Setting up a small F&B shop as an expat

[Walter_N]

Hey everyone,

As an expat thinking about starting up a business in SG, I´ve been reading around the forum, MOM and the SME Portal, but I still have some doubts. I can´t seem to find a lot of info about small F&B enterprises and the MOM´s negative to issue Entrepasses for Hawker stalls, Food Courts and Cafes has me worried.

So, a short breakdown:

I´m currently on a tourist visa (holding a Spanish pass). My background is in hospitality and I have qualifications from Barcelona´s Culinary Institute and 10+ years of certifiable experience working and running kitchens in Spain and Sweden. A minus here is that I don´t have certifiable experience on running a business (but you gotta start somewhere, right?)

The business would revolve around vegetable drinks and pastries. A very similar model would be Singapore´s Mr Bean shops, but we are looking to introduce a novelty product in the market. A full time shop subjected to shopping mall timetables would employ around 5 singaporeans.

I do have the initial 50k required by the MOM and an investor interested in a partnership, but I would require additional capital.

The burning, initial question for me is...will SG even allow me to get this going? Is it be possible for me to get an EP when trying to kick-start a small F&B business as an expat? Is there any other way to approach this?

What do you guys think? Is there any organization (MOM, SME...) that could give me a fair assessment? I find that the more I read, the more questions I have, and I don´t want to apply for an EP without knowing if there´s possibility of success.

I´ll keep informing myself but it would be much appreciated to get some input from those of you with knowledge on the subject.

Thanks in advance!

Cheers

Walter N

[Walter_N]

Oh, another question,

Would a drink product that has not previously been registered or patented in Singapore qualify as Intellectual property?

[x9200]

A drink - not really, but know-how, formula, trade secret, patent the drink is based on, yes. What's on your mind?

[Walter_N]

Thanks for the quick reply x9200

I suppose a formula or elaboration process could work.
I was thinking about the requisite of having an IP to get an EntrePass, and also wondering if we could benefit from the Productivity and Innovation Credit Scheme

[x9200]

Do you have it registered with the MOM approved IP office?
http://www.wipo.int/directory/en/urls.jsp

[Strong Eagle]

I wouldn't bother trying to go the route of the Entrepass. Even if you were to get it, the spend and employee training requirements to retain it are onerous, to say the least. And the way the Entrepass has been restructured, it seems pretty clear that its intent is technology development, not F&B.

Your best bet would be to form a pte ltd with a normally resident director (rented or otherwise), then submit an EP application (manually), which enables you to become managing director, and include a well-detailed business plan, investments and capital available, etc. Since it sounds like your intent is to open a chain of shops in multiple malls, you ought to include a five year expansion plan and solid pro forma financials. I believe MoM still uses Spring to evaluate business plans so make sure your projections are plausible and realistic.

In your case, you might also want to come up with an external independent director with restaurant management experience to direct and mentor you. Your plan has to be robust (and expensive) enough so that you're not seen to be competing against local mom and pop coffee shops and hawker centers.

My sense is that S$250K is the minimum price to pay in Singapore to get started with $500K for a full restaurant closer to the norm. Rents are hellishly high, foot traffic difficult to estimate, so it's absolutely essential to do your demographics due diligence. With the clamp down on 'foreign talent' decent help is hard to attract and retain, even with wages that seriously compromise your profit margins.

I'd really do your homework before committing time and funds, especially since you have no F&B management experience, and again, especially no experience in Singapore. Permitting and inspections are a nightmare (one fellow nearly went bankrupt due to delays in opening). You've got your supply chain to deal with. And finally, if you were to research business back issues of the birdcage liner, Today, and Asia One, you'll see that restaurant failures are very common, and with the recent changes in work permits, even several old venerable institutions have given it up, citing rents and inability to find labor as the principle reasons for throwing in the towel.

You'd probably do well to do some research on the shopping mall situation in Singapore as well... many tenants in the newer malls are complaining bitterly that the foot traffic that was promised has never materialized, and I believe a band of tenants has got together to try and break their leases at Scotts Square because of no customers.

[LeeW]

Strong Eagle that's a great reply. I've been looking at the F&B industry as a potential option as a business so I can stay in Singapore (after my previous employment came to an end). It's not an easy game from what I've found so far and I have a bit more to invest that the original poster. With massive rent overheads there's very little room to squeeze out a living, some make seriously good money but you have to be prepared that it's possible you will lose everything if not careful.

[PNGMK]

Go hang around Camp Kilo or some of the other F&B deals set up by expats - look for a mentor.