Nepean Restaurant: A New Venture for Organic Food Lovers in Sydney

Nepean Restaurant is a new environment-friendly restaurant in Sydney offering organic food items. The article includes a possible menu, marketing strategy, financial plan, and critical risk factors.

Running head: ENTREPRENEURSHIP
Entrepreneurship
Student’s name:
Name of the university:
Author’s note:

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Executive Summary
Organic food serving restaurant in Australia has skyrocketed in recent time as the foodie
customers have started believing in healthy food and quality food. Nepean Restaurant is going to
be an environment-friendly restaurant and it will offer organic food items to the customers.
Nepean Restaurant is going to establish in Sydney and it will have two sections, a rooftop and
seating arrangement at inside also. Organic food-based business will have the higher start-up
cost. The entrepreneurs of the new venture will target primarily the customers who like to have
the organic food and who live near to Sydney urban areas. In addition, a possible menu has been
provided along with marketing strategy. Nepean Restaurant will take the strategy of price
skimming and this venture will take the product line stretching strategy. Moreover, the
entrepreneurs can take the print promotion and online promotion to reach to the target customers.
The entrepreneurs' financial plan for 1 year has been provided. Finally, some of the critical risk
factors of the business have been provided.

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Table of Contents
1. Background to the idea................................................................................................................3
2. Mission........................................................................................................................................4
3. Product and service offering........................................................................................................4
4. Market analysis............................................................................................................................7
4a. Industry analysis....................................................................................................................7
4b. Competition...........................................................................................................................8
5. Primary target market..................................................................................................................9
6. Marketing...................................................................................................................................10
6a. Product.................................................................................................................................10
6b. Pricing..................................................................................................................................10
6c. Distribution..........................................................................................................................11
6d. Promotion............................................................................................................................12
7. Financial plan.........................................................................................................................12
8. Critical risks...............................................................................................................................18
Reference List and bibliography....................................................................................................19
Appendices....................................................................................................................................21

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1. Background to the idea
In many areas of consumer products lag, however, organic foods continue to grow in the
market. Therefore, serving organic food at the restaurant would be a great idea to enhance the
restaurant profit. The customers want organic food items and organic food is becoming the next
best thing in the restaurant industry which would help the customers to stay a healthy life. As
stated by Lee, Hallak and Sardeshmukh (2018, p.218), 65% of the customers pay more up to
10% to dine at the green and environment-friendly restaurants which serve organic food items.
Nepean Restaurant is going to be an environment-friendly restaurant and it will be located in
Sydney. Nepean Restaurant will offer organic food items to the customers and the choices of the
food items will be local food items. Nepean Restaurant is going to fill up the gap in the market
by providing oh-so-healthy food items for the food lovers in Sydney. Nepean Restaurant will cut
back the food packaging and it will serve the takeaways with jute bag so that it would produce
minimal waste in the environment. Nepean Restaurant is going to serve the vegetarian options
more and the entrepreneurship practice will try to consider on-site food production in front of the
customers so that it may bring the transparency. The entrepreneurship practice is planning to get
the sustainable food labels. Nepean Restaurant will be located in Sydney, Kent Street. Nepean
Restaurant will be on the fifth floor of a building and which would be taken as rent. Nepean
Restaurant will be serving two types of seating areas as the guests can sit on a rooftop or they
can sit inside the restaurant. Most of the decoration of the restaurant will highlight the green and
on the rooftop, there will be plants also. The carpet on the restaurant will be much like soft grass
and the power of the restaurant will use the renewable energy. Nepean Restaurant will practice
efficiency and conservation of water. The entrepreneurs of the restaurant will consider setting up
the reuse system and water catchment as a rain barrel.

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Most importantly, the restaurant will try to produce minimum waste along with it will
have modernized kitchen from where smoke and waste would be produced at a minimal level.
Nepean Restaurant will compost the leftover food and Nepean Restaurant will renovate, recycle
and redecorate the old items. Moreover, the restaurant will have seating arrangements for 45
guests at a time in the beginning. The entrepreneurs are planning to employ 12 staffs and 3 chefs
at starting of the restaurant. The entrepreneurs will hire internationally famous chefs who can
cook organic food and the restaurant will keep energy-star appliances.
2. Mission
The mission statement of Nepean Restaurant is to ‘provide the customers with the best
organic food items to relish and to save the environment from the waste and pollution by doing
the eco-friendly business practice'. In addition, the entrepreneurs of the business set the target of
achieving 4% of the market share in Sydney based restaurant industry by the end of 2 years of
the business. Customer satisfaction is very important for the entrepreneurs along with the quality
of the food items.
3. Product and service offering
Nepean Restaurant will offer the organic food items mainly. In Sydney, local customers
will visit the restaurant and foreigners will also visit the restaurants as there are many travellers
and expatriates come to Sydney. Nepean Restaurant will offer both vegan and non-vegetarian
food items. However, the restaurant will not serve sea-food. The entrepreneurs will also serve
alcoholic beverage in near future.
Restaurant service time:

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10 am – 10 pm (weekdays)
9 am 11.30 pm (Saturday and Sunday)
The restaurant will serve starters and the main courses for the customers. The food items
will be organic and it will reflect the local customers’ choice also.
Starters
 Tomato Shorba
 Spinach Soup with roasted garlic
 Herbed Chicken soup
 Pumpkin chicken soup
 Zucchini chicken soup
 Broccoli chicken soup
Now the Greens
 Moroccan Chickpea Salad
 Tandoori Paneer Ceasar Salad
 Fattoush Salad
 Greek Salad and Cheese
 Pasta Beg salad
 Watermelon Feta Salad
The Munchies
 Bruschetta
 Garlic bread

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 Bruschetta con Bell peppers
 Crudites with dip
 Kasuri Methi Paneer
 Pepper chicken dry
 Squid Rings
Nepean Specials
 Chicken Sizzler
 Vegetarian Sizzler
 Zuppa D’oasta
 Yakitori chicken noodles
 Wild garlic chicken
 Griddled chicken
 Winter lamb
 Purple sprouting broccoli with egg
Apart from the food offering, the service will be designed in the best possible way so
that the restaurant will have the repeat value. The restaurant will also provide free Wi-Fi service
and in takeaways, the restaurant will provide recycled content packaging. The decoration of the
restaurant will be eye-catching and soothing.

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4. Market analysis
4a. Industry analysis
In Sydney, the rise of foodie culture among the Australians and demand for the quality of
food and organic food items fuel up the restaurant industry. Therefore, the healthy habits of the
customers and the changing social trends have been driving the revenue growth for the restaurant
industry in the last five years. In addition, Axelsson, Malmberg and Zhang (2017, p.170)
commented that diminishing leisure time and the busier lifestyle of the people leads to the
consumers to visit the restaurants for the dining out or lunch. Organic food items allow the
common people to live healthily and the restaurants also allow the customers to combine leisure
with dining which also avoids spending time on food preparation at home. The people of
Australia have decent disposable income which leads to spending more on eating out. Industry
revenue is expected to grow at annualised 3.5% in Australia over the next five years to almost
AU$ 28 billion (Ibisworld.com.au, 2018). However, some market surveys are stating that
restaurant industry revenue is expected to fall by 0.6% in the current financial year due to
customer spending on the other industry services and negative consumer sentiment. The
restaurant industry in Australia provides employment to almost 288,860 employees and in
Australia; there are more than registered 24,900 restaurant businesses. The restaurant industry in
Australia contributes almost AU$ 22 billion to the national economy and AU$ 4.4 billion
directly to the tourism industry (Ibisworld.com.au, 2018).
Most importantly, among all the restaurant businesses in Australia, 93% comprises the
small businesses. Recent trends in Australian restaurant are eating healthier food, consumers’
taste is changing, staffing issues would not go away and financial pressures are increasing for the
restaurant. In Australian restaurant, the virtual world meets the physical experience and the

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marketing is becoming the more important for the organisation. In a recent time in Australia,
48% of the table booking is done through the internet via mobile and 23% is done through the
internet via personal computers.
4b. Competition
Competitive rivalry in Sydney restaurant industry is very strong as there are many mid-
scale and upscale restaurants. Factors of competitive rivalry are associated with the high numbers
of restaurants, high numbers of aggressive firms and lower switching costs of the customers. The
restaurant industry in Sydney has many restaurants of various sizes. Bargaining power of the
customers is also high as the customers have the lower switching cost and the large numbers of
providers are present in the industry. Sydney is a famous city and it is quite normal that there is
the high availability of the substitutes are present (Wu et al. 2017, p.665). The threat of
substitutes in the industry is high and famous organic restaurants in Australia are Ora, Bodhi
Restaurant and Thai Kanteen. These all restaurants provide organic cuisine and these restaurants
have been in the industry for a long time. Nepean Restaurant will face the competition from
these restaurants and the high-performance-to-cost ratio if substitute in the market is very strong.
In addition, the threat of a new entrant in the restaurant industry has the moderate force. The
opening new restaurant does not need high capital and moderate cost of brand development
creates the competition in the market.
Restaurants The average cost
for two
Strengths USP
COOH
Alexandria
AU$70 The ambience,
neighbourhood gem,
Extraordinary food
items

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good for parties
The Clean Treats Cafe AU$60 One of the best cafe,
good ambience and
quality of food
Best quality of food
OBB Hornsby AU$60 Modern place, clean
and ambience
Best ambience in the
area and sudden
discount
Table 1: Competitive analysis of new venture
(Source: Self-developed)
5. Primary target market
The primary target market of Nepean Restaurant will be the customers who like to eat
healthy organic food. The primary target market of Nepean Restaurant will be the customers who
like to eat organic food with quality. A most important aspect of targeting the customers is that
they will live nearby of the Sydney area. The customers who like to eat healthy organic food,
naturally, the customers might belong to the higher income group. Nepean Restaurant will be a
mid-scale restaurant which will have a rooftop facility and it will also have perfect ambience
with air-conditioned seating arena. Therefore, the entrepreneurs of the new venture will target
the behavioural segmentation of the market where the customers mainly focus on the benefit
sought, user status, user rates and readiness to buy. Nepean Restaurant will target the customers
who are ready to purchase organic food items and visit the environment-friendly restaurant. In
addition, the geographic target market will be included into this as the target customers of the

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restaurant will be living near Sydney in the urban areas. Most of the customers of the restaurant
will be from a niche market.
The secondary target market of Nepean Restaurant will be based on the demographic
segment where the main target customers will be the consumers aged between 18 and 30. This
aged group customers go to college and universities and this aged group customers can be
corporate workers who like to visit the restaurant with friends and colleagues.
6. Marketing
6a. Product
Nepean Restaurant will offer mostly vegetarian, non-vegetarian starters, munchies, salads
and the main course food items. Organic food with environment-friendly nature is the USP of
Nepean Restaurant. There are other restaurants in Sydney also which provide the same kinds of
organic food items. However, Nepean Restaurant will take product line stretching strategy to
reach wider customers in Sydney. Most importantly, Nepean Restaurant will tie-up with a third-
party mobile delivery app where the restaurant will get additional customers. Product line
stretching is the expanding of the product line by the firm where the new products are launched
in the same product line; however with new product range (Alonso and Mariani, 2017, p.352).
Hence, Nepean Restaurant will come up with more variety in the menu than the existing
restaurants already have. Therefore, the new restaurant will have a new food item range with
different features.
6b. Pricing
Organic food items are mainly expensive in nature than the processed food items. in
addition, opening up and operating of the environment-friendly restaurants cost more than the

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normal one. Therefore, entrepreneurs of this new business venture are prepared for growth and
higher start-up costs. In order to achieve profitability faster, the entrepreneurs of the business
will take the price skimming strategy. As stated by Toptal and Cetinkaya (2015, p.552), price
skimming strategy is relatively high initial price strategy of the marketers for the product at first,
after that, the marketers lower the price over time. Therefore, price skimming is the temporal
version of the price discrimination or the yield management. Nepean Restaurant will set the price
of the food items a bit higher at the initial stage as there are limited numbers of organic food
providers’ restaurants. The new venture is expected to have the higher business at the initial
stage with good numbers of customers.
6c. Distribution
Nepean Restaurant will be opening at Kent Street in Sydney. The entrepreneurs of the
new venture are thinking of contracting with local suppliers for the raw materials to prepare the
food. The suppliers are needed for the vegetables, meat, fish, fruits, disposable packets and the
milk. Inventory of the restaurant needs to be managed in a right way so that the business does not
create much waste.
 Therefore, the suppliers of the restaurant will deliver the products thrice in a week and
the inventory management of the restaurant will be managed by the staffs.
 The entrepreneurs of the new venture will use energy-efficient vehicles so that the
suppliers’ vehicles may not harm the environment.
 Nepean Restaurant will deliver the food items through a mobile app (Zomato, Dimmi,
Qantas), through the website and through phone calls. The restaurant is going to employ
new staffs so that they can manage takeaways perfectly.

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6d. Promotion
The entrepreneurs of the new venture will promote their restaurant using the internet.
Social media marketing and internet marketing is inexpensive for the new venture. Nepean
Restaurant can use Facebook, Twitter and Instagram. In addition, the marketers of Nepean
Restaurant will use content strategy to promote their business through the internet. The marketers
can use SEO and PPC strategy to promote their business online. Nepean Restaurant will create
their website so that they can reach wider audiences. The marketers can reach out to the local
food bloggers and influencers so that their business can be highlighted.
Nepean Restaurant will advertise through distributing pamphlets and flyers in Sydney.
The marketers can do flyer distribution in front of the colleges, universities and offices. In
addition, giving advertisement in newspapers and on magazines in Sydney can promote the
business.
Nepean Restaurant can also take the strategy of discount pricing for the early birds or for
the repeat purchasers.
7. Financial plan
Profit and loss
Year 1
Gross revenue $3,813,000
Cost of goods sold $187,500
Gross margin $3,625,500

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Other revenue [source] $0
Interest income $0
Total revenue $3,625,500
Operating expenses
Sales and marketing $6,000
Payroll and payroll taxes $50,000
Depreciation $26,000
Maintenance, repair, and overhaul $0
Total operating expenses $82,000
Operating income $3,543,500
Interest expense on long-term debt $0
Operating income before other items $3,543,500
Loss (gain) on the sale of assets $0
Other unusual expenses (income) $0
Earnings before taxes $3,543,500

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Taxes on income 30% $1,063,050
Net income (loss) $2,480,450
Balance Sheet
Initial balance
Year 1
(2020)
Cash and short-term investments $0 ($1,117,050)
Accounts receivable 0 0
Total inventory 0 0
Prepaid expenses 0 0
Deferred income tax 0 0
Other current assets 0 0
Total current assets $0 ($1,117,050)
Buildings $46,500 $46,500
Land 0 0
Capital improvements
$
10,000 10,000
Machinery and equipment
$
73,500 73,500
Less: Accumulated depreciation expense 0 26,000
Net property/equipment $130,000 $104,000

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Goodwill $0 $0
Deferred income tax 0 0
Long-term investments 0 0
Deposits 0 0
Other long-term assets 0 0
Total assets $130,000 ($1,013,050)
Initial balance
Year 1
(2020)
Accounts payable $65,000 $65,000
Accrued expenses 0 0
Notes payable/short-term debt 0 0
Capital leases 0 0
Other current liabilities 0 0
Total current liabilities $65,000 $65,000
Long-term debt from loan payment
calculator
10
0,000 $0
Other long-term debt $0 $0
Total debt $165,000 $65,000

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Other liabilities 0 0
Total liabilities $165,000 $65,000
Initial balance
Year 1
(2020)
Owner's equity (common) $50,000 $50,000
Paid-in capital 0 0
Preferred equity 0 0
Retained earnings 0 0
Total equity $50,000 $50,000
Total liabilities and equity $215,000 $115,000
Year 1
(2020)
Operating activities
Net income $0
Depreciation $26,000
Accounts receivable $0
Inventories $0
Accounts payable $0
Amortization 10,000

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Other liabilities 5,000
Other operating cash flow
items 0
Total operating activities $41,000
Investing activities
Capital expenditures $0
Acquisition of business 0
Sale of fixed assets
($1,063,050
)
Other investing cash flow
items 0
Total investing activities
($1,063,050
)
Financing activities
Long-term debt/financing ($100,000)
Preferred stock 0
Total cash dividends paid 5,000
Common stock 0
Other financing cash flow
items 0

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Total financing activities ($95,000)
Cumulative cash flow
($1,117,050
)
Beginning cash balance $0
Ending cash balance
($1,117,050
)
8. Critical risks
Product risk: Product risk is associated with the concept that the new product concept
can be copied by another firm. Nepean Restaurant will provide organic food item in Sydney and
other restaurants can copy the new food item.
Market risk: Organic food has demand in the market; however, in the coming future, the
market can develop differently than expected. This organic food market can take a long time to
develop and the cash run out is also possible while developing the market.
Financial risk: This particular venture will start with a bank loan and savings of the
entrepreneurs. Therefore, if the business does not make a profit in short-turn; the entrepreneurs
will be in trouble.
People risk: The restaurant business mainly depends on the staffs and behaviour of the
staffs. If the business fails to find out the proper staffs; the business venture will be in trouble.

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Reference List and bibliography
Alonso, A.D. and Mariani, S., 2017. Complexity, change and the restaurant business: a case
study from Montevideo, Uruguay. International Journal of Leisure and Tourism
Marketing, 5(4), pp.351-369.
Aslihan Nasir, V. and Karakaya, F., 2014. Consumer segments in the organic foods market.
Journal of Consumer Marketing, 31(4), pp.263-277.
Axelsson, L., Malmberg, B. and Zhang, Q., 2017. On waiting, work-time and imagined futures:
Theorising temporal precariousness among Chinese chefs in Sweden’s restaurant
industry. Geoforum, 78, pp.169-178.
Dall’Olmo Riley, F., Pina, J.M. and Bravo, R., 2015. The role of perceived value in vertical
brand extensions of luxury and premium brands. Journal of Marketing Management, 31(7-8),
pp.881-913.
Guthman, J., 2014. Agrarian Dreams: The paradox of organic farming in California (Vol. 11).
Univ of California Press.
Industry Trends Restaurant. 2018. Available at:
https://www.ibisworld.com.au/industry-trends/market-research-reports/accommodation-food-
services/restaurants.html [Accessed 14th Sept 2018]
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago Press.

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Lee, C., Hallak, R. and Sardeshmukh, S.R., 2018. Innovation, entrepreneurship, and restaurant
performance: A higher-order structural model of Australia. Tourism Management, 53, pp.215-
228.
Zhou, Y., Singal, M. and Koh, Y., 2016. CSR and financial performance: The role of CSR
awareness in the restaurant industry. International Journal of Hospitality Management, 57,
pp.30-39.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management.
Sydney: Pearson.
Toptal, A. and Çetinkaya, S., 2015. The impact of price skimming on supply and exit
decisions. Applied Stochastic Models in Business and Industry, 31(4), pp.551-574.
Wu, K.J., Liao, C.J., Tseng, M.L., Lim, M.K., Hu, J. and Tan, K., 2017. Toward sustainability:
using big data to explore the decisive attributes of supply chain risks and uncertainties. Journal
of Cleaner Production, 142, pp.663-676.

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Appendices
Appendix 1
Sources and expenses of new business venture
Sources of Capital
Owners' Investment (name & %
ownership)
Entrepreneurs & % ownership
$
100,000
Other Investor -
Other Investor -
Other Investor -
Total Investment
$
100,000
Bank Loans
Bank 1 (ANZ Bank)
$
50,000
Bank 2 (Westpac)

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-$
50,000
Bank 3 -
Bank 4 -
Total Bank Loans
$
100,000
Other Loans
Source 1
$
-
Source 2 -
Total Other Loans
$
-
Startup Expenses
Buildings / Real Estate
Purchase of apartment $

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15,800
Construction of area 15,700
Remodeling 15,000
Other -
Total Buildings and R / E
$
46,500
Leasehold Improvements
Item 1
$
2,500
Item 2
$
2,500
Item 3
$
2,500
Item 4
$
2,500
Total L / H Improvements
$
10,000
Capital Equipment List

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Furniture
$
28,500
Equipment
$
15,000
Fixtures
$
-
Machinery
$
25,000
Other
$
5,000
Total Capital Equipment
$
73,500
Location and Admin Expenses
Rental
$
-
Utility Deposits 2,500
Legal and Accounting Fees 5,000
Prepaid Insurance 5,000
Pre-opening Salaries

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1,500
Other 500
Total Location and Admin Expenses
$
14,500
Opening Inventory
Category 1
$
1,500
Category 2
$
6,500
Category 3
$
2,560
Category 4
$
1,500
Category 5
$
1,500
Total Inventory
$
13,560
Advertising and Promotional
Expenses
Advertising $

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1,500
Signage
$
1,500
Printing
$
1,500
Travel & Entertainment
$
1,500
Other / Additional categories -
Total Adv and Promo expenses
$
6,000
Payroll and payroll taxes
Expense 1
$
25,000
Expense 2 25,000
Total Payroll and payroll taxes
$
50,000
Summary Statement
Sources of Capital

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Owners' and Other Investments
$
100,000
Bank Loans 100,000
Other Loans -
Total Source of Funds
$
200,000
Startup Expenses
Bldgs / Real Estate
$
46,500
Leasehold Improvements 10,000
Capital Equipment 73,500
Location / Admin Expenses 14,500
Opening Inventory -
Advertising / Promo Expenses 6,000
Other Expenses

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50,000
Total Startup Expenses
$
600,500

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Appendix 2
2. Image of Logo
(Source: Self-developed)

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Appendix 3
1. Promotion advertisement (Social media content poster)
Indulge
Organic Food
All You Can Eat* AU$ 20
Taste Fresh Organic Food
Come and Take a Look to Our Weekly Special Menu
Rooftop Seating available
Nepean Restaurant
5th Floor, George Building, North Block, Kent Street
Follow us on Facebook, Twitter and Instagram

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Appendix 4
3. Images of the proposed restaurant
Inside seating arrangement
Rooftop seating arrangement