What does it take to start a food and beverage business in Singapore?
9 minute read
Food has always played a huge part in Singapore’s economy, tapping into the country’s eclectic mix of cultural influences. No one can deny the rich texture of the Singaporean food industry, infused with tastes of India, China, Malaysia, Indonesia and beyond. As a city that’s also obsessed with the next big foodie trend, you’ve got plenty of opportunities to make your mark with your own food business.
According to the Sleek Index Report, the Food and Beverage (F&B) industry was one of the top 3 industries with the most company incorporations last year, despite the pandemic! If you’re an entrepreneur who is easily adaptable and hungry for success, then you, too, can use the following steps to bring a thriving F&B business to fruition.
Step by step guide on starting a F&B business
There are many factors to consider when opening a food and beverage business. The key to successfully starting one in Singapore is coming up with a surefire plan that is sustainable and effective. Luckily, we’ve done the research for you and laid it all out in this step by step guide.
Incorporate your company
The first step is to bring your company to life on paper: incorporate it! This includes choosing a company name, finding a local Singapore address, and applying for a business license.
It is important to choose the right type of legal business structure for your company, the two most popular options being Sole proprietorship (SP) and Private Limited Company. Here is a resource explaining the merits of both. You must also declare your Standard Industrial Classification (SSIC) code, which indicates what your company does and in which industry.
There are slightly different requirements needed between local entrepreneurs and foreign entrepreneurs, but don’t worry – you can reach out to Sleek for our 100% digital incorporation services, and we’ll have your business up and running in 24 hours.
Hire a company secretary
The next step is to secure the services of a company secretary who will help your food and beverage establishment keep track of legal admin and maintain yearly filings. Company secretaries are an obligatory role for every company, and there are two ways to go about acquiring one: hiring in-house or outsourcing. If you outsource the role to a professional corporate secretary team, you’ll never have to waste time wondering whether your company is staying compliant with Singapore’s local laws.
Come up with a business plan and structure
Your company has been incorporated. Now what? Before you start cooking, you must have a business plan that details your business objectives, strategies, and timelines for implementation. A good business plan outlines financial and operational risks and proposes ways to mitigate those risks.
While a business plan is an excellent tool for companies to assess strengths and weaknesses, it is also critical in fundraising efforts. A good plan will attract investors and loan officers by helping them visualize your projected revenues, expenses, risks, and rewards.
Within your business plan, you should detail what kind of establishment you plan to set up. It can be something as simple as cart noodles or as fancy as a fine dining restaurant in the heart of Marina Bay Sands. In Singapore, you have endless options. Here are a few popular structures you can follow for your food and beverage business:
- Restaurants
- Bakeries
- Cafes
- Food court stalls
- Snacks and drinks counters
- Food catering businesses
- Bars
- Food trucks/wagons
- Cloud kitchens/fulfillment centers
Acquire all necessary licenses
While Singapore has a vibrant, fast-paced business environment, there are some fundamental food regulatory requirements you must meet before your business can join in. Licenses are given by the Ministry of Health for produce, manufacturing, and various other food-related operations. Different permits are needed depending on what you plan on selling; you can find a Guide to Licensing and Permits here.
Halal food, for example, is a large part of the Muslim community in Singapore. It emphasizes treating animals well and only uses certain animal-based ingredients for cooking. If you’re thinking of acquiring a Halal certification for your F&B business, it must fulfill a set of Halal Certification requirements known as the Singapore Muis Halal Quality Management System (HalMQ).
Hire an accountant & bookkeeper
Starting a business has its difficulties, but it can be especially hard if you’re going into it with no prior financial experience. It’s crucial to seek advice from someone with financial expertise in order to avoid these serious mistakes.
Accountants and bookkeepers can help you stay on top of your finances and take a load off when tax season comes around. If you don’t have the capacity to hire an accountant, don’t worry. It’s never been easier to digitally outsource accounting and bookkeeping. In most cases, it’s more efficient and cheaper than hiring in-house.
Find and hire the right people
On the topic of hiring, it’s crucial to find people who work hard and embrace your vision. The restaurant industry is fast paced and usually customer-facing, so you need workers who bring a good attitude and great work ethic to your team.
Singapore has a plethora of job boards on which you can post a job description, including Beam, CareerBuilder, Gumtree, Indeed, Jobiness, Monster, and many more.
Market and sell your products
Advertising, marketing, and public relations are all important in getting your brand heard and noticed. With a good communication strategy, you can gain traction and reach customers that won’t find you through word of mouth alone.
To successfully market a food business on your own, create a marketing plan that focuses on building your brand and advertising your goods. You can do this through social media ads, influencer marketing, advertorials in popular food magazines, or even pop up events like food festivals or annual food expos.
Scale with calculated steps
In order to scale your business, you must first create the conditions that will support future expansion. Set obtainable goals for where you want to be. Study the strategies of competitors who have succeeded in expanding their businesses. Establish guidelines to maintain profit margins and seek outside assistance where needed. Be adaptable, and always be objective enough to recognize the obstacles that are keeping you from progressing.
That’s where future-proofing comes in. Invest in an infrastructure that can help your business grow economically. Automate the admin processes that zap your time and energy, such as payroll, CPF, bookkeeping, annual returns. Automation takes care of menial tasks so you can focus on your business strategy.
Bonus content 💡
Insurance 🛡️
According to the Work Injury Compensation Act (WICA), it’s compulsory to have Workplace Injury Compensation Insurance for workers who perform manual labor or earn less than S$2,600 per month. Other insurance is not legally mandatory; however many food businesses in Singapore may still be required by their landlord to have Commercial Property Insurance or General Liability Insurance.
Funding 💰
There are many funding opportunities available, and often these are government subsidized. For example, the Professional Conversion Programs (PCP) is a career conversion program for new workers and mid-career professionals to switch careers. The government can help your company employ these workers if you state your interest here. The Jobs Growth Incentive (JGI) also subsidizes workers’ salaries in order to expand local hiring.
There are niche grants as well, like the Hawker’s Production Subsidy (HPG), which helps hawkers employ automation and technology to increase productivity. You could be eligible, as long as you register as a stall-holder with a current NEA/SFA hawker license and have at least one year left on your Tenancy Agreement.
There are constant updates and additions to the list of government grants, all of which Sleek can deliver straight to your inbox. Make sure to subscribe to our newsletter to keep up to date on new grants as they are announced.
Wrap up
Do you have what it takes to bring your business idea to life? With passion, grit, and an excellent plan of action, you can manage your own F&B business in no time.
If you have more questions on how to get started, explore our resources.
If you’re ready to jump right in and start your business, register your company with Sleek today.
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