Image Credits: Walter Lim via Flickr
Starting a business in Singapore cannot only be expensive but also difficult. As Albert Kong, CEO and chairman of Asiawide Franchise Consultants that advised 650 franchise clients in Asia, once said: “Starting a business in Singapore is much tougher than other countries in the region especially when it comes to dealing with landlords and managing employees.”
1. SAVE LOADS OF MONEY FOR FUTURE EXPENSES
You must save for the franchise fee, renovation of the space, rent requirements, raw materials, and employee salary. Regardless of whether you are making a huge profit or not, the franchisor will request a share in your revenues.
For example, the franchise fee for a cafe is about S$50, 000 for a 3-year contract. The renovation costs may hit about S$100, 000 for only a 600 sq ft place. The rent of this 600 sq ft place costs about S$7, 000 a month. Additionally, the raw materials and employee salary for the first few months costs an extra S$100, 000. These costs heavily depend on your franchisor and landlord.
2. EMPLOYEE EXPENSES ENTAILS HIGH COSTS
Employees in Singapore are among the highest paid workers in the world. Not to mention, as an employer, you will have to contribute a given amount to the Central Provident Fund (CPF). Employees can leave you whenever they want and because of it, you will have to spend more resources to hire and train again. To avoid this, layout a 1-month waiver for employees that want to resign.
3. FAMOUS BRANDS ARE THE SAFEST
A household name such as 7-Eleven is your safest bet if you are franchising for the first time. First, the landlord will be more lenient to you as they know the “required look” of the establishment. Second, consumers tend to buy brands that they are most familiar with. In Singapore, the famous F&B franchises are Subway and Ya Kun Kaya Toast.
4. FOLLOW YOUR PASSION
Follow your passion so you do not feel the stress of costs too much especially during the first few months. If you are motivated by your happiness then, you are more likely to succeed in what you do. Furthermore, you may consider franchising a unique business with a popular brand to avoid the competition.
5. BUILD GOOD BUSINESS RELATIONSHIPS
It pays to have a good business relationship that is open and honest with the suppliers and the landlord so that if disagreement and troubles arise, you can settle it out in a friendly manner.
Image Credits: 드림포유
via Flickr
Sources: Business Insider Singapore
