“I’ve got a great idea for a Food and Beverage (F&B) restaurant business, but I don’t know where to start!” Have this ever come to your head? If you are like us and have zero experience starting a F&B business in Hong Kong, then read on.
There are limited information online that tells you how you should start a F&B business in Hong Kong, so we would love to share with you our experience and hope that this can give you a better picture on how you can start getting your business off the ground!
All businesses starts with an idea. The most important is to do your own research and see if your idea is feasible and practical in the market place. If you are not looking for investors, a detailed business plan is not needed, as your plan will keep evolving until the day you start. What you should have is an idea of how much your initial cost is and how you can make a profit in your business.
Another thing you need to have in mind is the timeline. A plan without timeline is only dream. It is best working backwards. Start with when you want to launch your business, then fill in the gaps on what you need to do to make the launching happens in time. Once you are sure of these, then it’s time to get busy!
Step 1: Set Up Your Company
The first thing you need to do is to set up your company incorporation. You can try setting up yourself by doing some research here, or you can be like us and hire a company that will help you do all the necessary paper work. We paid about HKD7,000 for the service, which saved us a lot of time and trouble. There are cheaper options out there, but some might not do a good job and you might end up spending more money and wasting a lot of time.
Once you have your Business Registration (BR) and Certificate of Incorporation (CI), you can go and get a business bank account for your company. This might take awhile, so remember to book an online appointment earlier with the bank of your choice. Oh, and it also costs HKD1,200 to open a HSBC commercial banking account.
STEp 2: find your location
When deciding on the location of your business, there are several factors to consider such as your target audience, crowd flow in that area, size of the property, and suitability of the premise. In our experience, having a good agent helps a lot. Also, there are a few things you should check before you decide on an outlet:
- Is the outlet used for mortgaging? You wouldn’t want the property to be taken by the bank while you are doing your business
- Are there any illegal constructions in the outlet? If there is any, it is the landlord’s responsibility to get them removed before renting it to you
- Is the electricity load enough for your business?
- Is management fee and Government rent included in the rental fee?
- How long is the lease term and the rent-free period?
Extra notes on renting a commercial property:
- Agent fee is normally half of the rental fee
- You will need to pay 3 months rental as the deposit + prepay the first month rental (total 4 months) when you sign the contract
- Both the landlord and you need to contribute to the Government stamp duty
step 3: Getting Food Licence in hong kong
Getting a food licence in Hong Kong is a must. Depending on what kind of F&B business in Hong Kong you are going to run, there are different options available. If you are operating a takeaway like us with no dine-ins, you can choose to apply for a Food Factory License, which is cheaper and easier to get, instead of a General Restaurant License. Below are the more common types of licenses you may need to apply:
- General Restaurant License – Food Business that involves sale of meals or unbottled non-alcoholic drinks for consumption on the premises.
- Food Factory License – Take-away food shop or catering services.
- Food Composite License – Sale and preparation for sale of various specified types of simple or ready-to-eat foods that do not involve complicated preparation. e.g. 樓上 Cafe
- Restricted Food Permit – non-bottled drinks like fresh fruit juice or diluted syrup drinks, milk and milk beverages, sushi, sashimi etc.
To make your life easier, hire a contractor who has experience in setting up F&B business in Hong Kong, as they will work together with a licence consultant who make sure you can get your licence done. We paid HKD60,000 for the consultation fee, which also includes the licence fee.
For more information on which licence your business needs, click here for more information.
A Hygiene Manager and/or Supervisor Certification is also needed before you are issued with a provisional license. There are several authorities that will conduct courses to issue the certificate, with fees ranging from $1,200 – $1,700. We took the course provided by HKPC.
4. Get Your Outlet Ready
The kitchen is the soul for any F&B business. Start sourcing and ordering your kitchen equipments (i.e. refrigerators, ovens, etc) at least a month before you launch as they may take up to 2 weeks to be ready in your kitchen. For the small equipments like utensils and cookware, get them just before your kitchen is ready. Take a walk along Shanghai Street and you will get most of the things you need.
You will also need a Point of Sales (POS) system. There are a lot of different choices out there in the market. There are cheaper options like iPad based apps that can do the same thing as a traditional POS system, and you can always work with Apple Business Consultants to get more ideas (and it’s free!). Or if you are thinking of having a self ordering system like us, you can seek Aigens for a free consultation.
5. Working with the Right People
The hardest to deal with in all kind of business is human resources. In the F&B industry, it is especially difficult to find good and responsible chefs and service staff. Be prepared for high turnover rate.
When sourcing for suppliers, always look for more 2-3 suppliers for each food category so you can have more options when comes to cost and quality.
6. Menu planning and Pricing
Effective menu planning is one of keys to the success of your business. The goal is to give the customers what they want so that they will come back for more and spread the words. Start by understanding your Buyer Persona.
Next is pricing. You will need to come up with your food cost and calculate how much you need to sell to make a profit. Remember to also include your monthly fixed expenses such as rental, staff wages, utilities etc. into consideration as well. Proper planning and having an efficient purchasing method is the best way to do this.
Starting a F&B business in Hong Kong takes time. All of the steps above can be and should be done concurrently. Licensing takes about 1-2 months to be approved, and before that, you will need to have your F&B outlet floor plan ready. It is important to negotiate a sufficient rent-free period so that you do not start paying rent until you can officially launch the business.
Please feel free to let us know your thoughts in the comments section below.