1. Incorporate Your Business
The first step to bringing your company to fruition is to incorporate it! Incorporating your food business is a long process with many stages but follow these 3 steps to make it as simple as possible.
- Choose a business entity: Before you begin anything, you first must decide if your food business is a Private Limited Company (PLC) or Sole Proprietorship. New companies tend to lean towards registering as a PLC due to its scalability1.
- Register your company: Pick a name for your business and get it approved by the Accounting and Corporate Regulatory Authority. A resident director will have to be appointed for the application, and you’ll need to have all the necessary documents presented, such as a brief description of business activities, company constitution, directors’ and shareholders’ identification and residential details. Do note that registration fees cost S$50–S$600 for local Singaporeans, and S$300–S$1200 for foreigners depending on the type of company registered.
- Open a corporate bank account: Upon registering your company, you can now open a corporate bank account in any major bank in Singapore, such as DBS, OCBC, and UOB.
2. Create a Restaurant Business Plan
Before you get into the thick of it, it’s important to have a business plan that lays out your business objectives, strategies, and timelines clearly. A good restaurant business plan identifies the financial and operational risks and how to counter them. Here are 5 things you should not miss out on in the plan.
- Restaurant concept: Think about the unique selling point of your restaurant and your target customers, and clearly state them in the plan.
- Financial Projections: Project your finances from one, three, and five years from now. Note down your current expenses, expected spending on specific items, how you plan to secure funds, additional costs that you may incur, and potential returns.
- Restaurant Operations: Map out how your daily restaurant operations will be like — this includes staffing, inventory control, and food waste, amongst others. Learn how you can improve your restaurant’s operations efficiently.
- Menu pricing plan: Calculate your restaurant menu prices using food cost percentages and gross profit margins to ensure that the menu items are priced profitably. Learn how to price your menu for profit.
- Marketing strategy: Decide what you want your brand image and identity to be, as well as the marketing tactics or tools you will use in your online and offline marketing. Learn more from UFS’ course on online tools for your food business.
3. Choose a Strategic Location
With such a competitive food & beverage (F&B) industry3, where you choose to set up your restaurant could very well shape how successful your business becomes. A great restaurant location can attract customers and generate more profit. So, what makes a great location? Consider these 4 factors to select a great spot for your restaurant.
- Nearby Competition: Avoid areas with similar establishments nearby that will make it hard for you to differentiate your business.
- Foot traffic: Pick areas with high foot traffic, such as near workplaces, commercial establishments, or other locations that can make your location a more desirable one.
- Size and amenities: Ensure the venue size can handle your customer volume and that the kitchen can adequately house all your equipment.
- Costs: Think about the costs involved in opening your restaurant there, in terms of contracts, permits, insurance, interior design, kitchen equipment, and staffing plan.
4. Get the Essential Permits and Licenses
Before any restaurant can open its doors in Singapore, it must obtain the necessary permits and licenses. The Singapore government has strict regulations in place, so ensure that you do not miss anything out. These are 6 crucial permits and licenses to have:
- Food shop license: This is the most important license you’ll need to open an eatery in Singapore. You must submit an application to the Singapore Food Agency (SFA), which will cost you S$195 and be valid for a year4. Authorities will then inspect your chosen restaurant location before granting approval for the license.
- Halal Certification: If you wish to appeal to Muslim customers in Singapore, it’s crucial that you have this certification.
- Trader’s license or registration: If you intend to import food products such as meat, fish, or fresh fruits and vegetables into Singapore, remember to apply for this license with SFA.
- Liquor license: If you plan to serve alcohol in your establishment, you’ll need to get a liquor license. It is issued by the Singapore Police Force and costs between S$110 and S$880, depending on the category you apply for5.
- Staff Central Provident Fund (CPF): You’ll need to register as an Employer with CPF, as all Singapore employers must pay CPF contributions to their employees who are Singaporeans or Singapore Permanent Residents, and who earn more than $50 a month6.
- WSQ Food Safety Course Level 1: All food handlers must pass this SFA course to get certified7.
5. Purchase Kitchen Equipment
Your kitchen is the heart of your business where your menu comes to life, and it’s important that it is fully equipped to provide everything your restaurant needs. Purchasing kitchen equipment is a significant investment. Learn more about the types of equipment that every restaurant needs, and the considerations that should guide your purchase decisions.
- Kitchen space: Analyse the floor plan of your kitchen. See how each equipment will fit within the size and layout of your kitchen and get inspiration from equipment layout best practices.
- Quality: Allocate a higher budget to more important kitchen equipment, so that it lasts in the long run. Look into their material, certifications/awards, and maintenance requirements to determine their durability.
- Budgeting: List out your kitchen equipment in order of use and priority. For those lower on the list, opt for cheaper alternatives like second-hand or rented equipment, or choose multi-purpose equipment to save you some money.
6. Find the Right Suppliers/Distributors
Finding a good supplier and maintaining a strong relationship with them will greatly help to increase your profit margins. Not only can they ensure smooth-sailing operations by guaranteeing the supply of quality goods, but they can also help you to reduce costs by offering preferential prices. Here are 2 tips to help you shortlist the right suppliers.
- Cheaper isn’t always better: While affordable suppliers may seem more appealing, you should prioritise suppliers that offer quality ingredients that are value for money and ensure they have adequate quality control practices in place.
- Reliability is key: As kitchens run on tight schedules, suppliers must be on point with their deliveries and always deliver the correct number of items on time.
If you’re looking for the right supplier, we’re here for you. Check out our wide range of quality food solutions for F&B Businesses.
7. Marketing Your Restaurant
In today’s digital age where peoples’ purchase decisions are easily swayed by what they see online8, online marketing can make or break your business. When done right, online marketing can boost the popularity of your restaurant, especially if you tap on viral trends to feature your appealing food and drinks. Don’t want to break the bank on marketing your newly opened restaurant? Here are some low-cost marketing strategies to help you get started.
- Social media: Having a strong social media presence can help you to bring in new customers and maintain existing ones. Play around with various content strategies to keep your customers engaged with your page. From holding contests offering freebies and gift cards, to influencer collaborations to promote your offerings — the possibilities are endless. Sign up for our academy course on social media marketing for restaurants to get yourself on the right track!
- Create and optimise your website: Your website is a key customer touchpoint that will influence peoples’ perception of your restaurant. These are 4 things to optimise on your website.
- Mobile-friendly: As most people use their phones to place their orders9, your website must be easily accessible and readable on mobile to provide a good experience.
- Updated information: Be sure to keep your website updated, so that customers won’t be disappointed by any misinformation that hinders them from buying their meals.
- Irresistible food photography: Consider hiring a professional food photographer to capture mouth-watering photos of your menu to feature on your website.
- SEO (Search Engine Optimisation): Bring greater traffic to your website by ensuring that your website is SEO optimised with a fast-loading time, target keywords, and internal links.
Opening a restaurant in Singapore can be a challenging but rewarding experience. While it may seem like a straightforward process on the surface, the reality is that it will be a never-ending journey of finding ways to adapt your restaurant to an ever-changing market. To set yourself up for success, be sure to have a concrete business plan, complete the necessary paperwork, engage the right suppliers, and leverage digital marketing for promotion — good luck!
References
2. https://www.acra.gov.sg/how-to-guides/setting-up-a-local-company
3. https://www.businesstimes.com.sg/singapore/smes/giving-entrepreneurs-chance-run-restaurant-rent-free
4. https://www.sfa.gov.sg/food-retail/licensing-permits/food-shop-licence
5. https://www.police.gov.sg/e-Services/Police-Licences/Liquor-Licence
6. https://www.cpf.gov.sg/employer/employer-obligations
7. https://www.sfa.gov.sg/food-retail/information-for-food-handlers/information-for-food-handlers
