Have you decided that opening a restaurant in Malaysia is your next big endeavour? That’s an exciting undertaking, so congratulations! There are, of course, a lot of things to plan and do first—especially in light of COVID-19—so it’s important to know exactly what’s involved and what to expect. That’s why we’ve created this step-by-step guide about how to open a food business in Malaysia so that you can start getting your to-do list organised.
#1 – Formalise a plan
The best thing you can do before opening a restaurant (or any food business for that matter) is to have a clear plan that maps out all of the essential components of your business.
The F&B industry is not only fast-moving but is also extremely competitive, and entering the scene without a concrete plan is a surefire way to get derailed from achieving business success. You need to be prepared by having a plan that’s set in stone and includes the most important areas, such as:
- Business operations
- Financial projections
- Restaurant branding and market fit
- Marketing strategy approach
- Staffing needs and hiring policies
- Service standards and compliance
Be sure to take your time in being as clear and detailed as possible. One misstep or misunderstanding in any of these key areas could snowball into a detrimental outcome for your food business.
#2 – Secure your financing
It’s a fact: no business can open, let alone operate, without money. Having funding secured is an absolute must to get your restaurant off the ground.
When opening a restaurant in Malaysia, this is what you need to know from a financial perspective:
1. The cost of opening and operating your food business.
2. What the costs include—this requires breaking down exactly what you need money for, including rent, staff, equipment, etc.
3. Your chosen method(s) for getting the necessary capital—loans, investors, self-funding, etc.
The amount of capital you need to secure depends a lot on the type of restaurant you want to have. For example, the startup cost in Malaysia to open a cloud kitchen through KitchenConnect is 39,000 MYR, while the cost for a traditional restaurant is 750,000 MYR.
#3 – Get your business registered
Registering and Incorporating a business in Malaysia requires many steps before you can actually open a restaurant. To make it easier, we’ve summarised the main ones here:
- Choose your type of incorporation—a Private Limited Company, Public Limited Company, Sole Proprietorship or Partnership, or Limited Liability Partnership
- Decide your proposed business company name
- Specify your business type
- Provide a registered office address
- Include a business address
- Have paid-up capital, which is a minimum of RM1
- Provide details of business director(s) and promoter(s)
- Have a declaration from the director(s) and promoter(s). All companies in Malaysia must also appoint a company secretary within 30 days of incorporation who has a principal residence in Malaysia
- Provide a declaration of compliance from the individuals who are responsible for the incorporation
When all steps are successfully completed, Malaysia’s registrar of business, the Suruhanjaya Syarikat Malaysia (SSM), will issue a certificate of registration.
#4 – Find your ideal location
You may have heard the business mantra: location, location, location. That’s because having the ideal location is key when opening a restaurant in Malaysia. Whether you have a dine-in eatery or offer delivery-only, these are the factors to consider when deciding where you’re going to set up shop:
1. Which area or neighbourhood offers the most business potential?
2. Who is your target audience?
3. How many competitors already do business in that area?
If you decide to open a cloud kitchen, these are considerations you don’t need to handle yourself. Cloud kitchen providers like KitchenCollect provide a turnkey process, whereby this research has already been done.
The facilities they offer have been pre-selected and meet the criteria based on their location being situated in populated areas that provide the best business opportunities. This is a huge time saver, meaning that cloud kitchen owners can get their food business up and running much quicker and with less stress.
#5 – Hire your core staff
It’s said that a company is only as good as its employees. That’s because your business’ service, dedication, quality and commitment to a positive experience are all delivered to your clientele via your staff. That’s why choosing the right team is so important. Not to mention, that staffing accounts for a major chunk of your operational costs. Here are some of the main staffing-related questions to ask yourself when tackling this vital step:
1. How many employees do you need to run your restaurant?
2. What positions are the most critical to the restaurants’ success?
3. How will you train the staff and what does the training process entail?
Staffing is another area where cloud kitchens have an advantage—virtual kitchens typically need a small, core staff of 2 or 3 members. Traditional restaurants in Malaysia, however, usually hire a team of over 10 people. Having smaller staffing needs translates into much lower costs and less to worry about from an operational standpoint.
#6 – Prepare to open up for business
Finding the right location and seeing the pieces of opening a new restaurant in Malaysia coming to fruition is exciting indeed. But you still need to handle many more details before you’ll be ready to open up for business. The key matters that need to be settled include:
- Insurance – you take on a lot of liability risk when you open a restaurant or any food business, so securing adequate insurance is imperative. Anything could go wrong in many different areas, so you need to make sure you’re covered.
- Renovations – chances are that the location you’ve found isn’t perfectly suited or equipped for your restaurant. Whether that means renovating or revamping the interior design (or both), it will take time and money to complete before your food business is ready to cater to customers.
- Equipment – opening your doors for business isn’t an option until you have all the equipment you need to prepare and cook the delicious dishes you’re promising to deliver. From storing to preparing and delivering, make sure you’re fully equipped before you take that first order.
- Suppliers – you’ll need to secure the right suppliers that you trust to deliver the quality and quantities of the ingredients you need in the timeframe that you need them. This should be sorted before you open your doors to the public.
- Licenses – restaurants in Malaysia need to have several licenses to do business, including:
- Food Establishment Licensing: setting up a restaurant as a company is the first step
- Food Handling License: anyone handling food is required to complete a food handling course conducted by a Ministry of Health approved training school
- Signboard license: all businesses in Malaysia must fill out an application for this license which includes the nature of the business, company name, business license number and the design of the signboard
- Liquor license: if you want to serve liquor of any kind, whether it’s beer or hard liquor, you must secure the appropriate license from your local town council
- Halal license: if your restaurant isn’t planning to serve pork or alcohol, you may want to get the Halal license which is certified by Jabatan Kemajuan Islam Malaysia (JAKIM)
- Music Authors’ Copyright Protection Berhad License (MACP): you must submit an application to the MACP if you wish to play music of any kind in your restaurant
- Composite License: dictates when and where to dispose of your waste
- Wholesale and Retail Trade License: required by foreigners who wish to conduct this type of business in Malaysia
If you’re a cloud kitchen owner, all of these logistics are handled for you by the facility operators. In the cloud kitchen business model, owners need only figure out the type of equipment and ingredients they need for their menu offerings and focus their efforts on preparing delicious food, getting customers and turning a profit.
#7 – Market your restaurant
Competition in the F&B industry is fierce. This makes marketing all the more important if you want to gain any traction. To keep up, you’ll need to market your food business as well as, if not better than, your competitors. To establish your presence and stay ahead, make sure you’re leveraging the following marketing techniques:
- Website – make sure your food business website is user-friendly, visually appealing and displays your menu prominently; make it easy for customers to see the delicacies you offer and place an order
- Online marketing – in addition to an optimised website, be sure you are active on social media
- Offline marketing – menu flyers and pamphlets, advertising boards, etc
- Soft launch – get the word out to attract customers via promotions, offers, food tastings, special events, etc
Marketing is the cornerstone of long-term success for all food businesses. The advantage that cloud kitchens have—compared to traditional restaurants—is that exposure and expansion happen quicker and easier because providers like KitchenConnect have their facilities placed in locations that have the strongest business potential.
Start your restaurant ownership process today
Now you know the process of opening a restaurant in Malaysia, are you ready to get started? If you decide that owning a cloud kitchen is the right path for you, fill out the form below to contact us for all the information you need!