Project Dignity 2009

Doing Business in China and South East Asia

Project Dignity
Detailed Analysis: food and beverage industry Singapore.

The F&B industry plays a vital role in Singapores economy. Singapore has been ranked alongside Hong Kong and Australia as one of the three major eating capitals in the Asia Pacific region. Singaporeans enormous appetite for eating out has given rise to an incredible range of F&B outlets, from upmarket eateries and restaurants to inexpensive cafes. The industry offers tremendous entrepreneurship opportunities because of its low entry barriers. It attracts enterprising individuals who give up professional careers to go into business as well as foreign talents with new business concepts. Today, many home-grown F&B entrepreneurs have expanded overseas by setting up joint ventures, franchises or corporate-owned outlets. Main types of food and beverage services: Restaurants: - 33% of the total industry, which employ about 42% of the total work force in the industry. o Fast food outlets employ about 30 workers, 30 being part timers. o Restaurants employ about 19 employees. o Caterers employ about 22 employees on an average. F&B industry singapore

60 40 20 0 restaurants fast food food caterers others

percentage of total establishments

percentage of total employed

Facts and Figures

Total Number of F&B establishments Total Number of workers in the sector Operating Receipts Operating Expenditure Operating Surplus Profitability Ratio Average Annual Remuneration per Employee 5,244 79,342 S$5.04 billion S$4.84 billion S$362 million 7.2% S$17,400 1

Submitted by: Himanshu Ghughtyal

Project Dignity 2009

Akk Singapore has a diverse ethnic culture so as the variety of cuisines the country always need. Food and beverage business from most parts of the world are thriving business here. There are even markets for Chinese food, Indian restaurants, south Indian eating joints, continental restaurants, to list a few, but taste of many parts or the world are budding business in Singapore. All these stats mention the great opportunity Singapore posses in the field of entrepreneurship in F&B industry in Singapore.

One of a very important stat about Singapore is the perception of foreign nationals and foreign companies about working in Singapore.

Critical success factors

In the case study of Project Dignity, it is new type of social enterprise on the rise in Singapore that of a management school and a food court or small restaurant that extend their core mission To build and return the dignity to the disadvantaged and disabled through vocation with passion. This can be done in a way through providing spaces for like minded social activists to discuss projects and ideas; as well as lead by example and show that the pursuit of a social mission centered on sustainable agriculture and fair labour practices need not conflict with the profitability of a food and beverage enterprise.

Submitted by: Himanshu Ghughtyal

Project Dignity 2009

However, there are numerous challenges that such social enterprises face that must be considered when evaluating the long-term feasibility of such start-ups. First, many of these food courts may make thin profit margins, if any at all. But in this case the company has projected decent amount of profits after just three years of start up so that doesnt seems to be a problem. Owners however may find due to the small size of their food court and relatively inaccessible locations, stiff competition from surrounding F&B outlets, recent rises in the price of raw materials, and the fact that expanding the business necessitates expanding the workforce, and hence expenditure on workers salaries. Another factor commonly mentioned was the lack of awareness and receptiveness on the part of the majority of Singaporean patrons towards social causes and hence willingness to patronize the food court. Secondly, similar to most of F&B industry - where slightly more than one third of employees are part-time (Economic Survey Series Food and Beverage, 2005), the food court should not have a requirement to hire mostly temporary staff and hence have relatively unstable workforces. In addition, their bias towards hiring people who believe in their social mission, and hence could be good advocates for their cause, has also restricted their potential workforce. Lastly the school and the food court, by virtue of their social mission, need to ensure that awareness of the causes they promote and the issues they stand for are effectively communicated to patrons through both the actual dining experiences, as well as other communication channels such as posters, donation boxes and the hosting of events. This has occasionally come into conflict with the need to provide a high-quality, well-serviced meal for diners who want a fuss-free eating experience. Also the Project Dignity may fall short in another crucial area, due in large part to their need to minimize expenditure in a competitive industry that of establishing an ethical supply chain all the way from sourcing produce from sustainable, organic farms to serving food to those least able to afford it.

Submitted by: Himanshu Ghughtyal

Project Dignity 2009

Market entry options

One of the best market entry options for project Dignity to enter into Singapore market could be a joint venture with a social entrepreneurship firm, a company in F&B industry and a well established business school or polytechnic in Singapore. In any business venture, risk is inevitable even if it is meant for a social cause. For most companies in Singapore, success in the global playing field is contingent on several factors such as: usage of aggregated intelligence, focus on market demands and characteristics, and mitigation of business risks. This is why a making a market entry strategy is also important. A market entry plan for Project Dignity should address:

Strategic partner options and candidates for joint ventures and partnerships. Such as few corporate who want to do some social work and other social work organizations already existing in Singapore. Identifying correct and potential candidates for the school. Level of support required to build partnerships and to provide after course placements to the passing out students. Making well terms with the Singapore government and strictly follow their rules and regulation. Collaboration with banks to provide student loans and finance in the future for entrepreneurship ventures. Perform comprehensive preliminary research, in the field of education and F&B industry. Conduct thorough site visits and choose a convenient location for the school so that the disabled can reach the school with no hassles. Get excellent legal assistance. Build excellent local relationships. Develop strong leadership without bureaucratic decision bottlenecks.

Key considerations

Apart from considering the option of a joint venture a foreign national should consider these points: Common Company Structure for Foreigners Private Company This is a locally incorporated company where the number of shareholders is limited to 50. Exempt Private Company

Submitted by: Himanshu Ghughtyal

Project Dignity 2009

This is a private company: which has not more than 20 shareholders, and none of the shareholders is a corporation or that is wholly owned by the Government and which the Minister, in the national interest, declares by notification in the Gazette to be an exempt private company. Foreign Branch Any person who wishes to register a branch of a foreign company is advised to engage a professional, e.g. a lawyer or an accountant to assist him in the preparation and filing of the application for registration via Bizfile. The Companies Act requires a foreign company to appoint two local agents in Singapore to act on behalf of the company. The agents must be ordinarily resident in Singapore i.e. a Singaporean Citizen, a Singaporean Permanent Resident, or a person who has been issued an EntrePass/Approval-In-Principle letter/Dependant Pass. Government Programmers & Assistance Project Dignity can tap into these Government programs and assistance schemes to start up in a better manner. Training & Skills Upgrading For Food Stalls

Workforce Skills Qualification (WSQ) For F&B they can use the WSQ for F&B to train and certify themselves or their students accordingly. Training grants are also available to Singapore Citizens and Permanent Residents. WSQ Food Hygiene All food handlers must attend the WSQ Food Hygiene course. Grants are available to Singapore Citizens and Permanent Residents.

Other Government Programmes & Assistance

There are many other programmes and assistance schemes available to all F&B establishments the school want to apply for. Few examples are: F&B Capability Development Programme (CDP) S$12 million in funds for F&B businesses to improve their capabilities. Customer-Centric Initiative (CCI) For F&B. Funds for F&B businesses to improve their service levels Local Enterprise And Association Development (LEAD) For F&B. Funds for F&B industry associations to embark on projects that benefit the whole industry F&B Workforce Skills Qualification (WSQ) Get subsidies to train and certify your staff using the WSQ framework

Licenses & Permits

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Project Dignity 2009

All food stall operators must obtain these licences and permits to operate or carry on certain business activities in Singapore. Essential Licences & Licence Compliance for Food Stalls

Food Stall Licence anyone or organisation that wishes to operate a food stall must have this licence. Points Demerit System for F&B Establishments Food stall licensees who violate environmental health regulations will get demerit points which may lead to licence suspension or revocation.

Other Licences & Permits for F&B-Related Activities

You must obtain licences or permits to carry on certain activities. These activities, typically carried out by food stalls, require licences or permits:
o o o

retailing liquor retailing tobacco products placing TV sets at food stalls

For a list of activities and the corresponding licences or permits required, please refer to the F&B Licences & Permits section.

Laws & Regulations Food stall operators must comply with these laws and regulations to operate or carry on certain business activities in Singapore. Essential Laws & Regulations Relating To Food Stall Premises

Generally, the operator of the food shop is responsible for ensuring compliance to laws and regulations relating to F&B premises. To find out what your responsibilities are as a food stall operator within the food shop, check with the food shop operator. For details on the laws and regulations that apply, please refer to the Laws & Regulations for F&B Premises section.

Essential Laws & Regulations Relating To Manpower Of Food Stalls

Registration of Food Handlers Food stall licensees must ensure that all food handlers are registered with the National Environment Agency (NEA). Foreign Workers & the F&B Industry Food stall and hawker stall licensees cannot employ foreign workers on work permits.

Key Government Agencies

Submitted by: Himanshu Ghughtyal

Project Dignity 2009

National Environment Agency (NEA) & The F&B Industry NEA issues food stall licences and ensures that food stalls comply with environmental health regulations. Singapore Workforce Development Agency (WDA) & The F&B Industry WDA leads and drives workforce development in Singapore. You can tap into WDA programmes to train and certify your workers.

Recommendations

From the case study, it is clear that while this new generation of type of social enterprises show great potential as places for social activists to gather and work for the physically and mentally challenged persons, who are in need for a dignified life. Much needs to be done in terms of: (1) Market education - Educating Singaporean population on social and environmental causes with a view to encouraging their patronage of such schools and food courts (2) Industry links finding ways for Project Dignity students and food courts to collaborate, perhaps through internships or permanent employment options. Also finding funds if any student or a bunch of students wants to startup an entrepreneur ship venture. (3) Resource mobilization creating public, private and community-based seed specifically for such specialized schools and food & beverage social enterprises of various types. (4) Collaboration - more dialogues between such social enterprises who world for disabled or needy and other civil society or grassroots organizations tackling these issues should be encouraged as such associations can be leverage upon to gain access to a wider audience, as well as impact the facilities provided to the school by the government and through donations. (5)Expand in future - widen their support network and increase their employment, Entrepreneurship and revenue-generating opportunities.

References

http://www.spring.gov.sg/Content/WebPageLeft.aspx?id=0bc87c07-656b-4746-b475-e24de856eec9 http://www.singstat.gov.sg/pubn/business/essfnb2007.pdf http://www.edb.gov.sg/edb/sg/en_uk/index/industry_sectors/education/global_schoolhouse.html http://www.focussingapore.com/singapore-industry/business-opportunities.html http://www.acra.gov.sg/Services/Compliance/

Submitted by: Himanshu Ghughtyal