The adage “If it’s not broken, don’t fix it” doesn’t apply to Bak Kut Teh (meat bone tea) brand Song Fa.
Founded in 1969, Song Fa is entering the digital age by using the latest in disruptive fintech – crowdfunding.
Disruptive technologies, which are technologies that change the way people act and think about things normally, is the current talk of the town.
Uber, which combines GPS and information technologies, changed the way people could be hired as a cab driver by making everything a driver needed available on a smartphone. Thanks to Uber, hailing a cab by the roadside can now be considered inconvenient where it was a norm in the past.
Uber, together with Android Pay and Whatsapp are some examples of how our everyday lives are being changed, and thus “disrupted” by new technologies.
A Welcome Disturbance for Both Parties
Although the funding amount is no headline – only SGD 500,000, Song Fa’s willingness to approach business financing platform New Union for crowdfunding is revolutionary. Having such a reputable company utilise crowdfunding will lend more legitimacy to this new fintech, which is popular amongst SMEs.
A household name, Song Fa’s involvement will definitely turn the heads of laymen who might not otherwise be bothered to understand what crowdfunding really entails.
Song Fa’s intention for obtaining funds is equally game-changing:
“The funding will also enable us to leverage on technology to upgrade our supply chain IT all the way from procurement to point of sales. This will upgrade our productivity and build the business to optimal efficiency,” said Yeo Hart Pong, the Managing Director of Song Fa and second-generation owner.
New Union uses an investment model that allows them to link small investors to companies looking for funding. Through the internet, crowdfunders like you and me and invest small amounts of money (even a few hundred dollars is fine) toward the fundseeker’s goal.
Once the goal is reached, the funds are disbursed to the fundseeker, and investors can expect to earn the stated amount of interest on their investment. Earning back your investment is of course where the risk is, and New Union explicitly advises investors to check on the projects they are funding to avoid defaults.
Crowdfunding has much less barriers than banks, and New Union even boasts that their processing can be “as fast as one week”. Think of New Union as a third-party website which connects many small investors to companies – you can read more here if you want to see how crowdfunding matches up against banks.
Song Fa looks to be moving forward with the times by incorporating technology to enhance their business. Old businesses can only stand to benefit by learning new tricks, and Song Fa’s example is a great one to follow.
A New Tradition With Tech
The relatively traditional Song Fa is already using tablets to order food thanks to Yeo’s push for technological integration. As the eldest son in his family, his father asked him to take over his Bak Kut Teh business after he graduated from university.
Yeo was met with resistance from his father at first when he tried to implement such systems for Song Fa. “[My father] had a very traditional way of managing the business and I wanted to change it,” Yeo told New Union.
“For instance, I purchased new technological systems to facilitate in the ordering of food and payment method … [but] he still continued to collect payment and take orders his traditional way”
Eventually, his father saw the benefits of technology and accepted Yeo’s ideas. Tradition or not, entrepreneurship is often about improvement, and that means change.
Successful entrepreneurs are those who adapt to the times, and Song Fa is definitely changing for the best.
For Yeo’s dad, he stood out thanks to the unique flavour of his Bak Kut Teh. For Yeo, it will be the technology behind his business that will decide whether his brand can spread to Asia and beyond.