Despite the controversies surrounding recent claims of ‘plastic’ keropok being sold at the bazaar, thousands of food lovers continue to visit the bazaar every night, forming endless queues in a relentless pursuit of Instagram-worthy and tasty food. With a similar drive and hunger, young potential entrepreneurs also made a beeline to bid for their preferred stall locations before the start of the bazaar with the dream of running successful food and beverage businesses.
Nestled right opposite ONE KM Mall, a trio who are still studying in NUS had jumped onto the bandwagon. Roy, Qin Ze (both 23) and Heng Rui (24) came together and opened Tri Fries, a stall at the bazaar selling golden crispy fries with 3 signature homemade dips. They generously gave us an inside look into the numbers behind the business.
The Tri Fries guys.
Opportunity Cost Of Running The Stall
The choice to open up a stall means that the trio would forego the chance of taking up an internship or exchange during the summer break.
They had decided that it is more interesting and fun to step off the beaten track and try something new. To them, internships is a traditional path that does not need to be strictly adhered to. They think that the experience they get from being an entrepreneur is way more valuable and unique compared to an internship.
Initial Cost Of Setting Up Tri Fries
Rental fees have been escalating over the years due to the increasing popularity of the bazaar itself that translated to increasingly higher bids every year. Even though the prices may seem daunting at first, the trio was not deterred at all.
For a stall at the bazaar, the rent can peak $17,000 to $22,000 for prime locations (Wisma Geylang and Muslim Converts’ Association) and $8,000 to $12,000 (Tanjong Katong) for the less populated areas. Tri Fries settled with the latter, minimising the initial costs incurred.
Other fixed expenses include items for operations such as fryer, induction cookers, warmers, tables, chairs, posters or banners for marketing purposes. Since these items are quite standard, the trio did a comparison and bought from the most affordable suppliers that provide decent quality. We did some research here at DollarsAndSense and got a rough estimate of the prices of such items.
|2 x Multipurpose Deep/Air/Commercial Electric Fryer||
|3 x Induction Cooker||$180|
|2 x Table||$50|
|4 x Chairs||$20|
|Posters and Banners||$150|
For the period from 12 May to 14 June, the initial costs to set up a stall like Tri Fries is estimated to be about $10,600 at a less populated location along the stretch of the bazaar. On the extreme end, initial costs can range up to $25,000 for some other stalls which are situated at areas with higher traffic volumes.
Weekly Cost Of Running Tri Fries
The trio learned about wholesale markets in Singapore and how to get the lowest prices of cooking materials. They got in touch with wholesale suppliers, leveraging on the economics of scale instead of buying from supermarket themselves.
Co-founder Qin Ze provided us with a rough estimate of their weekly operating costs, which adds up to about $350 to $500. Using an average of $425 per week, we estimate the operating costs over the period of 5 weeks to be about $2,125.
How Much Is Tri Fries Making?
The verdict: $12,725. By adding up the fixed and variable costs, they estimate that Tri Fries would need to earn about $12,725 in 5 weeks to break even.
At the current stage, the young entrepreneurs are well on their way to break even, but not really making a profit yet. They mentioned that their businesses are growing every day due to word of mouth and marketing efforts.
The Signature Tri Fries at the stall costs $5 each. To break even, they have to sell over 72 Signature Tri Fries per day. Anything beyond this point would be their hard-earned salary since the trio man the stall themselves and labour costs were not part of the equation while calculating the variable costs.
Motivation Behind The Business
Despite the uncertainty of a regular income and late-night working hours, the trio continued to open up their stall at 5 pm sharp every single day. In addition to that, traffic may be low sometimes, which would be rather demoralising. They shared with us that sometimes they may even have less than 10 sales per hour, causing them to question their decision to set up the stall in the first place.
So what motivates them? Co-Founder Roy told us that the biggest driving force for them is the fact that the business is their own and they feel deeply about it. Any amount of money they make is still going to go straight to their own pocket, and it serves as an encouragement to them.
Co-Founder Roy shares: “The business has been incredibly rewarding and the experience is not something that I will trade the world for.” A smile on a customer’s face when they share with them how much they enjoy their food also motivates them to maintain the quality of food they sell.
Tips For Budding Entrepreneurs
It is easy to say that you want to start a business. The difficult part comes in when you actually have to execute it. You can think of an idea and plan forever, but these will never come to fruition until you get started.
Doing prior research before you embark on anything is critical. We hope this article gave you with a rough idea of the cost considerations that vendors need to incur. The trio’s advice for us is that once you are on your way, the kinks can be worked out and you must adapt to fix the problems that arise.
At the end of the day, even if your venture fails, know that you would have gained invaluable experience and knowledge that will put you in good stead for your next adventure.
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