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Setting up a cafe/restaurant

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  • Setting up a cafe/restaurant

    I've thought of setting up my own cafe with cozy ambience, which serves nice western food, pasties,desserts, and of coze those little chinese dim sums which my mom made . I love animals...and also thought of turning it into a doggie friendly place. However I would only like to serve human food.
    Is it advisable?

    Currently I'm in the middle of saving up for my capital and searching for a gd location, while taking my part-time business degree.
    Any successful owners in the F&B industry?
    Any advices,tips or ideas to share?
    Last edited by NiteyLychee; 30-10-2005, 09:29 PM.

  • #2
    no experience in starting up restaurants myself, but i have been talking to lotsa f&b management people these days.

    i just had lunch with Thai Express CEO Ivan Lee months ago and weeks ago I just met up with Thai Village MD Mr Lee Tong Soon. The former shared his experience with us on his initial set up on restaurants. He started out a cafe before but failed.

    Both guys shared the same sentiments on the issue that, rental is a killer. You need to know ur target audience well and ur operating expenses. Lotsa restaurants in HK, for example, you can see that they have full house all the time, but they are earning little, because the rental is too high.

    the idea may be wonderful, but might not be feasible on ur cost factor. do very negative forecasts of ur p&l statement before u decide to start on anything. n fix ur rental component. for example, determine that u can only afford up to 40% of ur operating expenses on ur rental, and so there it goes. do not compromise on changing the percentage after u have decided it.

    furthermore, in f&b, other than rental, the second critical cost is ur raw materials cost, cos u're f&b, ur food plays a very important part.

    it's all abt trial and error when u start a business. luck plays an important part as well.

    so, good luck!


    • #3
      I find that it is so difficult to start a biz and mostly rental is a killer. even in places like bugis junction, the rental is already $3k minimum? suntec is $5k minimum. for pple who want to start up something must really have commodity that pple are willing to pay to buy. i notice that it will be better to start up expensive/premium goods shop as the margin is higher.. if you set up a mid price goods shop, pple perception of the item is that they can ask for disct..or local brand not as attractive/sellable as foreign brand..


      • #4
        3 to 5k rental in premium places is more like for a cart space or a single food court kitchen space. when u're talking abt a restaurant space, it'll cost more. furthermore u'll face restrictions with the facilities management of the building with regards to bringing animals into the restaurant.

        anyway i suggest the restaurant to be out of high traffic areas like orchard or bugis, cos ur concept attracts those richies who have lotsa spare leisure time and loves dogs. so places like river valley road, near great world city will attract more crowd. cos there're lotsa condos around the area.


        • #5
          If you have to save up for capital, then think hard about whether you want to blow your hardearned money on a dream that may not be feasible. I closed shop at FEP a couple months ago with a fashion business. It just didn't work out. The rental is the killer. For proper restaurants the startup will be anything in the magnitude of 100K and up. No less. The fittings have to comply with the ministry regulations and all equipment has to be inspected. Even I spent alot of money even though my renovations and fittings were scant, and nowhere as posh as most of the cafes you see out there. Pacific Coffee at City Link closed a few months ago. It had good business, but rental was just too high to cover costs. The location is the key, but even if there is guaranteed business, the costs may be far too high to do it like the above cotters said. Most of the time new business owners will tend to opt for cheaper locations with fewer crowds.


          • #6
            Think along Settlers (sp?) Cafe side, cheap location and targetting at a niche market (board game players).

            My father co-owns a Japanese restaurant business with his good friend. It's located near some estates in Bukit Timah and targets at people living nearby. Business has been slow and took some time to pick up and then it went stagnant again. The rent is killer and it's a very big risk to take because there are cheaper restaurants serving different cuisines along the same stretch. Now they see a few regulars here and there. Most of the times, diners are just working adults packing home and so on.