or business owner leads to negative publicity
* Negative publicity for the area – crime, vacant shops, resident issues
A sound monitoring system is vital to keep track of your reputation. This could include Google Alerts (watching for the names of the business and key people), comment notifications for Facebook, Instagram and other social media channels. Plus alerts on review sites such as Trip Advisor, Yelp and Google My Business – standard replies should be set up to maintain consistency. Early intervention and investigation, followed by a genuine apology or correction, can usually neutralise the effect of negative comments.
A clear Staff Code of Conduct backed up by regularly discussion and training can go a long way to reduce the risk of poor or scandalous staff behaviour.
IT Issues and Cyber-Crime
* Hijacking critical IT systems, leading to ransom demands
* Infection of computer systems from viruses or malware
* Online scams that lead to fraud and access to private information, customer credit card details and staff records
* Attacks on third party systems like POS, security and cloud-based systems
* Unauthorised staff have access to sensitive information and passwords
* Inadequate equipment or internet access leads to interruptions in essential IT services eg POS, supply ordering, customer ordering, rostering, payment systems and bookkeeping
* IT support staff not available out of hours when trade is usually busiest
Cafe and restaurant management systems are increasingly cloud-based, and access points may not be immediately apparent – most new equipment now comes with a WiFi connection for monitoring. Develop cyber-safety policies and procedures for your business, with guidance on what to do if a threat or attack occurs. Regular training will be essential.
Have automatic backup systems in place, saving all data to local and cloud-based locations.
Keep your computers, website and Point-of-Sale (POS) systems up-to-date with all software release updates and patches. The Australian Govt's Scamwatch website has useful information on the latest threats.
Financial Risk - it flows from many of the situations above
* Loss of income to handle immediate expenses – suppliers, wages and rent
* Lack of working capital to cover longer-term interruptions
* Unexpected expenses – including tax payments, fines and fees
* Assets that can't be liquidated if there's a change of plans or need to close or relocate
* The financial structure of the business does not protect business owners or shareholders
* Credit rating affected by your financial situation, leading to loss of borrowing power
* Sale value of your business impacted by loss of sales and high rent
It's great to have savings to cover financial shortfalls, but that's often not available. The alternative will be lines of credit with your bank. SilverChef's Rent Try Buy funding is designed to keep capital in your bank account rather than tying it up in equipment – if need be, it can be returned at the end of the 12-month rental period, and there's no more to pay.
Cloud-based bookkeeping systems have led to a steady improvement in the quality of financial information available to business owners. Accurate information is available at any time, not once a year. Setting up a simple Financial Dashboard can flag any discrepancies or signs of fraud – food & labour costs suddenly higher, unusual bank statement debits, or an unexplained decline in sales. Talk to your accountant or bookkeeper about setting up simple reports that you can review on a daily or weekly basis – what gets noticed gets managed.