How many times have you read news of folks of various backgrounds, including ex-chefs from famous restaurants setting up their own hawker stall or F&B outlet? Based on what we read, it may seem easy and tempting to start one.
In truth, running an F&B business, especially at a hawker centre, may pose quite a challenge. It requires long hours of work, which involves standing in a hot and stuffy environment. Workplace injuries like cuts and scalding by hot oil and boiling water are also unavoidable every now and then.
In fact, AsiaOne covered a story about how two young hawkers lost $45,000 and closed their business after five unsuccessful months of operations. Failures are rarely as widely publicised as successes. But generally, 1 in 2 F&B businesses do not make it past the four-year mark and 1 in 5 F&B outlets are replaced every year, according to Enterprise Singapore.
Despite these ominous statistics, if you are still hungry for success, then these are what you need to know to start your hawker stall business in Singapore.
Read Also: Guide To Starting A Business In Singapore
Singaporeans And Permanent Residents Above The Ages of 21, Are Eligible To Start A Hawker Stall Business
Like our public housing scheme, an application to start a hawker stall business in Singapore is open to only Singapore citizens and permanent residents. While you can compete in Singapore Junior Chef as young as five years old, you must be at least 21 years old to operate a hawker stall.
Aside from fulfilling these conditions, you must also ensure that you are not already renting or are a joint operator of two cooked food stalls in a hawker centre managed by NEA. Come on, give others a chance, please!
Also, you cannot apply for a hawker stall if you are an undischarged bankrupt, debarred or de-registered by NEA from holding a hawker licence. No surprises there.
Complete The Food Safety Course Level 1
If you are serious about starting a hawker stall or intend to work in a food establishment as a food handler, then you need to complete the Basic Food Hygiene Course (BFHC) now known as the Food Safety Course Level 1. This course is mandatory for anyone involved in the preparation and handling of food (ie: chefs, kitchen helpers, and food stall assistants).
The one-day (7.5-hours) course with assessment trains you in personal hygiene, handling and storing food safely, maintaining cleanliness of equipment and premises, and on Workplace safety. It costs around $150 (before GST), though depending on your age and whether you still have your SkillsFuture credits, you could get it for much lower.
Find Out What You Want To Be Famous For (We Mean Your Dish)
Once you have met the qualifications, the next step is to decide on what you should cook and serve.
Think about this. Most foodies in Singapore (or at least, those that I know) wouldn’t blink an eyelid about traveling from one end to the other, for good food. In fact, some dishes have ascended to such heights of popularity, that they are named after the location where they are based. Think of Katong Lasak and Boon Lay Power Nasi Lemak.
At this stage, you should have an idea of the dish that you intend to specialise in. Have your recipe nailed down to perfection and nothing less.
It could benefit you when you need to decide on the stall category (ie: cooked food, Indian cuisine, or Halal cooked food) when you bid and also when doing your cost estimations.
Aspiring Hawkers Can Enrol In The Hawkers’ Development Programme To Learn About Running A Hawker Stall
Want to start, but still do not know how and where to start? In the words of Uncle Roger, Haiyaaa!
Well, fret not; the National Environment Agency (NEA) and SkillsFuture Singapore (SSG) have got you covered. They launched the Hawkers’ Development Programme (HDP) in 2020 to equip both new and existing hawkers with the relevant skills and knowledge to run their hawker businesses.
In short, the programme consists of three stages. Stage 1 is a training programme that imparts knowledge on culinary and business management. Stage 2 is an apprenticeship with experienced hawkers of between two- or four-months. Stage 3 is incubation, where you put what you have learnt into practice by running an incubation stall. We have covered the HDP in more depth in our previous article – The Hawkers’ Development Programme (HDP): Helping You Cook For A Living.
Moreover, from January 2021, young aspiring hawkers (cannot be just young at heart), who have recently graduated within three years or ORD for males, can apply for a Work Study (Certificate) in Hawkerpreneurship under the HDP. The new programme is similar to the HDP, with the exception being the duration of the course. Unlike the HDP, the certificate course is 12-months long and aims to provide more training support for the young trainees. And it gets better, as trainees will be paid $1,000 per month as a training allowance for the full length of the course.
Choose The Location Of The Hawker Stall Based On Your Target Market
Next, after you have decided what to sell, you need to determine who your target audience is and where they might be.
As small and accessible as Singapore may be, location matters regardless of whether you buy a property or where you decide to run your business. You do not want to be based in an obscure location where foot traffic is low.
Different hawker centres serve different demographics, like the office crowd or the residential crowd. Know who your target audience is and be as close to them as possible. There are 114 NEA managed hawker centres island wide. So, there are plenty of choices.
It may be a good idea to study the foot traffic of the hawker centre and size up your competitors before bidding. A good rule of thumb is to choose locations that are easily accessible and have the highest possible foot traffic. Even in popular hawker centres, the stall location matters.
However, there is a price to pay for a good location, as others like you would be vying for it. Good locations come with higher rents.
Do Your Sums On The Running Costs Of Operating A Hawker Stall
To run a successful stall, you would need to place an equal emphasis on your business management skills as you would on your cooking skills. While you may not need The Apprentice level of business acumen, having some business knowledge allows you to calculate your operating costs, price your dishes, and better promote to your target market.
Here is where having identified your speciality dish matters. You can work on your cost estimation based on the ingredients and the related cooking supplies required. After that, you have the other big “money suckers,” your employee wages and rental fees. In fact, a search on the local jobs portals for a stall/cooking assistant, shows employers are willing to pay between $1,800 and $3,000 for a 6-day, 8-hour work week depending on the job task. High or low, that’s the market rate and should be factored in.
If you think that was it, no, there’s more. Other related expenses include the service and conservancy charges (S&CC), table cleaning costs, and utilities like your gas and refuse removal fees.
The total monthly expenses could range from $10,000 to $20,000. Most of these costs differ across different cooked food, the needs of the hawker and the hawker centre itself.
Aspiring Hawkers Could Apply For NEA’s Incubation Stall Programme To Start Their Business With Less Upfront Costs
A business seminar I once attended mentioned that successful businesses start off by using OPM – Other People’s Money. In the case of aspiring hawkers, you could get to use Ah Kong’s (aka government) money to launch your hawker stall business. What can be sweeter than that?
The Incubation Stall Programme (ISP) was launched in 2018 to give more support to selected aspiring hawkers. They would be given incubation stalls pre-fitted with basic equipment and offered 50% off the market rent for the first nine months, followed by another six months at 25% off the market rent.
Participants can test and refine their business plans and recipes with lower start-up costs. So, now you have no excuse for saying, “money no enough” to start your hawker stall business.
To qualify, applicants must be at least 18 years old and attend either the Introduction to Managing A Hawker Business course by Institute of Technical Education (ITE) or a similar course, or be a graduate of a business management course offered at a tertiary institution.
Three Steps To Bid For A Hawker Stall
The process of bidding for a hawker stall is broken down into three easy steps.
Step 1: Know The Tender Period
The tender period is usually from the 13th to 26th (10.30am) of every month. If the start or end date falls on a public holiday or a weekend, then it will commence or end on the next working day.
Step 2: Check The Stalls That Are Available For Tender
You may check on NEA’s website (Tender Notices) or from the notice board at NEA One-Stop Information and Service Centre (OSISC) at HDB Hub, East Wing #26-01.
Step 3: Submit Your Tender
If you like what you see and are ready to bid, then you can buy the tender form and Submission Envelopes A and B for $10 at OSISC. You also need to buy a postage stamp and have a photocopy of your NRIC. Next, fill in the tender form and submit it together with the tender deposit (cashier’s order) into the tender box, which is also at the OSISC.
According to NEA, vacant stalls are awarded to the highest bidders. But that does not mean you need to outbid everyone else. Like some auction winners, you do not want to have buyer’s remorse by bidding aggressively.
To help you with your bidding, you may reference past winning bidders to have a sense on the rental rates paid by other stallholders at a specific hawker centre.
Once Your Bid Is Successful, You Can Apply For Your Hawker Licence
If your bid is successful, you can expect to receive the letter of offer from NEA around three to four weeks after the close of the tender.
You need to apply for your hawker’s licence ($13 per year x 3years) and should have completed your Basic Food Hygiene Course (BFHC) before you are allowed to run your hawker stall.
Thereafter, you would need to pay for the stall rental, the S&CC and table cleaning fees for the first month of the Tenancy Agreement. You will need to pay the stamp duty and place a deposit that is equivalent to two months’ of rent.
You Cannot Sublet Your Stall To Others
Since 2012, new stallholders have not been allowed to sublet or assign their stall to others. So, if you think you can profiteer by bidding for someone else, drop that thought.
You Could Use The Hawkers’ Productivity Grant To Buy Kitchen Automation Equipment
Given the various grants that are available for hawkers, aspiring hawkers have many avenues of help from the government.
The Hawker’s Productivity Grant (HPG), which was launched in 2017, is open to existing hawkers. It helps cooked food stallholders pay for kitchen automation equipment that may increase their productivity.
Eligible stallholders could claim 80% of the equipment costs on a reimbursement basis, capped at $5,000 over three years. The list of qualified automation equipment was expanded to include 24 types, such as food processors, automatic cookers, and electric fish scalers.
Unlike the other schemes, the HPG will only be available till March 2023. So, if you are still on the fence about starting a hawker stall business, know that the clock is ticking on this grant.
Now Is As Good A Time As Any
Starting a hawker stall business now may be a better time than ever. After two years of restrictive safe management measures due to the coronavirus pandemic, Singapore is transiting to an endemic living. More vaccinated people are allowed to eat in bigger groups, which can only be a boost to the F&B industry.
Moreover, with the median age of hawkers at 59 years old according to NEA, we need more (young) hawkers to consider a career as a hawkerpreneur to preserve our UNESCO recognised hawker culture. It would be a shame to lose this cultural identity of ours in the decades to come.
With that, let us pay homage to the past and present hawkers who have fed us with a gastronomical variety of affordable dishes. And here’s toasting to your success!
Building a Sustainable Future
Be part of the Singapore Green Plan 2030 and achieve your business’ sustainability goals. Fund your green initiatives today with the OCBC SME Sustainable Financing Framework.
Join The DollarsAndSense Business Community
For more content that helps entrepreneurs, freelancers, and self-employed individuals and learn to build better businesses, join the DollarsAndSense Business Community on Facebook.