SINGAPORE: When Anthony Chan started his first Coffee Hive Cafe in Robinson Road in 2012, the realities of being an F&B boss came as a rude shock.
He knew it would be challenging but not this challenging.
“Once, the pipes burst and the whole place was flooded. I had to stay there till the wee hours of the morning to mop the floor, and try to clear the plumbing,” he said.
If staff called in sick, he would have to brew the coffee, wipe the tables and sweep the floor.
“My parents were shocked. They said, ‘You are a graduate, why are you doing this?’ But you really have to put your pride down for a very long period of time and be able to tell yourself that it’s all right. This is what I want to do. So I will do it.”
The 39-year-old related these unpleasant experiences with a smile on his face. These days, nothing fazes the fresh-faced, unassuming entrepreneur.
“If you want to stay in this business, you have to be ready for anything. In the first one or two years, I wanted to throw in the towel many times. Today, I’m okay.”
It certainly looks that way.
Today, Chan and his three business partners have 10 Coffee Hive outlets, and a restaurant – Wok Master – under the umbrella of Coffee Hive Holdings. They are also looking to internationalise the brand with a view to signing a master franchise in the ASEAN region.
Their focus is to provide high-quality local comfort food, such as chicken curry, in comfortable surroundings at affordable prices in the Central Business District. It was a friend’s invitation to lunch at Shenton Way that gave Chan the idea.
“The crowd was crazy during lunchtime. Most people had to go to the hawker centres, queue up and sweat it out. They also couldn’t sit with their friends because of the crowd. It was between that and going to a restaurant and end up paying S$20 or S$30 for a meal.”
The lunchtime crowd at Shenton Way inspired the genesis of Coffee Hive. (Photo: Anthony Chan)
He and his three friends realised there was a market for quick, affordable local home-cooking.
RETRENCHMENTS LED TO A DESIRE FOR ENTREPRENEURSHIP
Chan was a high-flyer in the semi-conductor industry at the time, but it was on a down cycle. Retrenchments in the sector precipitated his decision to start a business.
“I started to see people in their 50s and in senior management being let go. I didn’t want the same thing to happen to me when I reached my 50s. I wanted to be able to do something that I had control over. In the working environment, we often don’t have the chance to steer the ship the way we want to.
“The achievement of having your own company, to decide how the company grows – that’s the type of joy that I wanted.”
Chan had dabbled in business before. He started an online shopping platform about 10 years ago, selling items imported from China. But because he managed it while working full-time, a lack of focus resulted in failure.
GOING BEYOND FADS
Being completely devoted to Coffee Hive helped, but he had to be extremely strategic in a crowded market.
“A lot of people try to chase fads, try to do the next bubble tea for example. The problem is that it may not be sustainable and only certain players – the stronger players – will do well.”
Coffee Hive was a small player and still is, he said. So they had to focus on “staple foods” like wonton noodles, laksa and, of course coffee, tea and toast.
I remark it’s not exactly an original idea and there are much bigger players than Coffee Hive who offer similar fare.
The key, he said, is in picking the right locations. This is something he spends a great deal of time on and making sure that the rents he pays come with the requisite foot traffic.
He also takes pride in the quality of the food. The recipes come from family, friends and staff members.
“I got the chicken curry recipe from my mother-in-law and we just slowly accumulated more along the way. My friend gave me a recipe for rosemary chicken. Some of the older staff who helped us in the kitchen had their own recipes for wonton noodles and other local food, so we introduced those to the menu as well.”
While he offers Singapore cuisine in a café setting and charges café prices, he hasn’t forgotten the hawkers who offer similar food in hawker centres across Singapore.
“Our outlets are there for the convenience of those in shopping malls or office buildings. But many love to go to hawker centres and I think the amount of effort and the amount of skill that many hawkers put into food preparation is commendable. We must recognise that in this time and age, you have to pay a premium for good hawker food too. If you go to places like Australia or even the US, you cannot get such food at such prices because it’s not sustainable.”
The foundations of the Wok Master restaurant are similar but with a twist, serving up dishes such as ramen with pumpkin sauce. For this, he hired chefs who are constantly tweaking the offerings.
GUTS ARE NOT ENOUGH
Anthony Chan (centre) credits his business partners and staff for Coffee Hive’s success. (Photo: Anthony Chan)
While food is Chan’s passion, he quickly realised that the F&B business goes beyond good food.
“I’ve seen people who say ‘I make a killer cupcake so I will come out and start my own cafe.’ But it doesn’t work like that. You need to know the cost of food, manpower, rentals and utilities. You have to know your wastage rate.”
He feels a lot of young entrepreneurs have guts, but become discouraged when the realities set in.
“It’s good to be daring but it’s also very important to be prudent.”
One of the early mistakes he made was in managing staff.
“It was hard to get cooks, cleaners and so on. So when people came in and asked for a specific salary, we would just give it to them if we thought it was reasonable, but then the staff members who joined earlier realised the disparities and sometimes it was unfair. We didn’t have a stipulated salary scale for each job and this caused unhappiness.”
He took this seriously because he realised that the food business is not about food, but about people, especially the people you need to make everything work. So he goes the extra mile these days.
RESPECT AND RECOGNISE YOUR STAFF
“Successful businesses manage manpower well. So if you’re able to treat them with respect, motivate them, show them that when the business benefits, they do too, the business will do well.”
Chan admits they don’t pay the highest salaries, but they pay “competitively enough”.
“Also, people don’t work just for money. They work for recognition and pride. We reward them and we also take them out for special dinners, but at the end of the day, it’s about the human touch – making the effort to talk to them, how you talk to them and showing them care and concern.”
This has also helped him get buy-in for productivity solutions within his cafes and restaurants. Staff are more receptive to learning to use technology to hasten work processes because they are trained well, encouraged and recognised.
They’ve installed automated fryers in their central kitchen to be able to fry large amounts of ingredients at a time and a coaster paging system to allow for self-collection of food.
“The Government has stepped up to help businesses implement these productivity solutions, but it needs to do even more to engage businesses personally to get more on the productivity track.”
However, some might say the Government is doing more than enough with various schemes and grants.
He disagrees.
“The problem right now is structural. The Government wants to reduce foreign manpower so it needs to step up even more to help businesses cope. Otherwise, you’ll see even more companies close down. So I think the government needs to do even more handholding, especially during the crossover period.”
DINING BECOMING ROBOTIC AND COLD
Anthony Chan receiving the Singapore Heartland Business Award 2015 from Deputy Prime Minister Tharman Shanmugaratnam. (Photo: Anthony Chan)
While implementing these automation features, he strongly feels that F&B establishments need to be selective.
“I will not implement a self-service kiosk or e-tablets for ordering. Dining in Singapore is becoming robotic and cold because of some of these automation measures. For my industry, we have to be selective.”
But more and more customers are getting accustomed to this, so why not, considering the manpower constraints in the industry?
“I still feel people want to order their kopi-c siu tai and so on from a real person. Our staff are told to be warm and they often remember your preferences so much so that they know your orders even before you make them on your next visit. I see customers’ faces light up when they speak to our staff.
“We have to be careful about the customer service experience Singapore wants to be known for. The human touch is important even for casual dining. It can’t all be just about robots and vending machines. It has to be about good staff. You shouldn’t have to go to an expensive restaurant for that.”
So how does he then deal with the manpower crunch in the F&B industry?
RELAX MANPOWER CURBS IN THE F&B INDUSTRY
The curbs on foreign manpower have hurt businesses that have challenges getting Singaporeans to work in certain jobs. Coffee Hive has raised salaries and invested in staff training and career progression.
“We are trying our best to get locals, but the pool of locals who want to work in this industry remains small. People still prefer to work in white-collar jobs. It’s still very deep-rooted in our culture.
“Also, my pool of Singaporean staff are all above the age of 50. That’s going to be a problem as the entire population ages and our workforce gets smaller.”
The crux of the issue according to Chan is that foreign manpower curbs need to be relaxed.
“Think about what kind of service experience we want to offer and relax manpower curbs in certain areas where Singaporeans really don’t want to work. I see it in the construction industry. I think even more should be done for F&B.”
He pointed out the manpower policies have had far-reaching effects.
“They have led to an artificial inflation of manpower costs. Now, compared to neighbouring countries, our costs are high. A cost balancing needs to be done. Otherwise, it will render our local companies uncompetitive. The high cost of doing business will be translated to increased prices and cost of living for the average Singaporean as well.”
Anthony Chan (second from left) with his business partners. (Photo: Anthony Chan)
However, the influx of foreign manpower in the past had led to an artificial depression of salaries to the detriment of Singaporeans. Do we really want to revert to that situation?
He became circumspect.
“I don’t mean open the floodgates. Maybe just increase the quota by 20 per cent.”
Chan also fervently believes that in order for entrepreneurship to thrive, such measures have to be urgently addressed.
“We are starting to see that lifetime employment is no longer possible. Entrepreneurship is the way for Singapore to survive. We need to have guts. We need to encourage more people to try, even if they fail. It needs to become the norm, so that eventually there is no longer a social stigma attached to people who fail in their business and they can continue persevering.”
So how might he encourage other Singaporeans to take the leap into entrepreneurship?
“I’ve always thought about business as a way of solving problems and improving lives – the customers’ lives, your employees’ lives, your life and the economy as a whole. Every business must have a vision based on fundamentals and these are mine. I want my employees to be proud of being a part of my business.”
