1. Initial Set Up Costs
- Stall tender bid/Stall rental
– $1500 to $2000 in a popular area
– $500 to $1200 in a less competitive area
If your bid is successful, you must pay 7% GST on tendered rent. In between 2021 to 2025, the rate will rise to 9%.
Source: iChef Club SG (https://www.ichefpos.com/en-sg/blog/how-much-does-it-cost-to-rent-a-hawker-stall-in-singapore)
This price only lasts for the lease period (3 years). After that, you must pay NEA the market rent (as assessed by the Chief Valuer).
The rental increase will be staggered over two 3-year tenancy agreement periods when the tenancy agreement is renewed.
- Table-cleaning fees (for cooked food stall) – $300 to $550
- Service & Conservancy charges for the first month – $130 to $450
- Hawker license fee for up to 3 years – $33
- Deposit of two months’ rent – $3000 to $4500
- Kitchen equipment – $5000 to $12000
2. Opportunity Costs
This is the cost spent in preparing to set up a stall, especially if you don’t have any prior experience in cooking or in the food business. This also includes cooking classes and apprenticeship.
One real-life example would be this article about a pair of young hawkers with no cooking background. They travelled to Kuala Lumpur to train for 6 months in an apprenticeship program on how to make roast meat and char siew.
If we assume that they incurred a low opportunity cost of $2000 per month for the program, it still adds up to $24000 for the two of them.
Rendall and Kai from Roast Paradise
Even this article about a Japanese cook, who has experience in cooking at a ramen stall, spent 6 months of intensive training of up to 12 hours a day to master the art of cooking mee pok.
Mr Naoji Kuribara learning the art of making mee pok from a Singaporean
As a matter of fact, the business has done so well that it set up a 2nd stall at 243 Cantonment Road with plans to venture to Japan!
It is a huge gamble to jump in headfirst into an unknown industry. However, it is not impossible to succeed. As what Randall and Kai from Roast Paradise would advise, this is a “doable business, as long as you are determined enough and have set your mind to it.”
Although it is recommended to learn from hawkers in the field, here are some of the few available courses and cooking classes in Singapore catered for the hawker trade:
3. Operating Costs
According to NEA, the total average monthly operating costs of a typical stall range from $8000 to $9200.
The operating costs include worker salary, stall rental, utilities and other costs such as table cleaning. However, the biggest operating cost comes from raw ingredients.
These results came from stalls selling chicken rice, fishball noodles, mee siam and drinks across the hawker centres in Singapore.
An example would be this article of a hawker selling prawn noodles. Compared to 6 years ago, fresh prawns used to cost him $10/kg, but that price has increased to $15/kg. This works out to about $2400 more every month based on his usual sales.
Hence, it is important to come up with a business plan and ensure you find the right suppliers, or you will have a very thin profit margin.
The Total Amount
To sum up, here is a cost breakdown that a typical hawker stall could incur for newcomers:
Initial set up costs: $17,000 to $20,000
Opportunity costs: $20,000
Monthly Operating Cost: $8,000 to $15,000
As of 2016, the government tried to improve and promote the trade by coming up with funds and grants to compensate for the high start-up cost and lack of funding support.
While there are increasing challenges to the hawker trade not to mention, long hours of laborious work, it takes both passion and determination to succeed and thrive in the trade.
Many hawkers are continuously motivated when their customers are enjoying their food, and when people show appreciation for the effort they have committed to their job.
So, the next time you enjoy a cheap and delicious meal from your favorite hawker stall, do appreciate the amount of time and effort that has gone into that one meal which you would be finishing in a few minutes!
