Before entering into Food Hawker Business

Before you enter into the food hawker business in Singapore, you have to be a Singapore citizen or at least become a Permanent Resident. If you are below 21 years old, you are legally too young to qualify.

Finding difficulty in gathering information about how to start a hawker stall business in Singapore but you saw the opportunity? The list below is an overview of things you should consider when planning for a food business at food center.

1) Make sure you have the Sustainable Capital

First of all, never underestimate the start-up cost of a food hawker business in Singapore. Things are not really the same if you compare with the past. Getting a stall at low cost used to be for the poor and uneducated families in the good old days.

However at present, S$10,000 may only be enough capital just for the start up cost. Of course, there are people who manage to start it as low as S$8,000. It also depends on whether there is existing equipment left at the stall that is relevant to your business.

Set aside some funds to sustain the business for at least a 6-months period as the business still has to go on even if it is not doing well. You still need to eat and pay all sorts of bills at home and business stall. Wherever possible, keep your expenditures lean and avoid overspending or food wastage.

2) Perform your Market Research

In all business, it is necessary to do your Market research. The success of your business depends on the right questions asked and the method you choose. This will ensure that the data will be useful for making good business decisions that is strategic.

To ensure a reliable and holistic data, use a variety of method with different strengths of accuracy. For simpler and affordable way, refer to Statistics Singapore website to obtain some free statistical and unbiased data. Another method is to do a visual market observation. Get a second person to do the observation using the same method you use for comparison. The third method is to do a face to face informal feedback with the potential customers who visit your competitors.

3) Determine your Business Nature and your Product

Refine your business strategy to find your niche at this point base on your analysis on the market research data you have. In food business, everybody seems to be selling the same Chicken Rice and thus, it is essential to differentiate your business from the rest.

4) Identify your teachers, partners and employees

It is never easy to work on the business alone though many may list out the disadvantages of partnership due to conflicting issues between partners.

Partnership or sole proprietor, you still need a good teacher to leverage on, especially for the first timers. Look for one that will offer you advise and recommendations to suppliers or open up new possibilities for you. If you do not have one, you should start looking for one or reading the books that they published.

If you have employee, treat them well and provide a learning environment. When they are motivated and they know you believe in them, they can go very far and perhaps become your potential successor. Motivated employees may also be happy to help you spread great news about your business.

5) Determine your Food equipment and other inventory list

After reviewing the recipe and the process of making the product, as well as applying it on a small scale, it should give you some idea what the equipments, food materials and serving inventory that is required for the business. Put in as much details as possible but try not to agonize over it if you think it is not detailed enough. The details will sometimes show itself at the later stage.

6) Determine your breakeven analysis projection (BEP)

Breakeven analysis projection is a useful formula for calculating the volume of the business required in order to cover all necessary expenses. It is the monthly fixed cost (i.e. rent, overhead/utilities, labour) divide by the percentage difference between the selling price and the cost price.

For example:

If your monthly fixed cost is $20,000, and the food cost is about 35% of the selling price, the formula should be applied as:-

BEP = $20,000 /(100%-35%)
= $20,000 /(0.65)
= $30,769 (i.e. Total $$ you need to earn in a month)

Assuming the operating hours is 6 days in a week (about 24 days in a month),

Average $$ you need to earn in a day
= $30,769 / 24 days
= $1,282 per day

Assuming that the selling price of a unit = $2.50,

Average number of units you need to sell per day
= $1,282 / $2.50
= 513 units

(Note: It is advisable to do this calculation for 3 probable scenarios (the best, the worst and the middle range scenario.)

7) Find the food stall location (food center, food court or cafe space)

With the calculated budget you have at hand, look for the right food stall for the right crowd you have designed to cater to. Sometimes, it is necessary to change or modify your menu to suit the type of crowd at your selected stall.

8) Determine your source of food materials resources

If budget is of concern, especially for those who are first timers, it is recommended not to overstock or it may incur unnecessary food wastage cost. Always be conservative on the portions to sell for the week and month. Typically, a wholesaler would only sell you for bulk purchase so it is wise to buy them nearby the food stall premise for start.

9) Get a 'Food Hygiene' certificate

It is compulsory for all food handlers to obtain a food hygiene certificate or there will be a major penalty. Since 01 Dec 2004, NEA has outsourced the trainers from various institutions or companies to conduct the 'Food Hygiene Course for food handlers'. The trainers will need to be approved by NEA.

The list of institutions or companies that conducts the course is currently maintained and updated at National Environment Agency (NEA) website.

The course and the examination fee differs slightly across the schools with different dates. One of the schools offers a transport to NEA for the examination immediately after the course, while another brings the NEA examiner to their school. So, do give them a call to see which one fits your schedule, budget and convenience before you make your decision.

10) Get your vaccination for Typhoid and Medical check-up for Tuberculosis (TB) (if above 45 years old)

All food handlers must be inoculated against Typhoid vaccination (Injection or Oral route) and subsequent Typhoid vaccination should be done every 3 years. In addition, for those who are above 45 years old, medical check-up and x-ray must be screen for Tuberculosis.

11) Get a license for your stall space

You can apply for your license online yourself or pay someone to do it for you. The website can be located at the home page of the NEA website at 'Online Application' folder, located at the top of the web page. From there, it will lead to a various type of license you would like to apply for.

Politics at hawker centre

Do you think that politics only happen in office? Do you know it happens at hawker market too? Within the food hawker centers, everybody knows each other very well and their favourite past time is to spread news and interesting gossips. Sounds familiar? I believe so. And according to the local property agent, the record time for 100% news spread complete within the next 24 hours upon the start of trigger.

It makes alot of sense because they are also a much closer group of people who quarrel, fight or even support each other when the business is poor. But don't underestimate and think that they are simple competitors to each other. Over the years, they learn to be very resilient to adversity and so they are very street smart as well.

So don't think that hawker business is only got to do with your bowl of noodles or you signature dish. It is actually more interesting than that.

Where to Start Food Hawker stall in Singapore?

It is very important to find the right food stall to start your very own hawker business in Singapore. It implicates your crowd you are feeding and how they will perceive about your business.

However, while all these strategic planning happen, you need to know how to start looking for a stall. The anticipated licence, permits and other essential legislation you need to familiarise with may start to overwhelm you. With this article, I aim to clarify and provide you with a summarised overview.

Through Government Website

A fantastic start is to visit the website from National Environment Agency (NEA) and Enterprise One. It is essential to know the 'rules of the game' before you play or you may running to the field for a losing game.

However, if you find the information too exhaustive or difficult to nagivate, I have summarise it below the options you can choose to start with.

Normal Bidding system by NEA

The first type is to obtain the stall via bidding at the hawkers department. The tender list is usually announced every first day of the month in Straits Times newspaper and in NEA website. If you would like to bid from the tender list, you need to drop by NEA customer service center, second floor building, to purchase the bidding form ($10 per copy per bid). Submit the application form at the same office.

The tender will remain open for 2 weeks before it closes. If your bid is successful, you will need to be patient to wait for about 2-3 months to receive a package that includes the tenancy agreement. But, if your bid is unsuccessful, the money order will be returned to you at the end of the same month.

Market Walk-in scheme by NEA

The second type offered by NEA is the 'Market Walk-in scheme'. This method allows you to confirm the stall within the same month. You also need to drop by the same customer service counter at NEA building to obtain the application form. The application form is free, but there is an administrative fee upon form submission.

The Alternative method

Besides getting a food stall directly from the NEA, you can also consider renting directly from the stall owners or through a property agent. A reliable agent will help you through and coordinate the process, provide a market overview and give you some useful advise as well as the resources you need, especially for novice start-up business. It may not necessary be an expensive way but you can most definitely make a comparison and make a strategic decision for your business.

You can find these opportunites from the newspaper classified ads, online ads. Alternatively, you can physically walk down to your favourite food center areas and look out for 'stalls for rent' signs or equivalent.

Useful reference:
1) Selecting a hawker stall
2) ACE Forum

The three truths about a Singapore Hawker Business

Are you tired of your current job as an employee? Want to be your own boss? Thinking and dreaming of becoming the best food hawker business featured in Singapore?

The first truth is that you must be passionate about it. This is important because without your passion, the immensing number of tasks will work against you and you may end up thinking whether you really in-charge of your own life when you take up this business challenge or you unknowingly become slave to your hawker business.

The second truth is that intensive research and strategic plan is necessary for the food hawker business you are dreaming and thirsting for. With the change in Singapore lifestyle, the quality, hygiene and health aspects on food are becoming more important than the simple business food stall from the past. Thus, it is essential to establish a niche and brand positioning to make your business outstanding.

The third truth is that venturing into food business is hard work. You cannot succeed only by thinking about it and do nothing about it. You need to hold your business with two hands, not just one. You need to work on it with real actions.

If you believe strongly that you are ready to take up the business challenge, I encourage you to take this three truths home and may your dream business come true.