S$209,000 before 1st cup sold: Amacha founder, 35, breaks down costs of opening a shop in S'pore

Before the first cup of tea is even brewed and sold, S$209,000 would have to be spent just to get a store up and running, from paying rent to setting up the point-of-sale system.

This figure was shared by local food and beverage entrepreneur Sebastian Ang in a Sep. 26 Instagram video.

Ang also founded the sundry shop-themed speakeasy, Mama Diam, as well as the now-shuttered HDB-themed café, Lou Shang.

S$209,000 just to open doors

Amacha is branded as tea rooted in Traditional Chinese Medicine principles, with recipes refined to suit modern palates.

It currently has five stores around Singapore.

Commenting that the total initial capital required might "surprise you", Ang broke down the numbers needed to open one of Amacha's stores.

First, there's rent, which comes in at about S$15,000 a month.

Adding up the required three-month deposit plus first month's rent, it totals S$60,000 upfront.

Then, renovation. Carpentry for shelvings and counter tops cost around S$15,000.

S$10,000 went to flooring and tiles, and another S$10,000 went to works on walls around the store.

Electrical works, plumbing, ceiling works and air-conditioning came in at about S$50,000.

That's S$145,000 so far.

As for equipment, an automated tea-making machine cost S$10,000, while a gelato machine cost S$13,000.

Ice-makers, tea-brewers, fridges, sealing machine and other equipment set the business back S$17,000, Ang shared.

Cashier point-of-sale system and television sets to display menus and banners? S$4,000 and S$5,000, respectively.

This brings the total initial capital to S$194,000.

That's not all to get the store off the ground.

There's also the first bulk of ingredients, staff salary, insurance, utility deposits and "all the other small things that somehow add up".

All these easily cost another S$15,000, Ang said.

"So before we even sold our first cup, we have already spent S$209,000," Ang remarked, adding that this was only enough to get the doors open.

"After that, you still need to have enough running capital to keep the business going," he continued in the video.

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A post shared by Sebastian Ang (@sebastianang)

Overheads as crucial as initial capital

In his caption, Ang wrote that he had been asked by many about how much it actually costs to open an Amacha store in Singapore.

His experienced had taught him that overheads was just as crucial as initial capital.

Costs like rent, salaries, ingredients and utilities keep running each month, no matter whether the business is good or bad.

"This was something I underestimated when I first got into F&B. It's not just about having enough money to open the shop," Ang wrote.

"You also need enough working capital to survive while the store finds its feet," he pointed out.