operation & legal issues

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4. Start-up business

4.1 Operational plan

4.1.1 Trading status

Lams Coffee will register under a legal entity for Limited Liability Partnership(LLP). All registration have completed with the ACRA (Accounting andCorporate Regulatory Authority) (Enterprise one, 2009).

Approval of company name SGD $15 per name

Registration fees SGD $300

4.1.2 Management team

Lams Coffee management team involves three members Tran Anh Phuong, LeHoang Vu and Martin Li.

Tran Anh Phuong, Director of Food and Beverage

Phuong Tran has a dream to introduce and expand Vietnamese coffee brand gopopular in Singapore market. She has great interest in running a coffeehouseand food and beverage- related services. In her experience, coffee is a greataspiration, acting as a drink of creative power. In essence, she is a coffee drinkerand she loves coffee product of her country. By opening Lams Coffee, she wants

to share that love to those who are coffee drinkers. She believes that with a

Tran AnhPhuong

Director of Food andBeverage

Le Hoang Vu

Financial Assistance

MuhammadMartin Li

Executive Sous Chef &

Coffeehouse Manager


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hospitality and event management degree that will give her knowledge and to beconfident to run a coffeehouse successfully.

General responsibility:

Create a business idea and develop a long-term business plan. Scan the Singapore market environment, and develop a market plan

accordingly. Develop competitive strategies by basing on competitors profile and

activities. Setting up a network of relationship with suppliers, business partners

and communicators. Develop advertising campaign and marketing strategies. Handling with customers complaint and feedback systems. Arrange all staffs worksheet. Manage financial sources. Manpower planning.

Le Hoang Vu, Financial assistance

Vu Le has great experience in Finance and Investment management sectors, byhaving a financial degree in recognized university of Australia and more than 3years working experience.


Manage and develop the coffeehouses budget monthly, quarters andannually. Manage the profit, loss and cost control Control the purchasing of product and equipment. Responsible for staff salary, bonus and others.

Martin Li, Chief chef and coffee house manager

By having 10 years experience in making cakes and pastries, he has a greatknowledge in pastries industry with his passion and love. Otherwise, 3 yearsworking experience in a Vietnamese restaurant that gave him ability and skill tomanage Lams Coffee.


Build a good communicate with customers and staffs. Assign to provide training course to all staffs. Involve in recruitment of coffee house. Running daily operation. Handle with customers complaint and deal with their feedbacks. Guide staffs with high standard of products and services to customers. Handle with the restaurants technology (conveyor belt) and Ipad ordersystems.


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Responsible for coffeehouses facilities and equipment. Create and develop menus items.

4.1.3 Service team

4.1.4 Coffeehouse arrangement

4.1.5 Intellectual property

4.1.5.1 Trademarks

Lams Coffee will register the trademarks for its own logo, brand, name,signature, label, and packaging through online submission in eTrademarks. Theprocessing time will be examined within one to two months from the filling date.Fees for application a trademark will around SGD$ 341.00. The trademark willbe valid for 10 years from date of application, and need to renew every 10 years(IPOS, 2012).

4.1.6 Operational proceedings for the coffeehouse

4.1.6.1 Operational hours

The coffeehouse will operate all seven days a week. During weekdays (Mondaysto Thursday), the operation hours will be from 8 am 10 pm. In weekends(Saturdays and Sundays) it will be from 8 am 11pm. It will open even though

public holidays.

4.1.6.2 Manpower management

Full time employees in services and kitchens lines will work 9 hours onweekdays and during weekends will extend to 10 hours a day. Their lunch anddinners will occur in 1 hours break. Every week, they will have 1 off day andtheir overtime will be got payment in the accordance with MOM regulations.

4.1.6.3 Manpower costing for the coffeehouse

4.1.7 Facility & Equipment

List of equipment:

Number Name of equipment Quantity Photo


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1 Commercial CoffeeMachine SchaererCoffee Prime

2 Schaerer Coffee Joy

3 Coffee grinders

4 Coffee pots

5 Shelves & Racks


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6 Restaurant stylesbooths

7 Coffee housebamboo table

8 Caf lounge chairs

9 Caf chairs

10 Water station inkitchen area(Threecompartment sinks)

11 Water station in barcounter


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12 Pitchers & Carafes

13 Ice accessories

14 Ice bins & storage

15 Freezers

16 Ovens & Ranges

17 Commercial worktable


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18 Kitchen ware

19 Table silverwareutensils

20 Bake ware & tools

21 Professional grademixers

22 Conveyor beltsystems

23 Coffee glass cup


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24 Coffee cup smallsize

25 Coffee cup mediumsize

26 Phin filter

4.2 Legal issues

4.2.1 Taxation

4.2.1.1 Income tax

As Limited Liability Partnership, Lams Coffee will be charged as a partnershiprather than a separate legal entity. Total business income will be seen as totalpersonal income of partner as basing on personal income tax rate under tablebelow.

Chargeable Income Rate (%) Gross Tax Payable ($)

First $20,000Next $10,000

0

2

0

200

First $30,000Next $10,000

-

3.50

200

350

First $40,000

Next $40,000

-

7

550

2 800


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First $80,000Next $40,000

-

11.5

3 350

4 600

First $120,000Next $ 40,000

-

15

7 950

6 000

First $160,000Next $40,000

-

17

13 950

6 800

First $ 200,000Next $120,000

-

18

20 750

21 600

First $320,000Next $320,000

-

20

42 350

Table: Income tax rate for year of assessment 2012

Source: Inland Revenue Authority of Singapore, 2012.

4.2.1.2 GST tax

As Limited liability partnerships, Lams Coffee can register for GST that is a taxcharged on the supply of goods and services made in Singapore and on theimportation of goods in Singapore. The current GST rate is charged at 7%(Enterprise one, 2011). As Lams Coffee imports the coffee bean source fromVietnam that needs to pay 7% GST under processed food sector.

4.2.2 The central provident fund (CPF)

The Central Provident Fund (CPF) is a comprehensive social security savingsplan that has provided many working Singaporeans with a sense of security andconfidence in their old age. Different type and age of employee will be appliedfor different rate. The overall scope and benefits of the CPF encompass theflowing retirement, healthcare, home ownership, family protection and assetenhancement (Central Provident Fund Board, 2012).

According to CPF contribution, employer has to pay private sector employee16% of wage. Otherwise, the private sector employee needs to pay 20% ofwages by themselves (Appendix).


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4.2.3 Environment policy

As mentioned in firms objectives, Lams Coffee has recognized the important of

environment policy and promise to respect the environment by committing topractices environmentfriendly firm. Lams Coffee will evaluate and control the

environment effect of coffeehouses activities under food hygiene, wastemanagement and pollution control.

4.2.3.1 Food hygiene

The advantage of food hygiene license to shows that Lams Coffee is preparedhygienically and ensures safety for consumption. Lams Coffee attempt to implementand maintain high standard of food hygiene practices in coffeehouse and to makeemployees fully understand the coffeehouses environment principles.

4.2.3.2 Going green coffeehouse

As mentioned above, in order to practices environmentfriendly firm, Lamscoffee attempt to minimize their impact to environment by practices 3R policyreduce, reuse and recycle to reduce wastes such as food waste and foodleftovers. Moreover, by practicing that, it helps to enhance staffs knowledge andincrease saving costs. Further than that, Lams Coffee attempt to prevent andmonitor the noise, water and air pollution to reduce negative effect toenvironment.

4.2.4 Fair recruitment practices

Singapores demographic is diverse in age, race, gender, religion and ethnic.Regarding on that, Lams Coffee will practice fair recruitment in recruiting,treating and training employees fairly and respects them. Providing the trainingcourse for all full time, part time, specially care for elder staffs. It helps toimprove and develop employees skill, further than that, sustains and grows forlong term business. On the other hands, Lam s Coffee will adopt the workplacesafety and healthy to bring a good workplace environment to motivate all staffsand employees.

4.2.5 Loan program me for starting up the business

By becoming a permanent residents and below 26 years old, Tran AnhPhuong(owner) is eligible for the ACE Startup Grant that give for the first timeentrepreneur. Lams coffee will apply for S$ 50,000 loan from that scheme as itsmaximum. Follow by regulations, SPRING will match SGD $ 7 to every SGD$ 3that has been raised though Lams Coffee for up to SGD$ 50,000. Lams coffeecan submit the business proposal and supporting documents starting from 1 Feb

2012 to ACE start-ups administrator (ACE, 2012).


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Further than that, for the self-funding and thirds party sources investmentamount will be invested by self-funded is SGD$ 250,000.

4.2.6 Licenses & permit

4.2.6.1 Food shop license

This is a compulsory requirement under the Environmental Public Health Act thatduring the first stage of opening an establishment. The purpose of license is to ensurecleanliness and food safety in food retail outlets and to prevent food-borne diseases.For filling up this form, Lams Coffee can submit this form follow by table below(NEA- Food Shop license, 2012).

License Agency National Environment Agency

Cost of License SGD $ 130

Minimum license processing 5 working days

Valid time for One year

4.2.6.2 Grading of Licensed Eating Establishment and Food stalls

The grade of license is very important with an establishment, because it will show theoverall hygiene, cleanliness and housekeeping standards of the premises (NEA, foodhygiene, 2012). According to NEA, Food hygiene, the score will be rated within fourlevels:

A A score of 85% or higherB A score of 70% to 84%

C A score of 50% to 69%

D A score of 40% to 49%

4.2.6.3 Importing processed Food appliance

Lams Coffee needs to register with AVA to begin importing food from Vietnam.In tend to import of processed food as brewed coffee and instant coffee, inaddition some of food ingredients such as cashew nuts, black pepper, andsesame. It compulsorily needs to apply registration with the Quarantine &Inspection Department (QID) of Agri- Food & Veterinary Authority of Singapore(AVA) in accordance with table below (AVA, 2012).

License AgencyQuarantine & Inspection Department(QID) of Agri- Food & VeterinaryAuthority of Singapore (AVA)

Cost of License SGD $ 21.50 (include 7% GST tax)

Minimum license processing 3 working days


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4.2.6.4 Active your customs account

In case of importing coffee and food ingredients in of Singapore, it requires toLams coffee to active firms customs account. And it is free of charge andprocessing time in the same working day. After activation process complete

successfully, Lams coffee can use this account to apply for import permits/certificates through TradeNet System (Singapore customs, 2012).

4.2.6.5 Halal certification

In case of applying for Halal certification, Lams coffee will comply with the

Singapore Muis Halal Qualification Management Systems (HalMQ). In term ofHalal certification terms & conditions, it involves in eating establishmentscheme, food preparation area scheme, and product scheme and storage facility.Further than that, all the changes and additional in menus/ products and staffsmust obtain to HalMO through MeS (Majlis Ugama Islam Singpura, 2011).

Halal certificate $100 per applicationValid for 1 or 2 years

from the date of issues

Eating establishmentscheme (not exceeding185.5 square meters)

$480For a period of one year.

Food preparation areascheme (not exceeding

185.5 square meters)$630 For a period of one year

Product scheme$ 500 For a period of one year

Storage facility scheme$670 For a period of one year

Source: Adapted from Majlis Ugama Islam Singapura (2011).

4.2.7 Laws & Regulations

4.2.7.1 Essential Laws & Regulations relating to restaurantpremises

4.2.7.1.1 Premises Approved for F& B

In general, Lams coffee establishment can use and set up on a commercialpremise that has been approved for F & B operations. In fact, it can be checkedwith the landlord to know if the premises are approved. Normally, landlords getthe necessary approvals and advertise for F& B operators to set up food shops.Otherwise, Lams coffee can be check with government agencies under urbanredevelopment authority (URA) for all private property (Enterprise one, 2007).


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4.2.7.1.2 Design & Layout premises

For the food retail like Lams coffee, the design and layout of premises needs tocomply with the code of practice on environment health. Good layout helps notonly to meet the environment requirements but also helps to attain a high

standard of food hygiene and cleanliness for Lams coffee. Lams coffee needs tocontain information on the design criteria to produce the good layout(Appendix)

4.2.7.2 Essential Laws & Regulations relating to manpower

management

4.2.7.2.1 Staff requirements

In order to ensure and maintain the food hygiene in coffeehouse, Lams coffeewill register license for food handler for those involved in food handling andpreparation such as chefs, cook and kitchen assistants. Further than that, LamsCoffee will provide the Basic Food Hygiene Course (BFHC) for kitchens staffs toimprove and enhance their knowledge and skill in food safety (Nationalenvironment agency, 2012).

Further than that, Lams Coffee to maintain the high standard of a Halalcoffeehouse to staffs/ employees to all the times, it requires for establishment tohave a Halal team with a management appointed leader, at least one Muslimstaff and relevant personnel from multi- disciplinary background. Other wise,Lams coffee will provide the halal training course (halal foundation program

me) for staffs to retain and ensure the standard of Halal certificate remainduring all the times in the coffeehouse (Majlis Ugama Islam Singpura, 2011).

4.2.8 Safety, Health & Insurances

4.2.8.1 Work injury Compensation

Staffs and employees is key success factors of Lams coffee, therefore it isnecessary to ensure the health care and safety requirements in workplaces.Lams coffee decide to sign up with MSIG Insurance Singapore within the workinjury compensation act will protect employees against work related accidentsor injury, medical expenses, death or loss of income during an employeesdisability (MSIG Insurance Singapore, 2007).

4.2.8.2 Fire safety

In order to maintain and enforce the high standard of fire safety in workplace,Lams coffee will coordinate with the Fire safety and shelter department (FDSS)of the Singapore civil defense forces regulate fire safety requirement in

buildings. Lams coffee can apply the license and permit for fire safety in


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buildings and ask for firer safety consultant for free advice in case of renovationof buildings (SCDF, 2012).

4.2.8.3 Public Liability Insurance

During the operation process, it can happen with some of expected problem.Therefore, in order to ensure the safety and long-term business, Lams coffeewill sign up with MSIG Insurance Singapore for public liability insurance toassures that having the compensations for claims for injury or damage Lamscoffee property by thirds parties (MSIG Insurance Singapore, 2007).

4.2.8.4 Fire Insurance

NTUC Incomes Fire Insurance Policy is a comprehensive of different policy interm of ensuring your business property against physical loss or damage by fireand lightning, flood, earthquake, volcanic eruption and others. Therefore, bysigning up this license that helps Lams coffee to against and reduce the negativeimpact on business (NTUC Income, 2012).

4.2.9 Terms & Conditions

4.2.9.1 Payment terms

The entire prices in coffeehouse s menu are charged in Singapore dollar withthe exclusive of taxes. It involves GST 7% and service charge 10 %. All typespayment can accept via Cash, nets, visa card, master card, America express and

dinner card.

Reference:

IPOS (Intellectual Property Office of Singapore). (2012).Types of IP: What istrade mark?

Available from:http://www.ipos.gov.sg/AboutIP/TypesofIPWhatisIntellectualProperty/Whatisatrademark.aspx[Accessed on July 1, 2012]

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Inland Revenue Authority of Singapore. (2012). Income tax rates. Lastupdated on 28 February 2012.Available from:http://www.iras.gov.sg/irasHome/page04.aspx?id=1190

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