I like to eat in hawker center in Singapore, nice food, cheap price and full of options. Once in a while, my colleagues will take me to the famous hawker center in China Town to explore. One of our favorite stall is Prawn/Crawfish Rice Noodle which may have been there 20 + years; it’s quite famous and popular just judging by the queue.
We were wondering how much it can earn this week. I did some simple calculation; the number behind the calculation is mainly based on my assumption. It’s easy to notice it’s a family business (an old couple and their son); so I did not include additional labor cost. Feel free to challenge my model. “Variable Cost” here only mean cost which are directly linked to how many plates has been served; the others are all categorized to “fixed cost’ to make the calculation simple.
15000 SGD per month is not small number for hawker center stall; frankly speaking, it should perform majority of all the stalls (if my model makes sense). One of my colleagues ever wanted to quit when she saw the profit and operation hours – 3 hours per day 11:30 AM to 2:30 PM.
However, they working hours are far more than 3 hours per day, they need to prepare the source, prawn, crayfish and so on; almost everything before 11:30AM. During the 3-hour operation period, they just simply boil the noodles and add toppings and source.
Besides, it’s challenging to improve the profit even more. Because 1) it’s difficult to improve the sales volume since it’s already operating for full lunch time and adding dinner time will not make big change; 2)main cost is coming from prawn and crayfish which is also their sales differentiator (normally, rice noodles are matched with chicken which is cheaper); how could you cut the cost from your sales differentiator (maybe smaller ones); 3) it’s hard to improve unit price even more in a very old hawker center which, however, is located in city center and brings steady customer flow.