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Singapore is widely known for its pro-business environment, which encourages almost all kinds of foreign business owners to start and grow their businesses in the country. One common business idea that many foreign promoters plan to pursue in Singapore is establishing a grocery store, convenience store like 7-11, or a mini mart. The idea is grocery and similar mini mart is a retail store. So there is a ready business. So it must be easy to set it up and start making profits.
However, locally people are available to do these businesses. Also the grocery and similar retail businesses often require significant investment. When converted it into home country currency, the promoter often find it difficult to manage this level of funding.
Before making the decision you need to consider the following aspects.
The feasibility of establishing a foreign grocery store in Singapore depends on who will manage it, and in this regards you have two options.
Grocery stores typically require consistent management due to numerous purchasing and retail activities this business involves. Presence of a key manager is a must. In this case It is highly recommended that you, as the grocery store owner, apply for an Employment Pass (EP) or Entrepreneur Pass (EntrePass) and relocate to Singapore to manage the store. However the key question here will be, whether your employment pass will get approved?
Alternatively, you can hire a Singapore citizen or permanent resident as your store manager while you oversee the store operations from overseas. In this case obviously you are leaving control in the hands of the person whom you know barely. Many promoters will not like this option especially if they want to have control over the operations and growth.
This arrangement will likely become less efficient if the hired manager does not have enough expertise and skills. Hence, you have to consider hiring someone with substantial experience in store management. This also means investing in a decent amount of salary (at least S$4,000) for him or her. Even in that case, the question will arise, if the hired person will work with the motivation and zeal of that of the original promoter?
If you will be hiring a manager, you need to fully trust him or her and shell out an ample amount of money at the start of the store operations.
The last and the most important part is about the cost of entire project of setting up the store and making it operational. Lets start with the store manager salary. Taking it to be approx.. 4000 SGD per month, and presuming that you need to keep in reserve his or her salary for at least three months, you will need to plan at least S$12,000.
In addition, you will need to allocate a deposit of at least three months of rent (the typical S$5,000 monthly rental – deposit amounts to $15,000). For a space that measures 1,250 sq. ft., the typical monthly rental is at S$6,500. You also need to give your store an allowance of at least two months for it to actually start operating; hence, saving for at least a two-month rental will cost you around S$10,000 to S$13,000.
Then you need to arrange for furniture, shelfs and any other setup that might be required for display of items. There will also be investment in Fridge, chillers, cash machine, POS etc.
And then you will need to buy the stock. Which will cost you another few thousand dollars. It will largely depend on the size of store and the value of typical goods you sell.
In general the entire upfront investment needed for this option is around S$40-50,000. Other unexpected expenses, like facility renovation and additional furniture or workforce, should be considered as well.
Many foreigners, find it difficult to arrange this much amount for a grocery store startup.
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