MARKET ENTRY, F&B OPERATIONS, LEADERSHIP
Getting the F&B Math Right: Dave Acton Talks Market Entry with Covarage
CANnect Asia founder Dave Acton sat down with Covarage, the Singapore insurance platform behind the Emerging Risks 2027 report, for a wide-ranging conversation on what actually trips up F&B owners as they open and expand. The full interview is live on Covarage's site; here are the highlights, in Dave's words and ours.
The math has to work before the doors open.
Dave's first point is also his biggest: new owners underestimate how different F&B economics are from whatever industry they came from. Ingredient cost is easy to calculate. Overhead, labour, margin requirements and all the smaller incremental costs are harder to see, and get missed.
The same blind spot shows up when investors without F&B experience buy an existing restaurant business and treat the cash sitting in it as money they can simply take out. Pull too much capital out, or add fixed costs without adjusting the underlying model, and the business can't absorb the pressure. Raising prices afterward doesn't always fix it.
As Dave puts it in the interview:
"You can effectively price yourself out of the game before you've even started."
Labour costs more than the obvious hours.
Ask a first-time owner what their biggest cost will be and they'll usually point to rent or ingredients. Dave says it's labour, and not just the hours customers see.
A 12-hour operating day is really closer to 14 once setup and close-down are added. On top of that, someone still has to do the accounting, scheduling, sourcing, HR and marketing, whether or not the owner is standing on the floor serving customers. Internally, CANnect separates this into direct labour (the hours the restaurant needs open) and indirect labour (everything that keeps it running behind the scenes), and budgets roughly another third of direct hours for the indirect work. Recruiting, training and retaining people for that work costs more than most first-time owners expect, especially in a tight labour market like Singapore's.
Discipline is what lets a concept scale
Asked what the best operators do differently, Dave's answer is simple: discipline. Not a one-off standard, but the same process every time, whether the restaurant is busy or quiet.
Brands that run one way when it's slow and improvise when it gets busy never build the muscle memory to hold up under pressure. Weekly inventory counts, weekly stock valuations, a proper monthly close: these aren't optional extras to skip when things get hectic. A case of stock left on a delivery truck, or a gap in how alcohol or meat is tracked, is margin disappearing quietly. The brands that scale successfully are the ones where that discipline runs through onboarding, training, inventory and day-to-day operations from day one, not retrofitted once the business is already several outlets in.
A proven concept doesn't automatically travel
Covarage put a familiar question to Dave: if a Singapore brand has two profitable outlets, why not just take the same concept into Malaysia? His answer is that the obvious differences (halal certification, for one) are only the start.
Supply chains differ. Rent structures differ, which changes the P&L. Labour differs. Customer tastes differ, sometimes as much between Johor Bahru and Kuala Lumpur as between two different countries. A brand can work all of this out on its own, but it will make mistakes along the way, and mistakes cost both money and time. The advantage of going in with market-specific experience is learning from mistakes other brands have already made, rather than paying full price to learn them firsthand. It's the same principle CANnect applies across SEA+: a model that works in one market is a starting point, not a guarantee, for the next one.
The takeaway
None of this is complicated advice. It's discipline, applied consistently, before and after a brand decides to grow. Know the real economics before you open. Budget for the labour nobody sees. Run the same process every day, not just on the easy ones. And treat a new market as a new set of assumptions to test, not a copy-paste of what already worked.
Read the full interview on Covarage's Emerging Risks 2027 series, where Dave also talks through Singapore's F&B closure headlines and what separates a great chef from a great operator.
Wondering whether your own brand's economics would hold up to this kind of scrutiny before you open your next location, or your first one in a new market? Start with our Free Readiness Diagnostic.