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.

I received an email from a reader yesterday asking for some advice. I thought the answer may be applicable to some of you and so got her permission to post it here:

“I was doing some research about starting my own business (however this may not happen for a few years as I lack capital and confidence) and I was wondering if there were any other sites that would provide for similar reading. (I have an idea for a business) and wish I could afford to do so now. Your article on Books Actually helped me alot and I think I might contact them to see how they developed their concept and took the step to do so. I know as any entreprenneur you must not be afraid of failure, but being a fresh (graduate) I fear that I lack the experience or technical know-how to operate my own shop. Do you suggest that I work etc for awhile so as to get a better taste?”

Hi there,

There’s really 2 parts to your question, which I am going to break down into:

1. Do I need financial resources to start a business?
2. Do I need working experience and relevant skills before starting my own business?

The answer to the first, unfortunately, is yes. Working capital is always needed for any business, even a startup. My opinion is that there’s really little chance you can bootstrap a business too much (especially in Singapore), even by having extremely low or no overheads. You’ll always need capital to start your business, and more importantly, grow it. This requires money.

The more relevant question is where can you seek the money you need to start your business – my friend and venture capitalist guy Jeffrey Paine has some advice on this. Some work first to save up for their idea, but this will take a very long time and you may get jaded along the way. Or doubt could creep in, like it did to me.

If your idea has lower startup costs (applicable for certain fields and industries), then you could just do it – if it fails you can always close up shop and work for someone instead. The good news is that many companies – at least the forward-looking ones – appreciate the experience of those who have launched their own startups or worked in a startup environment.

For the second question, working experience is not really critical for business success. If you lack technical know-how or business skills, there are ways to mitigate risk. One way is to read up on those areas you feel you lack knowledge in – go read some great books from the library (for example, Guy Kawasaki’s The Art of the Start). Another method – which I highly recommend – is to find yourself a mentor who has been through a similar path and can share their experience with you as you go along.

But if you feel that you’re more comfortable with some experience under your belt before venturing out, then my advice is to really find a job most closely related to what you plan to do in the future – even if it means working for lower pay. For example, if you plan to start a bookshop, consider working for Borders so you understand about inventory management, logistics and payment systems. On the other hand if you want to start a cafe, try your hand as a barista in Starbucks – you’ll not only learn how to make great coffee but also understand how to deliver great customer service.

There really is no right or wrong answer, but I hope this advice helps.