Location & Property
Understanding Rental and Labour Costs in F&B
Why rent and manpower are the two costs that shape most F&B business models, and how operators plan around them.
Draft prepared · 2 min read
Editorial draft — not yet reviewed for publication
This general guide is for information only and is not professional, legal or financial advice. Always confirm current requirements with the relevant authorities.
- Confirm any references to manpower regulations against current Ministry of Manpower guidance before publishing.
Ask most F&B operators which costs keep them up at night and two answers come up again and again: rent and labour. Unlike ingredients, both are largely fixed in the short term — they have to be paid whether the day is busy or quiet.
Rent: more than the monthly figure
When evaluating a lease, look at the total occupancy cost, which may include:
- Base rent
- Service and maintenance charges
- Promotion or marketing levies
- Turnover rent, where a percentage of sales above a threshold is payable
- Utilities arrangements
- Reinstatement obligations at the end of the lease
Compare that total against realistic sales for the site. A useful question is: what level of daily sales does this site need just to cover occupancy? If that number feels optimistic, the site may be too expensive for the concept.
Labour: plan the roster around demand
Labour cost depends on how many people you need, for how many hours, and at what times. Practical approaches include:
- Mapping sales by hour and building rosters around actual peaks rather than fixed shifts.
- Simplifying the menu and prep so fewer people can deliver the same output.
- Cross-training staff so the team can flex between counter, drinks and kitchen.
- Investing in training and retention, because frequent turnover brings repeated recruitment and training costs.
Manpower rules and eligibility requirements for hiring can change, so check current requirements with the relevant authorities when planning your team.
The two costs are linked
A cheaper site with low footfall may need more marketing and still not fill its rostered hours. A busy site with high rent may require a larger team to capture its potential. Evaluating rent and labour together gives a more realistic picture than looking at either alone.
How we can help
Rental assumptions and staffing structure are both part of our feasibility and setup work, and labour planning is a focus area in our operations reviews.