1. R ICK R EISCHERT : A M AN WITH A H OT D OG P LAN Stephanie De Roo Keenon Fox Leigh Rankin Kimberly Tolbert

2. Rick’s business objectives …  Profit ! Rick’s main objective is to make money. To accomplish this objective Rick should focus on these key services …  Providing quality customer service  Safeguarding business resources (inventory, cash, etc.)  Complying with health codes & workers compensation requirements  Maintaining accurate financial records for taxation and recognizing trends

3. Risks Rick could face … Strategic Risks: 1.Running out of inventory due to limited storage space 2.Employee stealing cash due to handling procedures 3.Employee stealing entire cart due to transportation procedure 4.Customers stealing cash (due to poor handling procedures) 5.Poor customer service (how are they training employees?) Compliance Risks: 6.Food spoilage due to storage procedures 7.License expiration (how are they tracking expiration dates?) 8.Sales tax payment & reporting (how are they tracking sales?) 9.Workers comp claim due to injury from pushing cart or burning themselves in the hot water 10.Fines or license restrictions due to improperly disposing of waste water

4. Reporting Risks: 11.Untimely filing of Sales Tax (resulting in fines) or renewal of workers comp insurance (resulting in cancellation of policy) 12.Incorrect sales reported on tax returns because they are not keeping accurate financial records 13.Inaccurate withholding taxes for employees (how are they tracking payroll when Rick isn’t present?) 14.Untimely reporting of worker injury (if injury occurred when Rick wasn’t present) Operations Risks: 15.“Secret Pocket” cash handling facilitates theft! 16.Tips & sales cash kept in same place could cause incorrect calculation of sales for that day 17.If Rick’s truck breaks down, he would be out of business since there is no other transportation/storage option 18.Since all inventory is stored in Rick’s truck, it could be easily stolen, or spoil in the heat 19.Untrained employees could cause liability if they injure customers or could cause bad reputation if they treat customers badly 20.A busy day could cause Rick to run out of inventory since his storage is limited to his truck

6. Risks identified as critical … #2 Employees stealing cash – rated high due to the lax money handling procedure & no training program in place #12 Incorrect sales reported on tax returns due to lack record keeping procedure – rated high #15 Cash lost or stolen due to the “secret pocket” – rated high due to the lax money handling procedure & lack of training program #16 Incorrect sales reported due to tips & sales cash kept in the same location – rated high due to the lax money handling procedure #1 Running out of inventory due to storage space – rated relatively high due to inventory stored in coolers in the truck

7. RISK / CONTROL MATRIX

8. Recommended feasible controls… Use a cash register for sales! – Rick would be in much better shape if he will start using a cash register. 4 of the 5 critical risks are due to the poor cash handling procedure.  This will keep track of sales, inventory, and sales tax.  It will make the employees more accountable.  It will keep the sales & tip money separate.  It could also be used to start accepting credit and debit cards.

9. Recommended feasible controls… The 5th critical risk has to do with managing inventory. The use of the cash register will help monitor inventory. Rick should also implement a policy to do a daily physical count of what he has on hand. Another control that Rick could easily implement that would help with both cash handling & inventory control is EMPLOYEE TRAINING.

10. Conclusion … With the implementation of these three controls, Rick will enjoy continued growth in his business and can feel confident that things are running smoothly. We are recommending these 3 controls to address the 5 most critical risks that Rick is facing … 1.Implement the use of a cash register, and run daily sales reports from it. 2.Implement a procedure to perform a daily physical count of inventory on hand. 3.Begin an employee training program.