S$650,000 to start an F&B Business in Singapore
First Published: 2 Jun 2020
Last Updated: 21 Mar 2021
One of the longest standing industry in the retail sector remains to be the Food & Beverages industry – Restaurants at large.
Most locals perceive running a restaurant will provide them with huge earning potential. Little did they know what it really takes to set up a restaurant, the upfront F&B investment needed in Singapore. So let us help put it into perspectives for you here:
Total Investment Cost = S$650,000*
This is the total starting cost to start an F&B business in Singapore. This may seem a lot right now, but let’s dive into each segment and break it down to see why and how we get this figure!
Restaurant Premise
A general rule of thumb states that the rental cost should not exceed 20% (Said by iChef Club SG ) of the overall running costs of the restaurant.
So you may ask, how much are we talking about?
Sub-urban Malls
Current asking rental in sub-urban areas like Punggol, Jurong East, Tampines are hovering between: S$15.00/sqft to a high of S$25.00/sqft.
Average Size of Space
For a typical small scale restaurant of say 10 tables with a seating capacity of 50 pax is roughly between 1,500sqft to 2,500sqft with a technical consideration of kitchen space versus service space.
As shared by FigJam, Kitchen space will take up roughly 40% and service space remaining 60%.
Back to our Restaurant
So for a typical 2,500sqft restaurant, we are talking about:
- S$37,500 rental / month (Based on S$15.000/sqft)
Total Investment on Rental Alone:
- 3 months Security Deposit: S$112,500
- 1 month advance rent: S$37,500
Total amounting to a whopping S$150,000
Bear in mind that the security deposit will be a ‘dead costs” to you as it will be held in custody by the malls for the next 3 years into the lease.
Curious as to how these mall rental rates are calculated? Find out more here!
Design & Build Costs
Most are shock to find out about this cost. One of the highest cost you could imagine.
Working with malls, every design has to be vetted through by their Design & Build team, and not forgetting the 70 pages of fitting out guide that your designer has to read through and comply.
So how scary is this cost? It goes like this:
A market average of S$200/sqft to $250/sqft will get you a decent nice looking design (Includes all submission, engineering costs, etc.)
So if we put it into perspective and based on the same example of a 2,500sqft restaurant space. The design & build cost will be: 2,500sqft x S$200/sqft = S$500,000 (On the lower end of the spectrum)
So this is why the F&B industry is largely conquered by large corporations with deep pockets and huge team behind each brand.
A Whopping S$650,000*
So just Rental costs plus Design & Build will cost you three quarter of your millionaire goal.
*Please note that this cost excludes:
- Branding costs
- Ingredients costs
- Equipment costs
- Manpower costs
- Working capital
- Marketing costs
- Other miscellaneous costs
Interested, Overwhelmed, Want to Understand more?
Want to understand more before you jump into an investment like this?
Let’s chat and provide you with a wider perspective on why others are still investing in such major projects!
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