'Incredibly difficult to run F&B stores in SG': AMACHA owner says he spent S$209K just to get business started
SINGAPORE: A social media video from a tea shop owner has received a lot of attention, with Instagram users commenting on the high start-up cost that was mentioned.
Sebastian Ang, who started AMACHA, the first Traditional Chinese Medicine (TCM)-inspired herbal milk tea brand in Singapore, said that he spends a substantial amount of S$209,000 just to open one store.
Rent alone sets him back S$60,000, as he needs to pay four months’ worth at the onset; renovation is at S$15,000; flooring and walls cost another S$20,000. He then had to shell out another S$50,000 for electrical works, plumbing, ceiling works, and air-conditioning, and then S$40,000 for necessary equipment, including tea-making and gelato machines and fridges. Others, such as the POS system and display TVs, cost S$9,000.
Lastly came the ingredients, packaging, staff salary, insurance, utility deposits, and everything else needed for the opening, costing another S$15,000.
“So before we even sold our first cup, we had already spent S$209,000. And that’s just enough to get the doors open. And after that, you still need to have enough running capital to keep the business going,” said Mr Ang, a serial entrepreneur who also founded Mama Diam, Lou Shang, and Synthesis.
In the caption to his post, Mr Ang admitted that the high costs had been something he had underestimated when he first got into the food and beverage industry.
“Hopefully our numbers give you a better idea of what it actually takes to open an F&B store in Singapore,” he wrote.
What Singaporeans are saying
A commenter on Mr Ang’s post thanked him for being so open.
“Thank you for your transparency… it’s incredibly difficult to run f&b stores in SG, but am here for the amacha!!! Esp in Chinatown,” one wrote.
When another wrote, “Rental is really killing most businesses here in SG!”, Mr Ang said it’s one of their highest costs.
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He added, however, that “as business owners, it’s also on us to do our due diligence, make the right projections and decide whether the numbers make sense before signing the lease.”
“F&B start-up costs are always a killer. It takes a certain type of courage to build one of these,” wrote another commenter.
“Interesting to learn how much $ goes into simply starting a business, and we are not even calculating other stuff like time invested to do research, licenses, etc,” noted an Instagram user.
Another wrote, “If you have $210k upfront, you are better off investing.” /TISG