In a 2014 study commissioned by SPRING, it is found that only 60% of the Singapore’s Food Services establishments survive their first five years of operation. The average micro and small business runs at an annual operating loss of 8% and takes up to two and a half years to break even. These figures are significant given that small and micro businesses make up about 85% of some 5,000 Food Services enterprises in Singapore.
Despite challenges like manpower shortage and high overheads faced by existing businesses, the F&B sector still sees a large number of new entrants. On average, 24 outlets were opened every day between 2010 and 2014. This can be attributed to the relatively low entry barrier and a high number of entrepreneurs driven by passion to start their own business.
Dr Koh Poh Koon, Minister of State for the Ministry of National Development and Ministry of Trade and Industry, launched the ‘Turning Passion into Profits’ Guidebook for Food and Beverage (F&B) entrepreneurs at Timbre+ today. Published by the Restaurant Association of Singapore (RAS) with support from SPRING Singapore (SPRING) and the National Environment Agency (NEA), the guidebook aims to help F&B entrepreneurs to better understand the challenges of starting and improving their business.
“Food is an important part of Singapore’s identity. Over the years, the Food Services sector has seen many new concepts, creative set-ups and international flavours. Consumers have no shortage of dining options. Aspiring F&B entrepreneurs need to be aware of operating needs, challenges and potential pitfalls. The guidebook provides information, checklists and examples to help shorten the learning curve and improve the chance of success,” said Mr Andrew Tjioe, President, Restaurant Association of Singapore.
“For any business, understanding the value propositions as well as the needs of target customers and being realistic with the financial and manpower resources required to operate are key to starting right. For the intensely competitive Food Services sector, we think that the guidebook will provide the practical guidance for entrepreneurs to start on the right footing and to refine their business,” said Mr Ted Tan, Deputy Chief Executive, SPRING Singapore.
The guidebook is developed to prepare entrepreneurs with a realistic understanding of business conditions and potential pitfalls, as well as provide them with tips, templates and comparative data to take on a systematic approach to assess their business viability. This will help improve the chance of success in their entrepreneurial journey in the Food Services sector.
Apart from the guidebook, F&B entrepreneurs and business owners can approach RAS and partners such as the Singapore Productivity Centre for advice. SPRING also has in place funding support that companies can tap on, for adoption of manpower-lean solutions such as digital services and kitchen automation, to fit the needs of their business concepts, and to improve productivity and customer experience.