It’s not easy being a restaurateur.
With rental rates taking away large chunks of one’s profits, and the mishandling of social media accounts causing one to potentially lose customers, the depressing statistic that 40% of F&B businesses don’t survive past 5 years of operation isn’t surprising at all.
And even among the 60% that do survive, the industry is still wrought with various pain points.
From inefficiencies that come with scaling up, to administrative work that takes up more time and effort than necessary, it’s often operational issues that kills a business before a negative review can.
But not all hope’s lost, though.
For example, in our previous article, we talked about solutions from foodtech startups that could help make running an F&B business a little bit easier.
We also talked about DBS BusinessClass’ flagship event, Disrupt @ The Bay, which caters to F&B business owners who wish to learn more about the latest trends and technology relevant to the sector.
We had the opportunity to attend the event last week (albeit not being restaurateurs ourselves); and via speaker sessions and panel discussions, we learnt more about how the traditionally ‘offline’ F&B industry can greatly benefit from these relatively ‘online’ solutions.
As impressive as these solutions were, what did F&B entrepreneur attendees actually think about them? Are they a saving grace, or white elephants that will end up eating away even more profits?
To find out, we talked to 4 of them about the challenges they were facing, and if there were any tech solutions that they are hoping to integrate into their businesses.
Jin, Managing Director of Coalesce
Give me a quick description of your business, and what you’re doing!
We are running a cosmopolitan fusion restaurant, Coalesce, at NTU@One North Alumni House. We’ll be using Singaporean flavours as the base of our dishes, and adding some international flair and ingredients to them.
Essentially, we’re serving you the world on your plate.
What are some of the challenges you’ve faced as a F&B entrepreneur?
I think across the board; the challenges are typically the same for all business. This is especially in terms of manpower and getting more of the market share, because I think the F&B industry is actually very saturated in Singapore.
When I was running my previous venture, Pitchstop Cafe at NTU, there weren’t many competitors, but past that, there are a lot of choices available once you go out of a particular venue. The prices become important, the type of menu that we serve is important; and there’s still the marketing and the quality of food to think about.
These days, with the rise of e-commerce, most of the shops in shopping centres are also looking into F&B, and with the rising rental, you’ll get cut off very quickly if you’re a weak performer.
Another problem is the reliance on manpower, because skilled manpower is hard to find. Not many people want to work in this line.
What are some of the solutions you saw today that you want to try out?
Perhaps solutions like Tabsquare and EzyPOS…these guys can definitely help to reduce manpower. But for us, the former is probably more applicable because we’re looking to become a full-service restaurant. We will definitely look into the integration of these into our existing POS system, and we’re going to meet them some time later on.
And in terms of backend solutions, I think there are a lot of cost factors and requirements from MOM, so a lot of the things that typical companies have – for example HR, accounting, are outsourced. So we might also do that eventually.
Any advice to fellow entrepreneurs?
Planning is important. Planning in the sense that you foresee future problems so you can avoid them, implementing solutions early on so you can have a cumulative effect, and therefore make the business more smooth-sailing.
Justin Ong, Co-Founder of Le Poulet
Give me a quick description of your business, and what you’re doing!
Le Poulet is a small rotisserie bar – about 60 to 70 seats – and we’re located in Shenzhen.
It’s a new emerging market, and there are a lot of new Singapore businesses opening there as well, so we see it as a very good opportunity.
So that’s why I launched it over there about a year and a half ago.
What are some of the challenges you’ve faced as a F&B entrepreneur?
I think there are some similarities in doing F&B between China and Singapore – it’s manpower.
During the talks, they mentioned that manpower is a key issue. In terms of hiring, it’s not so much a problem for a business in Shenzhen, but in terms of skills, flexibility, and the consistency of labour – this is a challenge that myself, and other F&B businesses face because it’s very manpower intensive.
What are some of the solutions you saw today that you want to try out?
A couple of things that they mentioned was how a couple of the tech firms are helping to improve the processes, as well as trying to make work easier by cutting down the reliance on manpower, which is a very big help.
I think it’s safe to say that throughout the F&B industry around the globe, this is something that would be very helpful.
There’s a high possibility of engaging in some of the solutions, but I’m also looking into the costs involved.
I’m looking at the grants that could help in implementing such technology, because as they mentioned, the margins for food and beverage are very, very tight, haha! So I think that without the grants, it’s very unlikely and highly impossible for the new tech-enablers to help out in our industry.
Any advice to fellow entrepreneurs?
I’d say it’s a lot of hard work, and a lot of people got it good because they have the passion for it. So stick to it, be strong. I see it as fulfilling work – beyond the profit margins.
If you love it, work hard for it.
Grégoire Liao, Singapore Director of Smöoy
Give me a quick description of your business, and what you’re doing!
I’m bringing this Spanish brand, Smöoy, into Singapore, and we’re doing frozen yogurt.
I know that we’re up against a few players here, but the culture of frozen yogurt and dessert is pretty big here, so I think that there’s definitely space for another player in Singapore.
What are some of the challenges you’ve faced as a F&B entrepreneur?
Currently, I’m facing a lot of competition, and rentals are really high.
Everyone’s saying that staffing is challenging here, and I agree. It’s tough to find staff that are dedicated and can provide good service.
I guess it’s partly due to the location, because here, all the kids are so focused on their studies, so you need to be the best at everything. And when you’re educated that way, you don’t really want to be a server.
And it’s also due to the quota that companies have when it comes to hiring Singaporean workers, so the talent pool is realy quite limited.
What are some of the solutions you saw today that you want to try out?
The solutions I saw were quite large scale for a small company like myself…but something I found interesting was perhaps FoodRazor? It looks interesting, but when I asked for the price, it was quite expensive so…I’m not sure.
But certainly the part of the talks when they discuss digital marketing – that part was very interesting. I think that these days, it’s a must for any, and every company to use it to reach out to younger consumers.
I mean, our targets are kids, families, and teenagers, and those people are all on social media. Therefore, businessmen and entrepreneurs need to change the way that they run things, and reach out to these people.
And I guess it’s not easy for everyone to do it the right way. Everyone can set up a Facebook account, Twitter, or Instagram. But to run it efficiently, I’m guessing that you’re going to need some professionals to do it. To give content, to manage the accounts.
Any advice to fellow entrepreneurs?
I wouldn’t dare, I’m so new! But I guess the advice I’d give to a new entrepreneur like myself is to get help. It’s about getting the right people to help you, because on the road you’ll meet a lot of people who want to take advantage of you, and are just interested in your money.
And I think one of the things I remember from the panel that was very interesting was to be aware of your surroundings and your competition. Know what they’re doing right, know what they’re doing wrong.
Also remember that things that have worked in the past, may not work today or tomorrow.
Vivien Liem & Daren Oliveiro, Founders of Butternut
Give me a quick description of your business, and what you’re doing!
We are from Butternut! Our first outlet is actually a hawker stall, and we started with the plan to have a homegrown type of F&B brand. We wanted to come here to see what solutions they have – especially SPRING – so it can help us to grow faster.
We serve fusion-Western food, and we deal with thin crust pizzas, salads and bar snacks. We’re still at an infancy stage, and we’re still trying to find out identity in the sense of what really works well out there?
But because we’re small, so we’re able to do a lot of R&D on our own.
What are some of the challenges you’ve faced as a F&B entrepreneur?
We don’t have the funds to say “Ok, let’s plant ourselves in Orchard Road”. Then again, we don’t want to be there either, haha!
But I think unconsciously, we actually stumbled across an advantage being a hawker store. We bid as a Halal store, and the rental was lower because the competition isn’t high – so unknowingly, we got to know about this perk that we had.
We engage in foodpanda, Oddle, and we tap on Facebook, and run campaigns as well. But given that we’re starting small, we have some financial budgets, so we came here to see how we could further tap on the grants.
Currently, we’re also looking to improve our productivity. Like right now, Daren is rolling his pizza dough by hand and it’s entirely made from scratch. We’re trying to see if SPRING can help us with rollers and machines, but looking at our floor space, it’s also very small.
We hope in time, we can open a central kitchen though, because that would allow us to branch into catering for company and small events.
What are some of the solutions you saw today that you want to try out?
Definitely the online marketing tips. Right now, it’s more done organically – like through word-of-mouth, or people walking past our store.
We’re also looking at self-payment and self-ordering solutions, but I think that won’t come in until we have more outlets.
Any advice to fellow entrepreneurs?
Starting small, you need to have a very clear vision, and you must guard it because along the way, people around you, and even you yourself will attack that vision. You need to learn how to pick yourself up.
But always remember to find some time to daydream and think about what will happen if things really work out.
It’s very important to make the best of what you have – your manpower, your hardware, your software. It’s not about seeing what’s bad about something that you have, it’s about seeing what’s good, and how to help it or them grow.
Manpower, Marketing, And Money
According to the responses that we got, manpower and marketing seem to be the most commonly cited challenges.
Manpower, because getting skilled and dedicated workers are tricky; and marketing, because while anyone can create accounts on social media platforms, making them work for the business is another issue altogether.
While there are an increasing number of solutions to solve these issues, for example, a robotic arm that can help in menial tasks, and social media agencies that can create the perfect campaign, the entrepreneurs also revealed one main obstacle – the lack of a war chest of funds.
This is where events like Disrupt @ The Bay, and DBS BusinessClass’ SME Academy courses come in.
From courses on digital marketing tips to optimising one’s working capital, the latter, just like Disrupt, is free for interested parties to attend, and will help them learn to be more efficient, tech-savvy, and smarter in running the business.
But if the protips still aren’t enough, DBS SME Banking also provides loans for the times when an extra boost in capital is needed to adopt new technologies.
As mentioned by the interviewees, maximising their limited capital is always something at the back of their minds, and getting a loan won’t just ease some of the financial pressures that come with day-to-day operations, but also give them the space to try out new solutions.
The increasingly competitive F&B climate isn’t for the faint of heart, but if entrepreneurs are nimble enough to leverage on these events, courses, and loans, the fear of not surviving another day will be the least of their worries.
Find out more about DBS’ SME solutions here.
This article was written in collaboration with DBS BusinessClass.
