Funding - Singaporean seeking to start F&B/Events business in Jakarta, Indonesia

[Clarice Zhang]

Hi there, I'm a Singaporean with 11 years of working experience in roles such as Public Relations, MarComms and Corporate Sales.
As I'll be relocating in Jakarta end 2018 (due to spouse's secondment), I'm working on some ideas to start a F&B/Events business there with a social cause.
I noted that many of our funding schemes are to support the disruptive/digital innovative start ups, but what about F&B/Events industry? 

Would like to seek some advise on funding for F&B/Events businesses, and also any thoughts on doing business in Jakarta. 

[drllau]

You have to understand there's a distinction between risk capital (angel investing, VC, pre-IPO) and normal business financing (overdraft, factoring, pre-orders). Basically returns should follow risk so when you are entering an existing market which is service oriented, F&B tends not to pass the initial filter stage due to
a) often lifestyle business (individual/partners) and hard to dominate
b) labor intensive and thus hard to scale
c) existing competitive barriers and thin margins

Why is software different?
- high initial upfront development costs (barrier to entry) and zero marginal costs
- network effect and thus accelerating returns if first-mover
- opportunities to disintermediate, long-tail effects and fast adoption cycle (J-curve) leading to quasi monopoly pricing

Hearsay is that business in Indonesia tends to be dominated by family conglomerates and thus hard to disrupt, especially if there preference is to keep everything in-house (a tendency where cost of external contracting is high). There is huge urban/rural gap and spending power might be a narrower pyramid than you're used to. My suggestion is to do your own market research and find a niche you can occupy because in the long-term, the dominant players tend to follow one of three strategies - lowest cost, broadest offerings, specialist provider and you have to judge your own resources accordingly. Look at where there are fat margins and figure out how to squeeze in, provide a unique asset, or an area where you can deliver superior service. Funding ... well most entrepeneurs rely on personal savings so don't get into debt (and private equity is highest cost for any capital) without careful thought on the investor(s) perspective.

Lawrence
http://www.linkedin.com/in/drllau