Business Idea Evaluation Report: “Blinnitsa” Crepe Café

BUSINESS IDEA EVALUATION REPORT

Idea Title: “Blinnitsa” Crepe Café

Submitted By: John Doe
Date of Submission: xx xx xxxx
Date of Report: xx xx xxxx

1
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Table of Contents
Executive Summary ............................................................................................................... 3
Business Idea Analysis .......................................................................................................... 4
Business Idea summary...................................................................................................... 4
Type of Business ................................................................................................................ 4
Product or service benefits and drawbacks ........................................................................ 4
Stage of development ......................................................................................................... 4
Proprietary rights or Intellectual Property ......................................................................... 4
Market .................................................................................................................................... 5
Industry Overview.............................................................................................................. 5
How big is the market ........................................................................................................ 6
Define potential customers................................................................................................. 7
How to reach your market .................................................................................................. 9
Sales and Distribution ........................................................................................................ 9
Promotion Strategy ............................................................................................................ 9
Competition.......................................................................................................................... 10
Potential competitors........................................................................................................ 10
Competitors’ strengths and weaknesses........................................................................... 10
Your competitive advantage ............................................................................................ 11
Financials ............................................................................................................................. 12
Estimated costs................................................................................................................. 12
Funding requirements ...................................................................................................... 14
Pricing .............................................................................................................................. 14
Sales Forecast ................................................................................................................... 15
Regulations........................................................................................................................... 17
Barriers to entry ................................................................................................................... 18
Team..................................................................................................................................... 18
Business Risks ..................................................................................................................... 18
Results of Idea Evaluation ................................................................................................... 19
Recommendations ................................................................................................................ 19
Industry Links ...................................................................................................................... 20
References ............................................................................................................................ 20
APPENDIX A ...................................................................................................................... 22
Idea Evaluator Submission................................................................................................... 29

2
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Executive Summary

The main advantage of this business idea is the ability to provide unique Eastern European style
crepes. Crepes have potential to generate a high profit margin. They are easy to cook, and are
excellent for either dining in or take away.

However, two main drawbacks have been identified with this business idea:
 Lack of sufficient capital to meet startup costs. The owners indicated that they expect to start
their business with about $35,000. This amount is well below the very minimum estimated
costs of $72,000
 The team does not have experience in operating a café or a restaurant in Australia. Lack of
knowledge of café / restaurant operations was identified as one of the key reasons for
restaurant failure

3
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Business Idea Analysis

Business Idea summary
Open an Eastern European style crêperie offering a wide variety of sweet and savoury crêpes.
Crepes are easy to cook, they are great eatin or take away option for breakfast and lunch, but there
are limited number of places in Sydney which offer a range of delicious crepes for all tastes. This
created an opportunity of opening a creperie in the Sydney region.
The owners of the proposed business came to Australia from Eastern Europe several years ago.
Creperes are very popular in Eastern Europe while more creperies are opened there every year.
Opportunity exists for having more creperes in Australia's metrolpolitan and regional cities.

The owners will use Eastern European recipes for making crepes. Crepes has a long lasting tradition
in both Russia and Ukraine and this allowed developing unique and delicious crepe recipes for
almost every occasion. Crepes has been known to Slavs for hundreds of years. Crepes were
prepared in Eastern Europe for the most prominent events including weddings. Maslenitsa, a "crepe
week" is celebrated by millions of people in Russia, Ukraine and Belorrusia and symbolises an
imminent end of the winter

Type of Business

The founders planning to start a new business in a traditional business sector

Product or service benefits and drawbacks

The business idea proposes a distinctive concept of offering Eastern European crepes. Based on the
initial research conducted as part of this evaluation, no Eastern European creperies were identified
in the Sydney region.

Stage of development
The project is currently in the idea stage. The owners have not been operating a creperie previously
and have not yet invested any funding into the proposed business.

Proprietary rights or Intellectual Property

The idea does not require any proprietary rights or Intellectual Property. If the business successfully
grows the owners may consider filing a trademark to protect the name and logo of the creperie. IP
protection for the trademark will be essential if the owners will decide to expand the business
through franchising. Specific information on Trademarks is available at the IP Australia website[1].

4
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Market
Industry Overview
Australia's cafes, restaurants and caterers generated $13.7 billion in income during 2006-07,
according to figures released by the Australian Bureau of Statistics (ABS).

The main sources of income for the 15,423 cafes, restaurants and caterers were:

 Takings from meals consumed on the premises (47%)

 Takings from catering services (24.1%)
 Sale of liquor and other beverages (19.9%)

Cafes and restaurants:

 Generated $9.7 billion in income.

 Employed 145,546 people (47.4% as casuals). Waiting staff was the largest occupation
(41.7%).
 Over two-thirds (67.5%) employed fewer than 10 people. These smaller businesses
accounted for 27.7% of total cafe and restaurant income.
 Larger cafe and restaurant businesses (those which employed more than 50 people)
accounted for 1.5% of all cafe and restaurant businesses and generated over one-fifth of total
income (21.8% or $2,115.5m).
 Over half (56.8%) were licensed to sell alcohol.
 1.1 million seats were available for dining.

Catering services:

 Generated nearly $3.9 billion in income.

 Employed 50,268 people (58.5% as casuals). Waiting staff was the largest occupation
(27.2%). Kitchen hands accounted for 23.3% and chefs and cooks 18.6%.
 Over half (57.8%) employed fewer than 10 people. These smaller businesses accounted for
9.1% of total catering income.
 Larger catering businesses (those which employed 50 people or more) accounted for over
three-quarters (78%) of total catering income.

The graph below shows that the main source of income for cafes and restaurants was takings from
meals consumed on the premises, accounting for almost two-thirds (65.2% or $6,329.8m) of total
income.

5
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

New South Wales accounted for 36.3% of all cafe, restaurant and catering businesses in Australia,
30.4% of employment and generated just under a third (32.2%) of total income.

Success in this industry is often determined by the level of customer service, price, the quality of their coffee
brand and how well they make a cup of coffee from the texture

How big is the market

New South Wales

Based on this data the 2006-2007 café and restaurant income in NSW is $9.7 billion x32.2%=$3,12
billion. We assumed that the café & restaurant total market grows roughly at the rate of inflation (on
average 3% per year in the period from 2007 to 2013[2]). We then estimated the café & restaurant
market in NSW in 2012-2013 to be around $3,73 billion.

However, estimating the total café and restaurant market for an individually owned café may not be
essential. Analysis of the overall café market will become more important if Blinnitsa owners will
decide to expand their business operations either through opening new cafes or through franchising

Marrickville

For the sake of completeness we estimated total spending in cafes and coffee shops in Marrickville,
the suburb where Blinnitsa owners plan opening their crepe café. According to the ABS 76500
people are living in Marrickville. For this purposes of this estimation we assumed that the Primary
Market Area (PMA) for the Blinnitsa Café encompasses an approximately 3 km radius around the
café establishment in the centre of Marrickville. We estimated that there are over 115,000 people
living in the PMA and approximate café and restaurant market in our PMA is $70 million.

Alternatively, we can estimate the total market based on the number of cafes and restaurants in
Marrickville. There are around 130 cafes and coffee shops in Marrickville (see Competition section
6
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

for details). Cafés and coffee shops revenue varies greatly depending on the size of an
establishment, types of food and location. Annual income for cafés in the Sydney region may vary
from $100,000 to above $1.5 million according to the data of cafés and restaurants for sale in
Sydney region[3].

Because there are a number of small size cafés in Marrickville we will assume that each café on
average makes $300k in revenue per annum. As a result, the total market for cafes and restaurants
in Marrickville will be about 130 x $300k =$39 million. This number is lower than $70m obtained
in previous estimation. But this is reasonable considering that the PMA covers both Marrickville
and suburbs adjacent to Marrickville including Enmore, Sydenham, Dulwich Hill and Petersham.

Good location is essential for success

Before Blinnitsa creperie will become known in the neighbourhood, it will likely need to rely on the
foot traffic. Thus, we will assume that the majority of Blinnitsa’s customers during the first year of
operation will come from an area much smaller than the PMA defined above. Blinnitsa creperie
plans to be located in the centre of Marrickville. Several establishments providing high foot traffic
including the Marrickville train station, Banana Joes supermarket Fitness First centre, ANZ,
Commonwealth and Westpack bank branches will be within walking distance from the Blinnitsa
creperie.

Define potential customers

We expect that Blinnitsa cafe customers would be families and individuals working or living in
Marrickville. Crepes are both healthy and convenient food option for both breakfast and lunch.
Crepes are well known in many European countries (e.g., French crepes) and would be most likely
popular among Australians and immigrants from Europe.

Before the Blinnitsa café is opened it is difficult to predict specific customer segments. But we
anticipate that families would visit the Blinnitsa café on public holidays and on Saturdays.
Nonworking or part-time employed parents with children would be visiting the creperie throughout
the week. Additionally, office workers and professionals would be buying coffee and crepes for
breakfast and lunch.
The café owners will need to learn about their café’s customers when it becomes open for business.
The figure below shows the customer demographics in Marrickville from the Australian Bureau of
Statistics.

7
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

8
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

How to reach your market

In the first several months after being opened, the café would use online, print and word of mouth
advertisement. It would introduce loyalty cards and referral promotions providing incentive for
customers to come back and to tell their friends & family about the new creperie. The Blinnitsa café
would also seek out opportunities for community involvement to build goodwill in the community.
Delicious crepes, constantly updated menu, best quality coffee and friendly staff would underpin
success of the creperie. The objective for the owners is to present the café to local community in
such a way that there would be significant number of loyal customers who visits the creperie on a
regular basis.

Sales and Distribution

The owners plan offering crepes from café’s premises in Marrickville. The café would promote
crepes take away to increase the number of customers served during the busy periods, and thus
grow café’s total income.
The owners could also perform analysis of whether crepes delivery to local customers could have a
sufficient value proposition.

Promotion Strategy
Blinnitsa café’s marketing strategy would include direct mail to Marrickville residents, yellow
pages listing, online marketing through Adwords search engine optimisation (SEO) and customer
referral promotions. The café would also constantly update its crepe menu and would offer lunch
and breakfast specials.

9
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Competition
Potential competitors
All cafes and coffee shops in Marrickville that offer quality coffee and food can be considered as
competitors. The company search at the True Local shows 124 cafés in Marrickville; the search at
Urban Spoon identified 108 cafes; Yellowpages has listing for 111 cafes and coffee shops. By
comparing listings at various online directories we can notice that none of the directories provides a
full list of cafes/coffee shops in the area. Thus, the total number of cafés will be larger than the
number identified in any of the directories; we assumed that there are 130 cafes and coffee shops in
Marrickville.

Competitors’ strengths and weaknesses

Although there are over 100 cafés and coffee shops in Marrickville only few of them receive
consistent and positive reviews from customers. The cafes which became popular destinations for
coffee and food for people in the Marrickville neighbourhood will be the main competitors for the
Blinnitsa creperie. For instance, Yelp contains excellent reviews for cafés such as Cornersmith,
Kelby’s Café and Bourke Street Bakery.
Ability of these cafes to offer consistently high quality coffee and food as well as friendly staff were
the primary reasons for the high customer rankings.

Additionally, some cafés and restaurants in Marrickville may have a competitive advantage over
Blinnitsa because they have a liquor license in contrast to Blinnitsa café that would not serve
alcohol (at least in the near term).

However, there are no cafes in Marrickville that offer crepes. Claire's Crepes at 457a King St,
Newtown is the closest crepe café. Doughbox is another creperie located at 137 Enmore Rd,
Enmore. But neither of these crepe cafes markets itself as being Eastern European style creperie.

Because individually owned cafés primarily target local customers who either live or work nearby,
it is unlikely that creperies in other suburbs will create any significant competition to Blinnitsa cafe.

10
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

But analysis of other creperies in the Sydney region can provide insights into crepe menus, pricing
and key features helping crepe cafes to differentiate themselves. Appendix A includes a list of crepe
cafes that were identified in the Sydney region. The image below shows locations for some of these
creperies on the map.

Your competitive advantage

Blinnitsa is the only café in Marrickville that would offer delicious crepes to eat in or takeaway.
Moreover, no other creperie in the Sydney region offers Eastern European style crepes. According
to the Blinnitsa owners Eastern European style crepes are distinctive (e.g., in terms of crepe fillings)
from other types of crepes such as French crepes.

11
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Financials
Estimated costs
Startup investments for a new café or restaurant would include the following costs

 Lease and security deposit

 Furniture, equipment and fit out costs
 Administration costs (e.g., council approval , legal, insurance and marketing)
 Inventory
 Contingency expenses
 Working Capital

We start by estimating each cost component to obtain total projected startup investment

Lease and security deposit

The most widely used method is to lease a facility from an unrelated third party. Rental of premises
is one of the major costs for a café in the Sydney region. We searched for various premises
available for rent in Marrickville and neighbouring suburbs at Commercial Real Estate database[4].
In our search we only included premises that have been previously used for a café or a restaurant.

Although cost of commercial lease varies depending on location and size of facility, overall the cost
of rent is very high in the Sydney region. It is recommended that the rent does not go over 15% of
café’s turnover[5]. Preferably, the rent should not be over 10% of the turnover.

Looking for affordable rent is essential also because the objective of the Blinnitsa owners is to
minimise startup costs. At the time when this report was written, there was no suitable premise
available for a café in Marrickville, so Blinnitsa owners would need to continuously check
availability to secure a rental space when it becomes available.

However, we identified several possible options in neighbouring suburbs. These rental costs can be
subsequently used as guidance.

Newtown (near
254 Paramatta Rd,
Location Petersham Foodworks and train
Stanmore
station)
Size 110 sq m 215 sq m 18 sq m
Deposit (from 3 to 6
months depending on $ 9,193 $ 17,202 $ 11,880
establishment)
Monthly Rent $ $ 3,064 $ 2,867 $ 2,970
Annual Rent $ $ 36,771 $ 34,404 $ 35,640

Based on the above table, for our financial estimates we will assume that the average monthly rent
to $3000. We will also assume that the owners would not proceed with the lease if the security
deposit exceeds a 3 month rent. Thus, the

Lease security deposit = $3,000 x 3 months = $9,000

Furniture, Equipment and fit out costs

12
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Furniture, Equipment and fit out costs were estimated to be about $30,000. We aimed to minimise
these costs as much as possible and relied on several assumptions. In our estimates of costs we
assumed that the leased area was previously used for a café and is in good condition, so that
additional fit out costs would be relatively small.

We assumed $15,000 cost for relatively small fit out works.

If there are more substantial fit out works required the cost may reach tens of thousands of dollars
depending on the square footage of the area. Various estimates were provided on the public forum
devoted to cafés and coffee shops; Take away shops fit out can range anywhere from $10,000 to
$100,000[6]. Another source stated that standard fit out costs will vary between $500 to $900 per
square metre not including equipment and furniture[7]. Additionally, It was reported that high
quality fitout for a 50sqm shop can cost up to $150k[6]. Additionally, if a café offers cooked food it
may be required to have a grease trap that alone could total $10,000. We found a report when over
$20,000 was requested for installation of the trap[8]. To estimate fit out cost more precisely one
needs to can provide detailed drawings of the café layout and identify exact scope of fit out works.
The fit out quotes can be received from several professional suppliers such as Hospitality Fitout
Specialists and Cafeideas.

Furniture and equipment required for the creperie was estimated at about $15,000. Substantial
savings on the café furniture and equipment can be achieved by purchasing second-hand equipment
from places such as Gumtree or Ebay. One can purchase high-quality café equipment from
previous owner at 20%-30% of their full cost.

We propose that critical equipment such as a coffee maker and crepe makers are purchased brand
new because any breakdown will cause major interruption in café’s operation and loss of revenue.
However, less critical equipment such a cold food display and a cold drinks refrigerator can be
purchased in good condition from a previous owner. Buying certain furniture such as chairs and
tables from IKEA is also a cost-effective option.

Administration costs

We estimated the insurance, legal and marketing cost required before the opening of the creperie to
be around ~$6500.

Inventory

We propose to minimise the amount of initial inventory and stock as it is unlikely that the café
would have any significant customer base in the first months of operation. We budgeted ~$1,500
for initial inventory that included food and consumable stock.

Working Capital

We estimated working capital required for the first three months of operation. It should be noted
that 3 months is the absolute minimum[9, 10] as majority of new cafés would not be making profit
in the first 12 months of operation.

We estimated working capital at $16,000. Of this total $9,000 is required to cover 3 months of rent.
Remaining $7,000 will be used to cover inventory and marking expenses. We did not budget for
owners’ salaries as we do not know owners expectations in terms of wages. We assumed that the
13
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

owners have sufficient extra savings to cover first months of operation and that the owners would
not hire any staff.

Contingency expenses

We assumed 15% of the total expenses to cover any unaccounted or underestimated expenses. This
amount would equal to ~$9,400

Below we summed all costs:

Lease and security deposit $9,000.00

Furniture, equipment and fit out
costs $30,000.00
Administration costs (e.g., legal,
insurance and marketing)
$6,200.00
Inventory $1,500.00
Working capital $16,000.00
Contingency expenses $9,400.00
Total startup costs $72,100.00

Considering our assumptions the total startup costs would most likely be higher than $72,100. But
our objective was to estimate the ‘absolute’ minimum costs that would be required.

For example, if we would include 6 months of working capital (instead of 3 months assumed
above), our startup costs would increase to $88,000. If we further include $60,000 for owners’
salaries to cover first 6 months of operation, our total costs would increase to $148,000. This
number becomes more consistent with numbers provided by café entrepreneurs e.g., the startup
costs for opening a coffee shop in Australia can exceed $100,000[6, 7].

Funding requirements
Taking into account our assumptions (see Estimated costs), the minimum startup expenses would be
$72,000. However, it is very likely that actual startup expenses can exceed $100,000.

Pricing

Crepes

By analysing menus of existing crepe and pancakes cafés (see Appendix A) sweet crepes are priced
between $6 and $12 and savoury crepes are priced between $7 and $16 (i.e., the retail price of a
crepe depends, for instance, on the type of crepe filling).

We calculated cost of ingredients to prepare both crepes without a filling and crepes with several
types of filling. Types of crepe fillings were identified through menu search of other crepe cafes.
Also, recommended sale price was based on the menus of other creperies in the Sydney region.

It can be noticed that crepes can provide over 80% gross profit margins.
14
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Recommended
Cost of Goods Sold
Sale Price

Buttermilk Crepe $0.34 $4.00

Buttermilk Crepe with
sour cream $0.37 $4.50
Ham and Cheese Crepe $2.19 $11.00
Pork Mince Crepe $1.00 $8.00
Tsesar Crepe (feta
cheese, bacon and
parsley) $2.28 $12.00
Strawberry Crepe $2.60 $9.00
Banana Crepe $0.79 $5.00
Nutella Crepe $0.90 $6.00

Coffee

Cost of making a coffee can be estimated as follows: cost of coffee + filter + cup[11]
1 kg of coffee would cost on average from $20 to $30[12]

24 g in @ $10.00 / pound = $0.53

cup = $0.12
sleeve = $0.065
lid = $0.05
filter =$0.07
total: $0.83

Sale price: $3.50

COGS /Sale price = $0.83/$3.50 = 23.8%. Thus, the cost of preparing a coffee is about 23.8% of its
retail price.

Sales Forecast

We assumed that the café would initially sell only crepes, coffee, tea and cold drinks. Considering
the price range for sweet crepes is between $6 and $12 and for savoury crepes is between $7 and
$16 we will assume that the ‘average’ price of a crepe is $10. Also, we assumed that the average
price for a cup of coffee or tea is $3.50 and for soft drink is $3.00.
We assumed that 60% of orders would include a crepe, 60% of orders would include coffee, 20%
would include crepes & coffee and 20% would include soft drinks.

We assumed that the creperie will be opened 6 days a week, 9 hours a days and will have on
average 70 customers daily. Additionally, we also assumed 5% revenue growth from year to year.
The table below shows sales revenue estimates in the Year1, Year 2 and Year 3 based on the above
assumptions.

Based on opinions from café operators, the first year of café’s operation would likely not result in
profit. Thus, the assumptions used above may not apply well for the Year 1.

15
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Year 1 Year 2 Year 3

Crepes $131,460 $138,033 $144,935
Coffee $46,011 $48,312 $50,727
Crepes & Coffee $59,157 $62,115 $65,221
Soft Drinks $13,146 $13,803 $14,493
Total Income $249,774 $262,263 $275,376

Profit & Loss Statement

The “Blinnitsa” café owners intend to work full time in the business and do not plan hiring casual or
full time staff. We intentionally did not include payroll expenses so that the owners could estimate
income that they can create for themselves from the business.

Income
Sales $249,774
Total Sales $249,774

Cost of Goods Sold

Opening Stock $ -
Stock Purchases $61,129
Less Closing Stock $ -

Total Cost of Goods Sold(COGS) $61,129

Gross Profit $188,645

Expenses
Advertising $2,500
Bank Account Charges $150
EFTPOS charges $720
Insurance $710
Rent $36,000
Energy $5,940
Water (based on 300 kL annual usage) $1,733
Professional Fees (Accounting) $400
Website $1,000
Utilities & Telephone $600
Other: Computer Software $300
Other: Cleaning Supplies $500
Expenses total $50,553

Net Profit before Tax (excludes salaries / wages) $138,092

The ratio of the Cost of Goods Sold to the total income is $61,129 / $249,774 = 24.4%. The ratio of rent
to the total income is $36,000 / $249,774 =14.4%. Both of these numbers appear reasonable[5, 11]

Break Even Analysis

16
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Based on the estimated operating expenses and the cost of goods sold, the creperie would need to
make about 20 orders a day to break even when expenses for owners’ salaries / wages are not
included. But if we would budget $120,000 for annual Payroll expenses, the café will need to serve
on average 63 customers daily.

Regulations
Development Applications (DA)

According to the Marrickville Council[13], Development Applications (DAs) are formal requests
for permission to carry out a development. 'Development' is defined under the Environmental
Planning and Assessment Act 1979 as:

the use of land;

the subdivision of land;
the erection of a building;
the carrying out of work;
demolition; or
any other matter controlled by an environmental planning instrument.

When a new café or restaurant is opened, owners will in most instances need a Development
application (DA). The zoning of premises intended to be used for a café will first need to be
confirmed. A real estate agent responsible for leasing of commercial premises would be able to
provide more details about the zoning. Local Councils would also have a planning and
development section in their websites.

If the premises has been previously used for another purpose (e.g., not for serving food and coffee),
before this space can be converted to a café, owners will need to submit the Change of Use
Development Application. The change of use applications are reviewed by the Council. According
to the Marrickville Council, the best case scenario for getting such applications approved is 90 days
from submission. However, the decision on the application can be delayed if, for instance, there are
objections from owners of neighbouring premises.

Just for information the Rockdale City Council has a detailed description of the Change of Use
Development Applications[14]. The City of Sydney Council has details guidelines on the process of
preparing and submitting the Development Application [15].

Food safety

The North Sydney Council provides detailed information for food businesses with regards to food
safety regulations. According the Council website[16]:
 A food business or premises is an enterprise or activity that involves the handling and sale of
any sort of food in Australia. Certain Councils may keep a register of the food premises.
Inspections may be carried out by a Council and restaurant/café owners would be required
to:
 Register business details with a Council
 Register business details with New South Wales Food Authority

17
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

 Ensure that all staff have appropriate skills and knowledge in food safety and food hygiene
in keeping with the activities of the business.
 Ensure that all staff are informed of their specific health and hygiene responsibilities under
Food Safety Standard 3.2.2
 Be aware of general food safety and hygiene requirements: NSW Food Authority guideline
brochures
 Regularly clean and sanitise the premises
 Provide a hand basin in the kitchen and toilet with warm water, soap and paper towels.
 Maintain correct temperature controls for hot and cold high-risk foods, including the use of
a probe thermometer
 Have a cleaning and pest control schedule
 Food-grade packaging is needed in contact with food
 Food storage facts to ensure food will be safe to eat
 Maintain the business: including the floor, walls, equipment and appliances.
 Have a staff illness policy which excludes sick workers from the workplace.

For specific details related to Development Application and food safety, the owners will be required
to contact a local Council which covers the area where the creperie café will be based.

Barriers to entry
Australia's coffee tradition and a large number of small speciality cafes and coffee shops have led to
a significant competition, low barriers to entry and low concentration of large industry players.

As long as café industry entrepreneurs understand and meet licensing and registration regulation
governing the café industry (see Regulations section) and have sufficient capital to meet the startup
cost, they can open a café. In fact, a large number of new cafés and coffee shops are opened in
Sydney every year.

Team
Blinnitsa founders have a passion for food and acquired some business experience in various
industry sectors including hospitality. However, most of their experience originates from working
overseas. Based on information available, the owners do not have experience running a small
business in Australia. Additionally, the team does not have a track record in running a restaurant or
a café overseas or in Australia.

The owners plan to run the business themselves rather than employing a professional café manager
in order to reduce overheads and startup funding requirements.

Business Risks
Café or Restaurant viability depends on a number of factors including owners’ family life cycle,
internal environment (e.g., product, financial, leadership etc), organisation life cycle and external
environment (e.g., demographic, legal, suppliers, regulatory etc).

Failure rate of new restaurants and cafés is very high. Studies in the US have shown that about 26%
of restaurants close or change ownership in their first year of operation[17]. At the end of year 3 the

18
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

restaurants failure rate rises to 60%. In London alone, 158 new restaurants opened in 2006 and 89
were closed during the first year[18]. The following common business risks have been identified:

 Lack of sufficient financing to start and operate a café. It takes time for customers to find
out about a new café and for a café to build reputation in the community. Thus, café’s first
year income would likely be small. Thus, a new café needs to cover both startup costs and
potentially about one year’s worth of salaries/wages
 Poor strategic management of business and lack of strong financial controls
It was shown that ongoing financial management of a restaurant is a good predictor of
restaurant viability. Management skills are important in staff recruitment and training. Poor
people management can lead to high staff turnover rates
 Lack of business expertise and knowledge of café / restaurant operations
 Poor choice of location
 Failure to differentiate and understand competition
 Inability to maintain management flexibility and innovation. Owners need to understand
changing competitive landscape, be able too promptly address issues or alter plans in
response to changes in external factors
 Poor or inconsistent food quality
 Work-family balance pressures
Manager’s ability to balance family matters with the development of a restaurant is critical
for success. Owner’s commitment to the business will be especially critical in the first few
years of operation.

Results of Idea Evaluation

In this analysis, we identified two main issues have been identified with the business idea of
opening the Blinnitsa creperie

 Lack sufficient financing to meet startup costs. The owners indicated that they expect to
start their business with about $35,000. This amount is well below the minimum estimated
costs of $72,000
 The team does not have experience in operating a café or a restaurant in Australia. Lack of
knowledge of café / restaurant operations was identified as one of the key reasons for
restaurant failure.

Recommendations
 Find a partner with direct restaurant experience in Australia. The partner might also be able
to bring additional cash to invest into the business. Alternatively owners’ need to receive
hands on experience working in a café or a restaurant in Australia
 Consider starting a take-away crepe kiosk as crepes appear to be well suited for take-away.
This will potentially help reduce the rent, fit out and other operational expenses. When
business would start showing profits, owners may decide to expand to a full size café
offering crepes
 Show flexibility in terms of location for a café, e.g., not just Marrickville. There are two
main reasons for this. First, renting a space in good condition for a café at an affordable rate
is very difficult in the Sydney region. For instance, at the time of writing this report we were
not able to find any suitable space in Marrickville. Owners would need to consider various

19
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

suburbs in Sydney to help finding acceptable lease arrangement. Second, certain suburbs
can provide potential for higher income. We compared census data available through ABS
for Mosman and Marrickville (see Appendix B). This analysis may suggest that Mosman
could provide broader customer appeal and would have more potential customers for the
crepe cafe.
 Talk to existing café owners and managers to help better understand the issues they face and
potentially help finding a partner for the creperie business

Planning4Business can help you perform in-depth market research for your business. As part of
such research we will dozens of cafes, talk to the owners, get valuable business insights and contact
potential suppliers. We would also perform analysis of the foot traffic and estimate turnover of
various cafes in locations that the owners consider for their business.

Industry Links
 www.abs.gov.au Australian Bureau of Statistics
 www.urbanspoon.com Sydney restaurant reviews from critics, food blogs and fellow diners
 www.yelp.com.au People use Yelp to search for everything from the city's tastiest burger to
the most renowned cardiologist. What will you uncover in your neighbourhood?
 http://www.marrickville.nsw.gov.au Marrickville Council
 www.realcommercial.com.au Commercial Real Estate & Commercial Property for sale &
lease
 http://australia.businessesforsale.com/australian/ Businesses For Sale
 http://www.flyingsolo.com.au/forums/index.php Flying Solo, Australia’s solo & micro
business community
 http://www.gumtree.com.au/ Gumtree, local classified ads and community site
 http://www.coffeeforums.com/ A community for coffee lovers
 http://coffeegeek.com/forums

The Top Australian Online Directories

 TRUELOCAL : http://www.truelocal.com.au/
 HOTFROG : http://www.hotfrog.com.au/
 WEBSITE LINK : http://www.websitelink.com.au/
 FLYING SOLO : http://www.flyingsolo.com.au/
 YELLOW PAGES : http://www.yellowadvertising.com.aug
 LOCAL BUSINESS GUIDE : http://www.localbusinessguide.com.au/
 START LOCAL : http://www.startlocal.com.au/

References
1. Australia, I. Trade Marks. Available from: http://www.ipaustralia.gov.au/get-the-right-ip/trade-marks/.
2. AUSTRALIA INFLATION RATE. Available from: http://www.tradingeconomics.com/australia/inflation-cpi.
3. Businesses For Sale.
4. Commercial Real Estate & Commercial Property for sale & lease. Available from:
www.realcommercial.com.au/.
5. Cafe? Good business? ; Available from: http://forums.whirlpool.net.au/forum-
replies.cfm?r=33706664#r33706664.

20
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

6. Cost of cafe fitout. Available from: http://www.flyingsolo.com.au/forums/starting-business/7748-cost-cafe-

fitout.html#post43258.
7. Need help in cafe start up: Start new or Buy existing? ; Available from:
http://www.flyingsolo.com.au/forums/starting-business/7353-need-help-cafe-start-up-start-new-buy-
existing.html#post41015.
8. Grease Trap Cost & Installation Cost. Available from: http://forums.whirlpool.net.au/archive/2162105.
9. Opening a Restaurant - The Mystic of Working Capital. Available from:
http://www.restaurantexperts.com/Opening-a-Restaurant---The-Mystic-of-Working-Capital-v-156.html.
10. Restaurant start-ups need working capital. Available from:
http://www.heraldtribune.com/article/20080204/COLUMNIST07/802040652?p=2&tc=pg.
11. Average COGS for a standalone coffee shop. 2013; Available from:
http://www.coffeeforums.com/forum/coffee-industry-forum/10854-average-cogs-standalone-coffee-shop.html.
12. ; Available from: http://www.coffeecompany.com.au.
13. Development Applications. Available from:
http://www.marrickville.nsw.gov.au/en/development/development-applications/.
14. Council, R.C. Guide on lodging a ‘Change of Use’Development Application. Available from:
http://www.rockdale.nsw.gov.au/development/pages/pdf/development/FS-ChangeUse.pdf.
15. Sydney, T.C.o. How to prepare your DA. Available from:
http://www.cityofsydney.nsw.gov.au/development/application-guide/application-process.
16. Council, N.S. Information for Food Businesses. Available from:
http://www.northsydney.nsw.gov.au/Business_Parking/Inspections_Regulations/Food_business/Information_for_Food_
Businesses.
17. H. G. PARSA, J.T.S., DAVID NJITE, and TIFFANY KING, Why Restaurants Fail. CORNELL
UNIVERSITY, 2005.
18. Winterman, D. Can't stand the heat... 2007; Available from:
http://news.bbc.co.uk/2/hi/uk_news/magazine/6966470.stm.

21
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

APPENDIX A
Time
Company Location Opened $ Menu Customer Comments & Reviews

1. My friends and I waited 20-30 minutes for a table around noon on Sunday. After getting
seated, we ordered a combination of sweet and savory pancakes and crepes to share.
The pancakes were not fluffy or well-made and simply had a lot of things dumped on them
(e.g. chocolate sauce, bananas).
Sweet pancakes: $7-14;
While the location is nice, I would truly recommend skipping this place and going
Savoury Pancakes: $7-
4 Hickson Rd, The somewhere tastier with a shorter line. 2.
24 hours $14;
Rocks, Sydney The pancakes, tho, had way too much butter melting on top of them and just a little scoop of
Savoury Crepes: $15-
vanilla ice cream. Overall it was a nice dinner but if you don't like to raise your voice to talk
$16
to the person in front of you, you might want to avoid weekends.
3. The pancakes are OK, nothing special, but decent. There are a lot of different variations,
with different kinds of toppings, so yum. They also have some savory ones worth checking
out.
Pancakes Rocks
www.pancakesonthe
rocks.com.au entric Park, 4 Hyde
Parade, Campbelltown

227 & 229-230

Harbourside Shopping
Centre, Darling Harbour
100 Briens Road
(Corner of Redbank
Road) Northmead
3 George Street, North
Strathfield (Next to
AMF bowling)

22
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

1. Shop 9 K5B World

Square Shopping
Centre680 George Delicious buttery crepes with a huge variety of fillings. So far I've tried the Nutella crepe, the
StSydney New South Sun-Wed 9am- strawberry & brownie crepe and the chicken Caesar savoury crepe. All were delicious, the
Wales 2000 9pmThur-Sat $5 - $15 Nutella crepe especially so. I probably wouldn't order the strawberry & brownie one again as
(Note: this café is 9am-10pm it was so sweet it left me with a toothache and a headache, and possibly type 2 diabetes as
currently looking for well.
potential franchisees in
Mother's Crepe Australia)
(www.mazazucrepe.
com.au)
If you've got a real sweet tooth, a craving for a crepe or just need a quick dessert fix in the
city after dinner or lunch this is the place to go. Its in world square on the lower ground level.
Shop 1167, Level 1,
The take away joint serves up crepes with different sweet and savoury fillings, rolled up for
Westfield Parramatta
you to eat on the go in a cone-like shape.
Sydney, NSW 02150;
There are several options to choose from displayed both on the menu and in a mock-plastic
04 3393 2662
display variety in the cabinet on the side of the booth. The banana, banana-choc brownie and
soft serve options are my favourites. Prices range from $5 upwards depending on the fillings

A great selection of sweet and savory, but a tad on the pricey side when you consider for a
Claire's Crepes Nutella Crepe you're paying $10 bucks. A bit ridiculousness but they are tasty. But they do
give the option of a dollop of cream and chocolate sauce on all sweet crepes (although I
(www.urbanspoon.c Sweet crepes: $8-11; didn't take advantage of this option).
457a King St
om/r/70/1605860/re Savoury crepes: $10-
Newtown New South
staurant/Sydney/Eas $14; They offer a delightful take-away option presented in a nice box with some plastic cutlery,
Wales 2042
tern- Coffee: $3-3,5 but this place could really benefit from the typical european cone take-away option so you
Suburbs/Claires- can eat and walk.
Crepes-Double-Bay)
Total plus for the gluten intolerant, is this place offers Guten Free crepes! Bonus!

23
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

1. I didn't expect to find such a lovely creperie in Redfern, the coffee is smooth and hot! and
the crepes are tasty with a lovely fluffy dough. I had a breakfast crepe for lunch and it filled
The Crepe &
me up the whole afternoon. Watching the guy make the crepe is very entertaining. They have
Coffee Co Mon-Fri 6:00 - Breakfast $5.00-$11.00
a childs play area at the back too 2. What was
60 Regent StRedfern 16:30Sat 8:30 - Sweet crepes: $8-12;
once a funky little cafe where great coffee and tasty Crepes were had had seemingly acquired
(www.yelp.com.au/ New South Wales 2016 15:30Sun 9:00 - Savoury crepes: $7-$10;
new owners. All the little things concern me, new size options for coffee, less than fresh
biz/the-crepe-and- 15:00 Coffee: $3,5-4,0
produce, dodgy top 40 dance soundtrack. No longer a cool little haven that it once was. The
coffee-co-redfern)
simple lemon and sugar crepe is still good though, although the new icing sugar on top is just
unnecessary. The coffee, thankfully is still good!

Monday
1. I wish they were open during lunch hours on weekdays :( Alas, I'll have to stay back after
ClosedTuesday6
work if I want some yummy crepe-y goodness.2. They serve REALLY YUMMY handheld
137 Enmore Rd, pm-
crepes. The crepes are a bit crispier - though not really CRISPY, they're crispier that the soft-
EnmoreJust down the 11pmWednesda
style crepes, if you know what I mean. I've tried both savory and sweet ones and I like them
road from the Enmore y6pm-
Doughbox both! (My faves are seduction (sweet) and inferno (savory).)The decor is really cute, done in
Theatre, directly 11pmThursday6 Sweet crepes: $8-12;
vintage style. The lady who does the crepes is dressed up too and fits right in. The people
opposite the Duke pm- Savoury crepes: $10-
(www.doughbox.co who work there are friendly. Besides crepes, they have waffles, shakes, gelato, and have
Hotel Phone (02) 11pmFriday6pm $12 Coffee: $3-3,5
m.au ) started offering pizza (gotta try that one of these days.) A must visit when you're in Enmore
9565 1995Email -
next - if you love sweet and savoury things, you can't go past their handheld crepes - and
[email protected] 12amSaturday6
you've got so many options to choose from. If crepes aren't your thing, they also have a wide
m.au pm -
selection of Gelato, and even waffles. They're not kidding when they say hand held crepes
12amSunday
are addictive!
6pm - 10pm

Crepes Kingdom
02 9568 5554 Shop
(www.urbanspoon.c 26 Italian Forum works all days Sweet crepes $11-13
om/r/70/1567453/re 23 Norton St from morning to Savoury crepes: $13-
staurant/Sydney/Cre Leichhardt New South evening $14
pes-Kingdom- Wales 2040
Leichhardt )

24
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Potts PointSydney New

Lalas Petit
South Wales 0413 339
Creperie
700. Open: Sundays
(www.yelp.com.au/
from 8am -3pm. Special
biz/lalas-petit-
events in Sydney CBD.
creperie-sydney )
It is a mobile vending

Chez Lulu is Sydney’s first traditional crepery which sells galettes (savory crepes). Unlike a
sweet crepe, a galette is made from gluten free buckwheat. Chez Lulu uses organic
Monday -
buckwheat and makes them to traditional French pancake recipes.
Chez Lulu Friday 7:00
(www.urbanspoon.c 24 Bronte Road, Bondi AM-5:00 PM
1. Sweet crepe was amazing. Decent prices. Friend had savory crepe that wasn't so crash hot.
om/r/70/1430357/re Junction
Food came rather quickly, not so quick our coffees which came after we'd started eating. We
staurant/Sydney/Che NSW 2022 Saturday: 8:00
then had to ask for water again as it hadnt come. I could quite easily forgive the slow service
z-Lulu-Bondi- Phone: (02) 9386 5771 AM-5:00 PM
again for that chocolate, strawberry, pear & ice cream crepe. Devine. 2.
Junction ) Sunday: 9:00
Maybe I came with too high of an expectation. For their savoury crepe, I thought it was
AM-5:00 PM
alright, not as good as others had said. But excellent coffee!will come back agin for their
sweet crepes!

Really good little funky place. May be a little hard to spot as it is just down an alley way.
Mon - Fri: Only way we realised it was there was someone walking out with a good looking crepe! And
Crispy Crepe
10:00 am - 7:00 yes the food is great. They do both savoury and sweet crepes. We got a nutella/peanut butter
(www.eatability.co Shop 3, 98 John st
pmSat - Sun: crepe and also a black sesame sundae crepe. The 1st was more like a thin wafer like biscuit
m.au/au/sydney/cris Cabramatta NSW 2166
10:00 am - 9:00 and the sundae had ice cream, cream and wafers. The texture and taste of the crispy style
py-crepe)
pm crepe is unique and have to say good! For a nice little stop day or night you will enjoy it in
here. And at the very cheap prices you will be even happier when you leave!

25
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Crepe Gallery Breakfast

(www.urbanspoon.c $8.00-$16.00 1. Just came across this adorable little restaurant that just opened up and loved it! The savory
om/r/70/1712844/re Neutral Bay Junction crepes were surprisingly filling and interesting flavors. Cute cafe/wine bar with an intimate
staurant/Sydney/Ne Shop 4, 48 Yeo St Lunch feel and lovely staff! Have gone for dinner as well as for a wine and dessert. Definitely worth
utral-Bay- Neutral Bay NSW Mains $8.00-$16.00 a visit! 2. Japanese run crepe place, friendly staff. Has a great
Cremorne/Crepe- 2089(02) 8971 3156 deal - one savoury and one sweet crepe for $15. Savoury crepe was great with the fried egg
Gallery-Neutral- Dinner but the sweet crepe with the home made caramel sauce was not as inviting as it looked.
Bay) Mains $9.00-$20.00

1. A delightful creperie just off military rd in mosman. Wide range of traditional and
Four Frogs Mosman Sweet Crepes: $6 -1 innovative creeps made right in front of you as creeps always should be. Good coffee too.2.
Creperie 175 Ave Rd Mosman, $12 Our group tried a variety of crepes. The boysenberry, Nutella & banana, sugar & butter,
(www.fourfrogs.co NSW 2088 Savoury crepes: $11- salted caramel & fig and finally the egg, cheese, mushroom and bacon (which was LOADED
m.au) 04 2165 1597 $15 with mushrooms and bacon). All were great except we struggled to find egg in the egg one.
Seemed like tons of cheese and mushrooms and barely any egg.

26
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

APPENDIX B
We analysed census data available from the Australian Bureau of Statistics for Marrickville
and Mosman. The two suburbs have similar population.
30,000
Female
25,000 Male

20,000
Population

15,000

10,000

5,000

0
Mosman Marrickville

It is known that crepe consumption is widespread in France, Belgium, Quebec and many
parts of Europe. Mosman has a larger % of population of European origin and thus more
people would be familiar with crepes providing opportunity for broader customer appeal.

80
European or Australian Origin
% Population

60

40

20

0
Mosman Marrickville

There is correlation between eating out and income, with higher income earners eating out
and buying takeaway more frequently. The household income in Mosman is 75% higher than
in Marrickville suggesting that there would be more potential customers visiting a café or a
restaurant.

27
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

$3,000
Household Weekly Income
$2,500
$2,000
$1,500
Mosman
$1,000
Marrickville
$500
Australia
$0

28
Business Idea Evaluation Report: “Blinnitsa” Crepe Café

Idea Evaluator Submission

29
 COMMERCIAL IN CONFIDENCE

Idea Evaluator Form

1. Contact Details

John Doe

"Blinnitsa" Crepe café

[email protected]

+61-4-xxxx-xx-xx

2. Your Business Idea

Describe your business idea, product or service (Try to be concise and accurate)
Open an Eastern European style crêperie ("Blinnitsa" is the proposed name) that will offer a wide variety of
sweet and savoury crêpes with famous red caviar, cottage cheese, beef and egg/cheese & ham etc.

Have you identified specific problems or challenges that your business idea will solve?
Yes No

If Yes, please provide details below

There is only a limited number of places in Sydney where one can find delisious crepes. At the same time crepes
are easy to cook, they are great option for breakfast and lunch and once can make a wide range of crepe fillings
for all kinds of tastes. The Blinnitsa owners came to Australia from Eastern Europe. Creperies are very popular
there and the number of creperies is continuously growing. There are several leading crepe café chains that
continue to grow in size. It would be great to have more creperes in Australia's metrolpolitan cities.

What are your product or service key attributes?

We will use Eastern European recipes for making crepes. Crepes has a long lasting tradition in both Russia and
Ukraine and this allowed developing unique and delicision crepe recipes for almost any occasion. Crepes has
been known to Slavs for hundreds of years. Crepes were prepared in Eastern Europe for the most prominent
events including weddings. Maslenitsa, a "crepe week" is celebrated by millions of people in Russia, Ukraine
and Belorrusia and symbolises an imminent end of the winter

What are its potential drawbacks?

Australia has a great variety of foods from other countries, so there is a lot of indirect competitors offering other
food. Not sure whether Australians ae sufficiently familier with crepesa and whether lack of knowledge would
create obstacles in the business.

How will your product or service benefit your customers?

Crepes are delisious. quick to cook and can be well suited for business people, family gathering and affluent
travellers. They are both quite healthy and convinient food option for breakfast and lunch. They are cooked once
ordered - so crepes are alwas fresh

How it is different from products or services that are already available? (e.g., is your product provides more
convenience, better quality, lower price)?
There are limited number of creperes in Australia. We know about Pancakes Rocks which serves 'American"
style pancakes and have limited assortment of crepes as well. To our knowledge no Eastern European style
crepes are available

What is the stage of development of your business idea?

Page | 1
©Planning4business
 COMMERCIAL IN CONFIDENCE

Just an idea (i.e., there is no product or service yet developed)

In development (i.e., initial product prototype is made, beta-version of software is developed). Please
provide details

Other. Please provide details

Our internal team of two founders/owners had several meeting to discuss the idea of forming the crepe
café/restaurant. We discussed the potential location where we want to establish Blinnitsa crepe café (in
Marrickville) and discussed potential resources that we can commit to this business

What resources will you require to launch your product or service (for example, access to certain equipment,
people with specific technical skills, etc)
We would need to have some intial funding, rented space and perhaps some approvals from the governent
Council. We also need to better understand potential competitors and develop a plan how to build a succesful
crepe café.

Which of the required resources do you currently have?

One of our team members has intial cash that we plan to put into the business. We would like to put around
$30,000-$35,000 into establishing the café

Do you have or plan any Intellectual Property and proprietary rights for your business idea?
No

3. Market Opportunity

What is your target market?

Business people, families with children and affluent travellers that want to have delicious food but do not want
to pay a lot and do not have much time to wait until their dish is cooked

How big is the target market? Estimated number of potential customers?

We have not conducted such customer research, but we anticipate that a number of people will be visiting and
eating in our crepe café. We anticipate that crepes that we will offer in our café will be quite unique and not
available from competitors

How will you reach your target market?

We plan renting a space for a café in a location with the good foot traffic.We also plan to advertise our business
online and through our website

Is there a growing market demand for your business idea or will you take away market share from your
competitors?
We believe that we can offer crepes which are unique in their taste. The people will appreciate our distinctive
menu and will be isiting our café regularly. People always will need to be making choice between different cafés
and restaurants offering diverse choices of food. But as long as our café offers delicious food and good customer
service we should have some customers

Page | 2
©Planning4business
 COMMERCIAL IN CONFIDENCE

Please describe emerging market opportunities that your product or service helps to capture?
In Eastern Europe there are several large chains of crepe café that continue growing in size. So in future there
might be a potential to offer a franchise for our café

4. Customers

Who are the customers for your product or service?

Consumers/General public
Business Clients
Specific industry
Government

Why will customers buy your products/services? (e.g., status, pleasure, quality, price, security, durability)
Customers who want delicious food but do not want to pay a lot of money or are not willing to wait for long
time until a dish is being cooked

What price(s) will I charge for my product or service? Why will your customer pay this much?
We have not investigated the pricing but we expect that our café pricing will need to be comparable to other
cafes. We do not think that our pricing should significantly differ from sandwich bars etc - so we do not think it
will be a problem for customers to pay.

How you will promote your product or service to customers?

We plan using our website, social media , printed leaflets and word of mouth to advertise our café initially. Also
we will rely on a foot traffic. We anticipate that once our cafe will become known in the community we will
have a number of returning customers so our marketing expenses will decrease over time

How you will deliver your product or service to customers?

Customers would come to our café during the week days and weekend. They can eat in or take away the crepes.
We would also consider home/office delivery to customers in local community in the future

5. Competition

List your most important competitors? Why do customers buy from them?
Pancakes Rocks
Perhaps some other cafes/restaurants. We have not yet researched

Your competitors’ strengths & weaknesses?

Stenrengths:
Pancakes Rocks has a very popular location near the Rocks. It is reasonably priced, has relatively good customer
service, but also offers meat, pizza in addition to pancakes. The square foot area of the Pancakes Rocks is rather
large allowing them to host party celebration where large groups of people are coming. This place is often very
crowded.

Weakeness
Pancakes rocks has an "american" style pancakes and only limited crepe selection. Also the taste of pancakes

Page | 3
©Planning4business
 COMMERCIAL IN CONFIDENCE

and crepes is not that good - it's reasonable

Your strengths & weaknesses?

Strenghts
The only place with Eastern European Crepes
Weakeness
We may not be able to get large space in a popular location - thus foot traffic and café income will be lower

What is the competitive advantage of your product or service? (e.g., pricing, quality, unique features, targeting
underserved market niche)
The wide range of delicious Eastern European crepes that are not available from competition

How you will sustain your competitive advantage in the long term?

6. Financials
Estimated total costs to develop and launch your business idea?

<$10,000 <$50,000 <$100,000 <$500,000 >$500,000

Do you have access to the required capital?

Yes
No
If No, which alternatives have you considered to secure additional funding? Select from the list below
Family & Friends
Equity investors (e.g., angels, venture capital)
Bank Loan
Business Partners
Other. Please included details below
One of our partners is planning to make cash investment into starting this business. Another partner will be
managing most of the operational and startup matters involved in starting and operating the business

7. Team
Does your team have specific expertise in your proposed product or service?
No
Yes
If Yes, describe your team’s experience with your proposed product/service
One of our partners has been an owner of the hotel in St-Petersburg. Hotel also had a restaurant. Another partner
has experience in marketing and have started several small business although not in the food industry

What skills required for execution of your business idea are missing in your management team?
We would benefit from expertise in running a café or restaurant in Australia

Briefly describe your plan to find required skills?

Page | 4
©Planning4business
 COMMERCIAL IN CONFIDENCE

No plan at this stage. We want to operate with internal recources to minimise statup costs e.g., owners will be
working in Blinnitsa creperie (at least initially)

8. Business Risks

Are there any significant risks that can affect viability of your business idea? (e.g., access to highly specialised
equipment, regulatory compliance regulations, requirements for permits, licenses or certifications, ease of
duplication by competition)
people may prefer other food choices instead of the crepes- because the food variety in Australia is very large

Have your identified any potential faults or limitations of your business idea?
We know that crepe cafes are very popular in Russia,Ukraine and France). This crepe business continues to
grow with a number of new crepe cafes opened in large cities across Russia and Ukraine. But we do not know
whether crepes can be as popular in Australia as they are in Eastern Europe and France. People tastes can be just
different in here.

Have your considered a possibility of customer resistance or significant obstacles to market entry?
We are not aware of significant obstacles

Page | 5
©Planning4business