How To Start A Home-Based Food Business In Singapore And Malaysia

With a lower start-up capital, a home-based food business could be a cost-effective way of fulfilling your entrepreneurial dream. As people continue to stay home and shop online, now may be the best time to start your own side hustle. 

For starters, you might be wondering: should I sell prepared food (e.g. home bakeries) or pre-packaged food items? Here’s a step by step guide to help you. 

Step 1. Formulate a business idea that sells

Prepared food requires more effort, and considerations such as production rate, packaging and delivery are crucial. Not to mention - do you have a solid recipe?

Meanwhile, selling pre-packaged food online is more straightforward and has lesser risks associated with quality control and food safety. However, with the lower barriers of entry, competition is also higher. 

Regardless of which approach you take, consider the following before solidifying your business idea: 

• Test the market: Before you start selling anything, you need to figure out if it’s something worth buying. Feedback from friends and family is always a good starting point.
  
• Find your unique selling point: Research the market and your competitors. What can you offer that they do not already have? Could it be a unique ingredient, or a competitive price?
  
• Focus on your core audience: Resources are tight when you first start out. Define your core group of customers and focus on providing value to them. You can always expand once you have a more stable footing.

(Photo by Jason Briscoe on Unsplash)

Step 2. Map out key operations for a smoother workflow 

Think about how you can best operationalise your business. Some questions to ask are: 

• Do I need a licence?
  Whether you are in Singapore or Malaysia, make sure you have the necessary licence and permits for your business. Here’s an overview of the regulations required. 

In Singapore:

In Malaysia:

• How do I get a good supplier?
  Finding the right supplier can give you a competitive advantage as they contribute to the price and quality of your items. Look for those who deliver on time, with consistent quality.

• Where should I store the items?
  Be mindful of your storage capacity when working with perishables. If space is a constraint for those selling pre-packaged food, look for suppliers that offer low minimum order quantities (MOQ), such as those on Trustana Wholesale. 

• How will I get my products to customers?
  Decide if self-collection, doing your own delivery or working with delivery partners like NinjaVan or Lalamove makes more sense. To minimise scheduling efforts, consider organising group buys or offering delivery by regions on specific days.  

Step 3. Decide where to sell your products: social media or online marketplaces?

• Selling prepared food
  Social commerce such as selling on Facebook or Instagram are a great option if you are dealing with small batch orders and there is customisation involved. The cost of set up is low, you can engage with customers directly, and you have direct control over how many orders to take in.
  
• Selling pre-packaged food
  E-commerce platforms such as Shopee and Lazada may be a better option as they already have existing infrastructure in place for listing items, payment support and delivery. Here’s a comparison of online marketplaces to help you decide which is best for your business.

(Photo by Ryan Quintal on Unsplash)

Step 4. Market your store for increased awareness and sales 

Operational matters may take precedence but don’t forget to market your business with these tips and best practices. 

• Visuals are your best friend
  When it comes to selling food, whether cooked or pre-packaged, let photos and videos do the talking. Share appetising photos of your food, experiment with props and backdrops, and leverage on free photo editing apps to help you achieve the desired outcome.
  
  
• Have a social media presence
  Post regularly and be sure to include relevant hashtags and keywords to boost discoverability. Consider joining Facebook groups for home-based food businesses to increase your reach and build awareness. 44.8% of global internet users are searching for product and brand information on social media, so this is where you have to be to reach your audience.⁷

• Use word of mouth marketing
  Reviews and word of mouth recommendations are one of the best ways to build trust in your brand. Get your friends and family to help spread the word and share photos of your food. Focus on getting reviews from customers. Encourage them to tag you in their posts or stories, and reshare those on your own page for greater engagement.

• Invest in advertising on e-commerce platforms
  Online marketplaces can be crowded; stand out from your competitors by investing in advertising. Sign up to be a “Preferred Seller” or consider joining sales events and free shipping/cashback programme. This often boosts your listings and helps you get more traffic. 

(Photo by Eaters Collective on Unsplash)

Don’t wait if you see an opportunity

A home-based business offers flexibility and the chance to earn some side income. For budding micro-entrepreneurs, it’s also a good way to test your idea in the market and experiment before embarking on something larger. With its low cost of set-up, there is not much to lose. So why not give it a go?

Reference:

1. https://www.hdb.gov.sg/residential/living-in-an-hdb-flat/home-business/homebased-small-scale-business-scheme
2. https://www.sfa.gov.sg/docs/default-source/covid/sfa-good-food-hygiene-tips-for-residents-preparing-food-under-hdb-ura-guidelines.pdf
3. https://www.sfa.gov.sg/docs/default-source/default-document-library/guidelines-on-safe-distancing-measures-for-home-based-food-businesses-(1).pdf
4. https://www.sfa.gov.sg/food-retail/overview/overviewnew
5. https://malaysiabiz.gov.my/ms/services/business-licensing
6. http://fsq.moh.gov.my/v6/xs/page.php?id=441000617
7. https://wearesocial.com/digital-2021