Forum: F&B entrepreneurs should do their sums before receiving grants

Diners at a cafe in Raffles Place. PHOTO: ST FILE

In business, financial prudence comes before product and process. Evidently, more so for food and beverage (F&B) businesses, where one in three F&B outlets is replaced every year and only 60 per cent of these survive their first five years of operation, and where it takes about 30 months to recoup an initial investment, according to Enterprise Singapore. Business failures can be devastating and there are many.

The Singapore Government is uniquely supportive of F&B entrepreneurs. There is a slew of government grants for both restaurateurs and hawkers alike.

However, most, if not all, of the grants are targeted at helping them sustain business rather than first getting them to understand the financial implications of the hyper-competitive F&B business environment (Young F&B entrepreneurs need more support, Dec 13).

While most of them are new to business, young entrepreneurs are passionate and prepared to work hard for their aspirations. Sadly, due to inexperience, they lack the business financial acumen to overcome the rigour of operating and managing their businesses.

F&B profits are marginal and expenses significant. Before putting up a huge investment, entrepreneurs must conduct financial due diligence to ascertain their business viability. The Government should educate them on the financial aspects of starting and operating an F&B business before giving grants. This would help young entrepreneurs to assess the financial risks before committing themselves.

Young entrepreneurs should know that money and aspirations go only so far. They must first get their sums right.

Chow Kok Fai

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A version of this article appeared in the print edition of The Straits Times on December 17, 2019, with the headline Forum: F&B entrepreneurs should do their sums before receiving grants. Subscribe