Home-based food businesses thinking of scaling up their operations often find themselves stuck between a rock and a hard place.
On the one hand, setting up a shop requires at least a four-figure sum that they might not have. On the other hand, producing larger amounts of food at home for sale to the public could mean running afoul of the law.
This is where kitchen co-working spaces come in.
In the last two years, at least 30 home-based businesses here have been renting licensed kitchen spaces on a shared basis to prepare food that can be sold to the public.
Rental kitchen operators The Straits Times spoke to said they have had 20 to 50 per cent more inquiries since last year, but many have run out of space. There are at least four such co-working spaces.
At Baker’s Brew Studio in Sembawang, inquiries about kitchen rentals have tripled from one to three a week since it opened in February, said co-founder Beh Huat Jin, 26.
Food entrepreneurs pay $15 to $20 per hour for access to a fully equipped commercial-scale kitchen, sometimes sharing the space with one or two others at the same time. They usually prepare baked goods that can be pre-ordered online. These include sandwiches, oat bars, cakes and muffins.
Under the Home-Based Small Scale Business Scheme, residents can use private residential premises to make small amounts of food to sell to friends and relatives.
However, operators of food-related business activities that are advertised online and require the use of commercial-grade equipment must have the food prepared in properly licensed premises, or risk a fine of up to $10,000.
Not all rental kitchens have a National Environment Agency (NEA) licence that allows food to be sold to the public. Eureka Cooking Lab in Upper Thomson, for example, rents out kitchen space for private events or cooking demonstrations only but owner Jason Lim, 40, said some “still try their luck”.
NEA received more than 200 counts of feedback on unlicensed commercial cooking and selling food without a valid licence during the first half of this year, and has taken nearly 100 enforcement actions.
Checks on licences aside, entrepreneurs are glad for spaces that allow them to try out their recipes.
Ms Ng Xiu Juan, 24, a full-time baker and a culinary school graduate, pays $600 a month for a kitchen space for 40 hours. “It’s a flexible arrangement and works out for me cost-wise because the kitchen has all the equipment I need. We also get advice on how to promote our business,” she said.
Butter and Bake, a co-working kitchen space in the Lavender area, hosted just two businesses when it started last year but has 10 now. It offers a supportive community for entrepreneurs “serious about starting their own food businesses”, said founder Felicia Lee, 29. Her clients pay $660 each to access the kitchen for 30 hours a month.
Ms Annabella Sonwelly, 35, director of Annabella Patisserie, which is run from a rented kitchen, said: “This is a model that is helpful for many young start-ups as there is nothing big that we have to commit to upfront – and we can still grow our business when we are comfortable.”
Her small home oven became inadequate for growing business
Bakery owner Corine Yeoh, 25, used to feel “slightly guilty” when customers asked her where she made the customised cakes and cupcakes that she sold online.
Her business, Corine and Cake, was initially based at home when she started last year. As her customer base grew, however, she found it increasingly difficult to accommodate their requests. “There are also too many distractions at home if I’m trying to bake,” she said.
She considered setting up shop and applying for a National Environment Agency food shop licence to comply with regulations, but found it a daunting prospect.
“There were certain rules about pest control or the layout of the kitchen space that were quite strict,” said the former magazine editor who quit her job to focus on the business full time.
She came across a kitchen co-working space this year, and rented a space from January to September. She pays $660 a month to work in the kitchen for 30 hours, which has become a solution that is much more cost-effective.
“I could make around one cake at a time at home, as I had only a small oven. But having a commercial oven means that I can bake around nine at a time,” said Ms Yeoh, who fields around eight to 10 cake orders a week.
She also got recommendations from the kitchen’s owner on where to get baking supplies, such as chocolate, milk and cream, at good prices. “Things like these are quite important when we first start out in the industry,” she said.
She decided in mid-September to set up her own retail shop in MacPherson.
This would also allow her to devote more time and space to her business. “Working in the rented space for a few months gave me the confidence to scale up in the end,” she said.