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.
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.
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.
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:
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.
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.
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 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.
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, good for parties |
Extraordinary food items |
|
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)
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 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.
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.
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 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.
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.
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.
|
Year 1 |
|||
|
Gross revenue |
$3,813,000 |
||
|
Cost of goods sold |
$187,500 |
||
|
Gross margin |
$3,625,500 |
||
|
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 |
||
|
Taxes on income |
30% |
$1,063,050 |
|
|
Net income (loss) |
$2,480,450 |
|
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 |
|
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 |
100,000 |
$0 |
|
Other long-term debt |
$0 |
$0 |
|
Total debt |
$165,000 |
$65,000 |
|
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 |
|
|
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 |
|
|
Total financing activities |
($95,000) |
|
|
Cumulative cash flow |
($1,117,050) |
|
|
Beginning cash balance |
$0 |
|
|
Ending cash balance |
($1,117,050) |
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.
Reference List
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.
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.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download