How do I run a successful café in Singapore?
With the surge of café openings and the specialty coffee scene blowing up on our tiny island, running your own show could seem like the wise thing to do. After all, all you need is a decent capital, reliable suppliers, and cool hipster branding, no? Unfortunately, while that might be enough to get things up and running for a while, it doesn't neccessarily entail a successful, long-term business.
So what do you need for your café venture to pay off in today's competitive climate? Here to weigh in on the million-dollar question are two café owners — Mr Liu, one of the founders of The Glasshouse and Yozo Otsuki, founder of Kurasu. Below, we discuss the importance of concepts, ballpark figures to work towards, and the makings of a café that will outlast the rest.
AUDIO EXCLUSIVE: Listen to our full conversation with Josh Liew (Co-founder, The Glasshouse) and Yoko Otsuki (Founder, Kurasu).
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What do you think of the café scene in Singapore?
Mr Liu (ML): The café scene in Singapore is pretty interesting. I feel that as a whole, there is more supply than demand. Singaporeans feel that café food is more of a treat and a luxury and is something we indulge in on the weekends, whereas in Melbourne, they go to cafés daily as it’s very affordable for them. I do feel that there’s this challenge where there’s not enough demand and that can be a struggle for cafés in Singapore.
Yozo Otsuki (YO): Compared to where I’m from in Japan [Kyoto], there’s a limited amount of people in the specialty coffee space. I find that it’s amazing that everyone is really close and shares information with each other. Also, I find that Singapore's café scene (as compared to other Southeast Asian countries) is quite mature. There are a lot of people who come over from Malaysia, Indonesia, or Thailand to see what the scene is like, and to learn and incorporate that into their culture as well. I see Singapore as a hub for Southeast Asia — which is great for me and my business.
What are some major considerations when it comes to setting up a café here?
YO: We started off building a brand online and not in a physical space. That, to me, is quite unique because it’s really easy to start something with very little capital and see how it’s bred and if it actually connects with people. I always had a vision to maybe start a café but I wasn’t sure if it was going to be successful. So I approached it with a small capital to see if it connected with the people that I wanted to connect. It ended up taking three years – and we actually built an audience. Then, I finally got into building a physical café. I approached it a little differently from other people but I feel how I did it could be something that people could consider as well.
ML: One of the first questions that I always ask aspiring café owners that come to me is, “What's your concept?” The concept is more of the vision for the place; what you envision this place to be. How long do you want to see the place going for? So, I feel that having a concept or a brand story behind it is really important and you need to do some homework around it. Another important thing to consider is the location.
If I want to set up a café in Tiong Bahru that can sit 40 to 50 people, serves a mean brunch and good coffee, what’s a ballpark figure I should set aside to be safe?
ML: To be safe, you're looking at anything from $150,000 and it can go all the way up to $500,000 depending on what scale you want it. I’d say a very big sum of that goes into things like renovation, equipment, and furniture.
What do you think defines a successful café?
ML: It has to have great quality products — be it the coffee or your food, great service is something that people look out for, as well as a strong bonded team. A team really makes or breaks a place. While the crowd or social media can be good indicators, that shouldn’t be the main focus as they are just by-products.
YO: I totally agree. I think a lot of people get lost in having what they want and what they emotionally feel is right. Money is important — numbers and metrics are very important — and I definitely learnt that throughout the years. On top of everything Josh mentioned, a success in my café is being able to have that flexibility for the café to run well without me being physically present.
What are some challenges people can expect to face along the way in a climate like Singapore's?
YO: Capital. You have to consider that. While we do quite good business (both in Kyoto and Singapore) in terms of getting great customers, rent is high. A rough estimate? 60 percent is for employees’ salary and the cost of supplies, 20 percent is for rent, 10 to 15 percent are for small factors like emergencies, so there’s five percent left… or none. Try to underestimate what you can in terms of the revenue that comes in and if it still runs, then that’s sort of a good gauge for me.
ML: One big challenge across all cafes in Singapore is labour. The market doesn’t pay very well and therefore people don’t feel rewarded; good staff find it hard to be practical or to raise a family with such a low wage.
What’s your last word of advice to encourage our readers to start a café in Singapore? What makes you happy at the end of the day?
YO: Being able to connect with people that are super creative and super passionate about what they’re doing, to be able to visit different countries and seeing the café scene and coffee culture across the world – all that is very satisfying. There are a lot of different factors but it’s the people that top it for me. The people that work for me are just amazing and I’m really thankful for all of them, for what they do, and the passion they have for the company. I’m super happy with where I am right now and I wouldn’t go back [to the finance industry] for a second.
ML: For me, this journey came with a lot of big mistakes but what really encouraged me along the way are the micro victories — like having your customers remember your name, greet you in the morning, or coming back to say that that was a great cup of coffee. I’m excited for what’s to come.