Advice For A Cafe Entrepreneur-Wannabe

Here’s an email I received yesterday from a reader:

“My name is Jowel. I am a 30-year old Singaporean lady who has an idea to start up a small-sized – capacity of 40 pax – western cafe in Singapore. I am currently doing research and development on the food menu, and looking for a suitable location at the same time. Also, (I’m) looking for interested investor(s) for the business.
I lack experience as this will be a new start-up for me. I hope to engage with a mentor in the same industry who will be able to advise me. I came across your website and would like to try my luck if you would have any advice or referrals for me?”

Hi Jowel,

First of all let me congratulate you on starting on your entrepreneurial journey! It’s not going to be easy, but with some planning and plenty of passion I’m sure you’ll succeed in this venture.

I’m no expert in F&B businesses, but here’re some of my thoughts:

1. Concept – Even before you consider your menu, you should be looking at creating an incredible concept that will attract and keep customers. Western cafes in Singapore are a dime to a dozen – what is it that will set you apart from the rest? How will it keep people talking about you? Here’s a great BusinessWeek article about how important a restaurant’s concept is. With a great concept, your menu will naturally fall into place.

2. Location, location –  It’s a well-used adage, but location is critical.  Prime locations with high traffic may seem attractive, but the astronomical rentals demanded in these places can make (or mostly break) businesses. So my view is actually different when it comes to F&B businesses – my personal feel is that if get your concept right, Singaporeans will travel to dine at your cafe. I know of many who drive all the way to Jalan Kayu for roti prata, and even to Malacca just for chicken rice balls.

3. Investors – Money talks, and failure walks. I hate to break it to you, but most investors do not invest in F&B businesses as they are extremely capital intensive and hard to scale. You may want to read my previous post on raising funds – but in short, your best bet is friends and family. If you do find an outside investor, make sure that your goals are aligned and that they can value add to your business in other ways as well (such as providing advice or access to the right network of contacts).

4. Mentors – Likewise, it’s really important to find the right mentors who can guide you. Ideally, it’ll be someone who has experience in starting a similar business (it doesn’t have to be exactly the same kind). They should be able to poke holes in your business plan and bring you another perspective. Unless they are entrepreneurs, avoid having your parents as advisors! They may mean well, but will probably complicate matters.

5.  Publicity and Marketing – Many food businesses start out well, but tend to flounder after a few months when the initial hype fades. That’s when they start to panic and spend heaps of money in a marketing blitz, usually too little and too late. Your cafe’s business plan should cover marketing strategy and you should be looking at generating some publicity from the get-go! For example, The Sweet Stone Parad’Ice not only has a great concept, but they had incredible awareness and even a FaceBook group!

I hope the above advice helps – I have some contacts that I can share with you via email.

Anybody who wants to help Jowel out can email her at jowelfoo at yahoo dot com dot sg.