Singapore is a food paradise, and ramen is one of the most popular dishes here. Ramen is a delicious, hearty dish that originated in Japan. If you're thinking of opening a Ramen restaurant in Singapore, here are 11 tips to help you succeed.
#1: Write a solid business plan
There are many reasons why you should write a business plan to start a Japanese restaurant in Singapore. A business plan is a roadmap that helps you to navigate the early stages of starting a business. It forces you to think through the various aspects of your business, from your concept and target market to your financials and operating costs.
This plan will also help you to secure funding for your restaurant. Many investors and lenders will want to see a well-crafted business plan before they commit to funding your business. And lastly, a business plan can serve as a valuable tool for managing your restaurant once it is up and running.
#2. Plan the menu
First, you will need to create a menu that offers a variety of different Ramen dishes. Be sure to include both traditional and modern dishes to appeal to a wide range of customers.
For traditional dishes, you can offer classic flavors like:
Shoyu Ramen: This type of ramen is made with soy sauce, which gives it a salty and savory flavor.
Miso Ramen: This type of ramen is made with miso, (fermented soybean paste) which gives it a rich and umami flavor.
Shio Ramen: This type of ramen is made with salt, which gives it a light and refreshing flavor.
Tonkotsu Ramen: This type of ramen is made with pork broth, which gives it a rich and hearty flavor.
For modern dishes, you can get creative and offer unique flavors like truffle, pumpkin, and curry. Here are a few unique and modern takes on the classic ramen:
Ramen carbonara: This dish combines the classic flavors of ramen with the rich taste of carbonara. The noodles are cooked in a carbonara sauce made with bacon, eggs, and cheese.
Spicy miso ramen: This dish is made with a spicy miso paste that gives it a kick of flavor. The noodles are cooked in a broth made with chicken, pork, or beef, and the soup is topped with a variety of vegetables.
Ramen noodle salad: This noodle dish is a refreshing and healthy alternative to the classic ramen soup. The noodles are cooked in a broth made with chicken, pork, or beef, and the soup is topped with a variety of vegetables.
Vegetarian ramen: This dish is perfect for those who want a hearty and filling meal without meat. The noodles are cooked in a vegetable broth, and the soup is topped with a variety of vegetables.
Mazesoba ramen: A unique, dry ramen dish that is slightly different than regular ramen
Natsuttei: While it has tonkotsu broth, the roasted garlic oil (black ma-yu) adds a delicious flavor to this version of ramen.
You can experiment with different toppings, such as pork, chicken, eggs, seaweed, vegetables, and flavors to entice your prospects.
Do not forget to also offer sides like rice and gyoza (dumplings). And of course, you will need to have a selection of beverages to wash it all down.
With a well-rounded menu, you'll be sure to please everyone who comes to your restaurant.
#3: Find the right location
Next, you will need to find a location for your restaurant. Here, a number of factors will need to be considered including:
Location and footfall – Ideally, your restaurant should be in a busy area with a lot of foot traffic.
The local competition - If there are already well-established restaurants there, you may find it challenging to build your ramen restaurant.
Costs, revenue, and profits - Is there space to grow your business in the near future?
Square footage - Most experts agree that 1,200 square feet are the minimum requirement for a restaurant.
Car parking facilities – This may not play a major role if the restaurant is close to rail terminals.
Condition of the restaurant – You will need to evaluate the existing furniture, equipment, kitchen, and decor.
Remember that the location will also influence the funding you will need.
You can also explore strata malls (these are malls where tenants are not managed by central management). Strats malls such as Queensway shopping center have lower rental rates that can range from S$5.29 to S$9.33 compared to commercial malls where rentals go up to S$24.77.
#4: Estimate the funding you will need
One of the most important steps to starting a restaurant in Singapore is to estimate how much funding you need to get started. This can be a tricky question to answer, as there are many factors to consider. But with a little bit of planning and research, you can come up with a pretty good estimate.
There are a few key costs to consider when starting a restaurant in Singapore:
Rent: Commercial rental prices in Singapore can be very expensive, especially in popular areas like Orchard Road or Marina Bay. You will need to factor in the cost of rent when estimating your start-up funding. For instance, rental prices in the Core Central Region range between $12 and $18 per square foot. In the RCR (Rest of Central Region), the rental cost per square foot varies between $10 to $12 while the OCR (Outside of Central Region) has the lowest rental cost at $6.
Equipment: From commercial-grade kitchen appliances to dining furniture, factor in the cost of all the necessary equipment for your restaurant.
Licensing and permits: Before you can start operating your restaurant, you have to apply for the relevant licenses and permits from the authorities. This includes a Food Shop License costing you S$195 per annum. F&B entrepreneurs in Singapore also need food handling licenses and employee permits. Food handlers have to take up the food hygiene course that costs S$21.40 per person. If you plan to serve alcohol, a liquor license will also be needed the cost of which ranges from S$520 to $1600.
Renovations: Bare units will significantly increase your costs. Although a takeover unit may have some basic equipment in place such as flooring, exhaust, electrical, and carpentry, depending on their condition, you may have to replace most of them.
Marketing and advertising: Account for the cost of marketing and advertising your restaurant to potential customers.
Staff salaries: The cost of hiring staff for your restaurant, including chefs, waiters, and other support staff is significant. According to PayScale, here are the average salaries of restaurant staff:
Restaurant Manager - S$22k - S$85k
Sous Chef - S$32k - S$41k
Chef de Partie - S$3k - S$34k
Head Chef - S$37k - S$93k
Restaurant Supervisor - S$31k - S$36k
Typically, staff salaries account for about 29% of monthly recurring expenses.
While it is difficult to give an accurate estimation, you may need anywhere from S$50,000 to over S$600,000 depending on various factors including the size and location of your ramen restaurant.
#4: Explore funding options
There are many types of funding available for restaurant businesses in Singapore. The most common type of funding is through government grants, which can be used for various purposes such as expanding your restaurant, hiring new staff, or improving your premises.
Other types of funding include loans from banks or financial institutions, crowdfunding, investments from venture capitalists, or even crowdfunding. Each type of funding has its own advantages and disadvantages, so it is important to choose the right one for your restaurant business.
Here are some specific types of funding available for businesses in the food and beverages sector:
Equipment financing is one of the types of business loans you can get in Singapore to purchase equipment such as stoves and large freezers.
Most financial institutions and banks offer up to 90 percent of the equipment's value. The purchased equipment is the collateral for this type of secured loan.
Equipment financing can help you finance the purchase of new or used equipment. It can be used for a variety of purposes, such as expanding your business, upgrading your equipment, or even buying new vehicles.
This type of financing is available from a variety of sources, including banks, leasing companies, and online lenders. If you are considering equipment financing, it's important to compare different options to find the best one for your business.
A business line of credit
A business line of credit is a type of financing that allows businesses to borrow money up to a certain limit. This credit can be used for a variety of purposes, such as funding inventory, paying for marketing expenses, or covering operational costs. Lines of credit typically have lower interest rates than other types of business loans, making them a popular choice for small businesses.
It is a revolving credit facility that gives businesses the flexibility to borrow and repay funds as and when they need it.
There are many benefits of using a business line of credit, including the:
Flexibility to use it as and when you need it,
The ability to repay and reborrow funds,
And the relatively low-interest rates.
Productivity Solution Grant
The government offers this grant that provides 70 percent (80 for F&B and retail business until 2023) of financing for businesses in the food and beverages sector that:
Are registered in Singapore
Hold 30 percent local share
Have less than 200 employees or less than S$100 million in revenue
Are using the funding to purchase technology solutions such as procurement software, point of sale (POS system) software, and solutions that automate payroll information.
Angel investment networks
Angel investment networks are groups of accredited investors who pool their money to invest in early-stage companies. These networks provide a valuable source of capital for startup companies and can also offer valuable mentorship and advice.
There are a number of different angel investment networks in operation, each with its own focus and criteria for investment. Some of these include:
BANSEA (Business Angel Network South East Asia) - Its aim is to promote the network by organizing workshops and conferences to facilitate investment opportunities. The network welcomes entrepreneurs with a good business idea in need of funding to get started.
BAS (Business Angel Scheme) - Supervised by Springs Seeds, BAS is an equity investment scheme for businesses in Singapore. It partners with angel investment groups to facilitate funding for startups. For every dollar of the startup's investment, Springs Seeds matches with a dollar.
SGAN (Singapore Angel Network) - This group invests in startups across industries.
#5. Incorporation of Company
You should incorporate your company in Singapore to be a Japanese restaurant owner.
Incorporating a company in Singapore is a simple process that can be completed online. The first step is to choose a company name and register it with the Accounting and Corporate Regulatory Authority (ACRA). Once the name is registered, you will need to prepare the company's Articles of Association and submit them to ACRA.
After the Articles of Association are approved, you will need to pay the incorporation fee and submit the company's Memorandum and Articles of Association to the Registrar of Companies. Once the company is registered, you will need to obtain a Business Profile from ACRA.
However, it is important to seek professional advice to ensure that everything is done correctly.
#6. Renovate and refurbish
If you are buying a takeover unit, you will need to hire an interior designer to renovate the space. A thumb rule you can stick to is not to spend over S$100 on renovation per square foot for the dining area.
This means a 1,200 square foot seating area should not need more than S$120,000 for renovation.
Kitchen renovations can cost anywhere from S$30,000 to S$60,000 and more, depending on the types of utensils and equipment you need. This is why planning your menu down to the last detail is important. Based on what you have decided to offer, you may need to plan for baking utilities, saute station, or a meat smoker that can cost more than a gas stove.
#7. Buy kitchen equipment
There are many places to buy kitchen equipment for restaurants in Singapore. However, it is important to buy from a reputable supplier in order to get good quality products. Here are a few places to buy kitchen equipment for restaurants in Singapore:
TopChef: Apart from a wide range of kitchen equipment, TopChef offers design and installation services.
Simplex: This is a company that specializes in selling commercial kitchen equipment.
Lau Choy Seng and Sia Huat: These companies offer a discount on kitchen equipment for chefs and restauranteurs,
#8. Hire staff
Hiring staff for a restaurant in Singapore can be a challenging task. There are many things to consider, from the type of restaurant you are running to the specific skills and experience you need from your staff.
First, you will need to decide what type of restaurant you are running. Are you a casual dining spot or a more formal establishment? This will help you narrow down the type of staff you are looking for.
Next, you will need to consider the specific skills and experience you need from your staff. Since you are running a ramen restaurant, you will need staff who have experience making ramen.
Staff hired for your ramen restaurant need to get food hygiene certifications given out by the Singapore Food Agency (SFA). SFA conducts regular inspections to make sure food is prepared in line with the specific hygiene requirements.
If you are hiring foreign staff, it's mandatory to obtain work permits for them by applying to the MOM (Ministry of Manpower).
Once you hire the staff, you have to register both with the CPF (Central Provident Fund) and the IRAS (the Inland Revenue Authority of Singapore). CPF registration is to report the CPF contributions while you need to declare your staff's income to the IRAs for income tax purposes.
#9: Invest in marketing
Building and sustaining a restaurant that offers authentic ramen involves an ongoing investment in marketing.
As the restaurant industry continues to grow, it's more important than ever to make sure your restaurant is well-marketed. A strong online presence is essential in today's digital world, and you'll need to make sure your marketing efforts are targeting the right audience.
POS (point of sales system) integrated loyalty programs are becoming a popular way for businesses to increase customer loyalty and repeat business. This loyalty program is one that is linked to a business's point-of-sale system and allows businesses to track customer spending and identify their best customers.
While not every point of sale system is created equal, look for systems that come with a feedback option where you can ask your customers what type of rewards they would like. A good POS integrated loyalty program should also allow you to customise your rewards in a specific outlet or a global loyalty program across all outlets.
If you're not sure where to start, there are plenty of resources available to help you get started. There are also numerous marketing agencies that specialize in the restaurant industry and can help you create a customized marketing plan for your business.
#10: Hire a F&B consultant
An F&B consultant can be a valuable asset to your new ramen restaurant business. A good consultant will have extensive knowledge of the food and beverage industry, and they can help you make informed decisions about your business. They can also provide valuable insights and recommendations that you may not have considered.
If you're thinking about hiring an F&B consultant, be sure to do your research and find someone who has the experience and expertise you need.
#11: Engage a reliable Accountancy firm
The accountant can be very helpful for your business not just by taking care of your book but to ensure you stay compliant on the regulatory side. GST registration is a must for F&b business as most of the suppliers you purchase your ingredients from will be charging you GST 7%. And this cost will erode your profit margin if you do not pass it down to your customers.
You can rely on a POS system that is integrated with an accounting system such as XERO so that when the sales receipts can automatically synchronize to the XERO accounting software every day when you have closed the shift in your POS system.
Choose the accountant who is genuinely willing to help and not engage the "middleman" accountancy firms that will take your job and sub-contract to another accountancy firm. So that you can avoid paying a high fee for inferior accounting services.
Some accountant firms will also provide you with financial advice with some fees. You can consider taking up the add-on services since they are already taking care of your book.