Starting with the closure of bars and entertainment venues and slowly extending to stricter social distancing measures, this circuit breaker has forced many in the Food and Beverage industry to switch to takeaway and delivery services.
Contributing 0.8% to Singapore’s Gross Domestic Product, the estimated 12,000 restaurants employ 200,000 workers, who now might find their job in jeopardy due to this pandemic.
In this episode of Bridging the Gap, we talk to Steven, the business owner of Atas Food Pte. Ltd, and Jin, an investor with SeedIn to bridge the gap and understand a little bit more about how badly affected the F&B industry is.
Steven is a veteran of the F&B industry, founding Atas Food Pte. Ltd with 3 other partners a few years ago. Atas Food Pte. Ltd specializes mainly in Thai Food, Thai Boat Noodles in particular, which has seen a rise in popularity before the pandemic. Within 3 years, they build 3 outlets at Changi City Point, Bugis Junction and Seletar Mall.
Jin is a young investor at only 18 years of age. Having heard about crowdfunding at the age of 14, SeedIn was the platform of choice when he decided he wanted to diversify his money. The interest rates and interest payments were something that caught his eye and what finally got him to go along with it was the extremely low default rate. Atas Food Pte. Ltd is one of the companies that Jin had decided to invest in on SeedIn.
Being one of the companies funded by Jin on SeedIn, Atas Food had chosen to repay their loan 7 months in advance instead of taking their time paying it over the course of 12 months.
Jin had found it a nice surprise that his liquidity was freed up and he could use it for other purposes, hopefully getting a better interest rate based on his principle investment.
Starting an SME in Singapore isn’t easy, according to Steven. In order to grow, many SMEs within their first 2-3 years would find it difficult to get a bank loan. Steven, however, was extremely pleased to find out that there was a platform such as SeedIn to help bridge this gap.
Business has been slow in the past 2 months due to the Circuit Breaker. For Atas Food, sales have dropped to less than 20% of its usual sales. In order to survive, new strategies have to be found to manage a post-COVID-19 world.
With Phase 2 opening up, the goal for them is to keep costs low and survive this difficult period. Despite the difficulties in surviving, a 4-Month Rental Waiver, 2 given from the government and 2 from their landlord, has been instrumental in helping them stay afloat with rental costs usually taking up 15-20% of their monthly costs.
In the immediate future, Atas Food is aiming for low rental places like HDB Shophouses that aren’t in suburban areas. While it would probably lower their revenue due to the lower footfall, their focus will be shifted to the new normal which is in delivery.
Steven is extremely grateful to the community of investors in SeedIn for putting their trust in local SMEs and helping them bridge the gap to take their business to the next level.
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