Starting An F&B Business In Malaysia: A Step-By-Step Guide | Business Series

Want to start your own F&B company in Malaysia in 2022 or even 2023?

Unfortunately, it may be tougher than you think.

How do you acquire a business license in Malaysia?

What food and beverage should you sell?

How many possible rivals are there in the food and beverage industry?

SME Bank claimed that up to 50% of F&B firms in Malaysia fail by the 5th year of operations.

But don’t fret! This doesn’t imply that you shouldn’t operate your café or restaurant.

It only means that you need to be clever about it so you don’t wind up being part of that statistic.

To help you prepare, here’s our step-by-step guide on how to launch a F&B company in Malaysia!

• Test the market
• Construct a business strategy
• Secure financing
• F&B licences and permits
• Supply chain
• F&B equipment
• Choose a POS system
• Create the menu
• F&B marketing approach
• Quality control

Step 1: Narrow down your concept and test the market

Starting F&B Business In Malaysia Guide

There are a lotttttt of cafés in Bangsar, KL.

Pokok KL….Therefore Cafe….Urban Daybreak….

So as an example, what would distinguish your F&B company distinct if you want to do sort of the same thing in the same area?

Think about it for a moment.

This initial step is vital in starting you on the proper road to F&B business’s success.

Use TART (yum yum!) to help you get started:

Think about what you want to sell - Coffee? Pasta? Brunch foods? Cocktails?

Analyse and Research! Analyse the market and understand where the demand and holes are to cut down your list so you may pick 1 – 3 concepts to test

Test your concept and whip up a few variants of the meals or beverages until you come up with the ideal recipe

This early step of launching a F&B company demands A LOT of creativity, awareness, and patience, but the more time you spend in building the appropriate recipes and business, the better your chance of F&B greatness.

TIPS:

Get the thoughts of others by doing taste tests - This might be done amongst family, friends and even future consumers. You might even try putting up a pop-up at neighbouring grocery shops or events to test your recipes and receive early feedback from consumers.

Don’t base your ideas solely on the current craze — Most trends come and go. Your items should be durable and outlast the trend in order to avoid clients from leaving after the hoopla is done.

Step 2: Construct a F&B business strategy

The most critical stage for launching up F&B company in Malaysia (and worldwide) is drafting a precise F&B business strategy.

This is to assist you and possible investors acquire a better grasp of your concept and the viability of the firm.

An F&B business strategy should contain the following:

The food/drink idea and company concept — are you going to be a quick-service restaurant, full-service restaurant or bar? What food/drinks will you offer and what are the pricing for each?

Firm entity - are you launching the business as a solo trader or via a partnership? Perhaps even a franchise or limited company?

Target market — which set of clients will be drawn to your business? Create customer avatars to narrow down your consumer base.

Location — where will your company be located? Where are your customers? What type of competition will you encounter in that area? Important elements to consider for the appropriate site are the cost of rent, accessibility to prospective clients, distances to rivals and any plans for the future.

Marketing – insert your company name and logo. What is your branding and marketing strategy?

Financial prediction and budget - establish an estimate of expenditures you will incur e.g. inventory (food and beverage), labour, rent and utilities

Operations - what is the structure of your firm going to be like? Think about management style for front-of-house and back-of-house personnel

IMPORTANT:

Most F&B companies fail in the first year because they struggle to breakeven.

So your financial prediction and budgeting component of your F&B company plan is vital.

Be careful to include the following in your F&B financial projection:

Sales prediction - estimate the average purchase per customer visit and the average cost of goods sold (COGS) each customer visit to acquire a sense of when how much you need to sell and for how long before you can breakeven within a particular period

Salary expenditures - incorporate labour cost into your Cost of Goods Sold (COGS) (COGS)

Startup cost - rent, utilities, equipment, beginning cash balance, initial inventory

Ultimate Checklist To Increase Sales

Step 3: Secure money

Now it’s time to think about how you are going to finance your F&B company.

It might cost up to RM500,000 to open a café or restaurant in Malaysia. The majority of it will come from renovations and equipment acquisitions. Here’s a brief breakdown for your reference:

• Licences, permits and business insurance
• Rental
• Equipment
• Marketing
• Employees
• Technology setup (WiFi, business software, etc) (WiFi, business software, etc.)

And this is just the one-off expense.

After this, you have your continuing cost where you’ll probably spend between RM25,000 – RM50,000 per month on recurrent expenses including loan repayments, rent, wages, insurances, and utilities.

So essentially, you need a lot of cash to get started, and enough capital to keep you going.

Luckily, there are a variety of different options to finance your new venture:

• SME business loan from banks or the government
• Find investors or go into a partnership
• Family/friend loans

Think about beginning a modest F&B company initially and you may the grow it up later.

Don’t expect to generate a profit straight immediately and recognise that money will always be a bit tight at initially.

Step 4: Sort out legal papers

Make sure you do your homework and secure all the essential licences and permissions you’ll need for your F&B company.

According to the Malaysian government’s official website, some generic licences that are valid for any firm include:

• Company Registration
• Company and Employees Income Tax Registration
• Employees Provident Fund
• Social Security Organisation
• Human Resources Development Fund
• Business Premise Licenses and Signboard Licenses

And because you’re in the food and nbeverage sector, you’ll need certain particular licences and certifications like the ones below to manage your cafe/restaurant/quick-serve:

• Food handling permits
• Alcohol license
• Halal certifications
• Health & Safety permit

TIP: The licences you require for your F&B company vary on the state you’re in - Kuala Lumpur, Sabah, Penang, etc..

So be sure to verify with your State Authority on what permissions and certifications you need to receive for your F&B company.

Step 5: Ensure you have a solid supply chain

In order for your F&B company to prosper, you need to hunt for a solid and dependable supplier.

Ideally, you should be acquiring the freshest food and components at the proper amount and at the right time.

Maintaining a solid connection with your supplier is also vital to guarantee that any future difficulties may be resolved swiftly e.g. a last-minute surge in supply demands.

Make sure you maintain in continual communication with your supplier and allow them adequate time to find and deliver your ingredients.

Here’s a list of some online vendors you may purchase from:

• Supplybunny.com — comprehensive and easy-to-navigate supermarket supply platform
• Dropee – Wholesale F&B supplier marketplace
• Foodbiz Malaysia — complete list of food producers, distributors, and suppliers
• OhMyGrocer - wholesale F&B supplier

Step 6: Buy or rent F&B equipment

Once you’ve secured your financing, it’s time to start shopping for all the equipment you’ll need for your restaurant or café.

For F&B enterprises, restaurant equipment and appliances are likely to be one of your most important initial expenditures.

Create a list and compare pricing for each equipment in order to discover the best offers. Here are a few things you may need:

• Work surfaces e.g. counters, cutting boards and food serving tables
• Kitchen appliances e.g. stoves, fryers, microwaves and ovens
• Equipment e.g. frying pans, pots and culinary utensils
• Cold appliances e.g. refrigerators and freezers
• Furniture e.g. tables, seats, booths, decorations
• Glassware and silverware
• Tablecloths, placemats and napkins
• Take-away containers

Here are some online equipment vendors in Malaysia:

F&B Equipment - commercial kitchen equipment provider

Cooking Arena - kitchen equipment and appliances vendor

Step 7: Choose a Point of Sale (POS) System

Every F&B firm has a solid POS system to help operations run more effectively.

A POS system enables you to:

• accept consumer orders and transmit them immediately to the kitchen
• control and adjust table layouts
• track reservations
• make payments
• provide consumers with contactless ordeing and payment
• have your own food delivery

A solid POS system should guarantee you have clear and consistent communication between front-of-house and back-of-house.

And with its back office, you will also be presented with comprehensive data analyses and reports such as:

• Daily sales report
• Best and worst selling products
• Sales increase
• Stock levels
• Customer purchase behaviour

And so on….

Step 8: Creating the menu

How many things are you intending on selling on restaurant or cafe?

Make sure you don’t over-do it since too many alternatives will send people away!

When building your menu, remember to take these items into consideration:

• Use precise and descriptive wording
• Show photographs of food/drink products wherever feasible
• Use a variety of hues
• Always offer a quick description of what’s in each dish
• Highlight suggested selections
• Keep it tidy and easy to read

Step 9: Come up with a F&B marketing approach

How can you persuade people to come to your café, restaurant or food truck?

Besides the standard marketing approaches (e.g. adverts/posters, TV advertisements) and promotional offers, the greatest marketing plan for any F&B company out there is to use…

Social media.

Almost everyone is on social media these days and photographs of food/drinks are continually floating online.

For example, there are more than 215 million photos labelled under #foodporn on Instagram alone!

That’s insane!

So certainly, people enjoy snapping photographs of their food/drink and posting them online with their followers.

You must take advantage of this by having a decent social media presence and building up your business’s social media profile by shooting appealing images of your product offers. This is an extremely beneficial platform if you’re beginning a small F&B company.

You need an account with at least 3 main social media networks in your country - Facebook, Instagram, Twitter, and Google My Business.

TIPS:

Create a Google My Business account to list your business on Google so customers can simply learn more about you and even get directions to your location. Find out how to set up Google My Business here!

Focus on food presentation and aesthetic plating so consumers are ready to snap a picture of your cuisine and post it on their social media profiles. This will enhance the amount of shares of your food/drinks on social media and build organic buzz. Learn more about food photography here!

Get connected with micro-influencers and food bloggers — Micro-influencers tend to have more engaged followers and food bloggers offer material that may reach out to your target demographic. Invite them to your location during your soft launch to evaluate your food/drinks to build additional buzz.

Step 10: Maintain quality control

One of the most crucial components to a successful F&B company is keeping a good quality in food and drink, and customer service.

You need to make sure that your items match the expectations of clients from the first day you launched your F&B company since that will keep them coming back for more.

Taking time to develop the recipe and recruiting the correct crew to produce and serve these dishes/drinks will go a long way.

Always attempt to obtain comments and evaluations from consumers and utilise them to continually improve.

TIPS:

Print down and paste food preparation SOPs in the kitchen as a reminder to your workers

Conduct random spot inspections to assess the quality of your food and drink, as well as your service

Final words

There you have it!

You’re all set to launch your new enterprise!

Remember that beginning a new F&B company will be a struggle and a rollercoaster ride of emotions, but if you continue to work hard and don’t give up, nothing will tastes better than triumph!

Happy Investing! 😉