Watch How The Black Hole Group Turn Passion and Creativity into an F&B Success. 

In this episode, the Chief Product Officer of The Black Hole Group talks about the formation and the beginnings of their company, and how it has expanded throughout Singapore since then. They discuss the creation and ideation of new concepts in the F&B industry, as well as mitigating costs with the establishment of a central kitchen. The effects of Covid-19 were also mentioned, and the learnings that they have taken away from the pandemic. 

The answers presented here have been summarized and simplified to make them easier to understand. For a complete and detailed explanation, we highly recommend that you watch the entire video podcast or listen to the audio podcast.

Q: Can you give us an introduction about yourself, and how you came into the F&B scene?

A: I would say everything started in 2013, where I was actually working with the founders of The Black Hole Group, so mainly Mustaffa and Calvin. They also landed themselves in F&B without really planning for it: they actually started a hostel and had to do something about the space below. They started a cafe there and I happened to be there to help with management. 

I was there for about a year and a half, then I went overseas to study. While I was abroad, I’ve always maintained contact with the two founders. In the back of my head, I knew that if I were to come back to Singapore, and if the two founders were still running F&B, I would love to join them. 

Q: Which brands are represented by The Black Hole Group?

A: While being abroad, I’ve always been deep diving into food even though I wasn’t culinary trained. I always cook for my housemates, and it was an obsession for me. Over the years, there was a lightbulb moment for me where I felt that a concept like Tipo Pasta Bar started playing in my head, and I was actually really excited about it. I told my two partners about this whole idea, and somehow everything came into place when I returned to Singapore. The Group was still in formation in around 2018, and I came in as a partner to run Tipo Pasta Bar, but everything came together and accelerated our growth during Covid. That was when we realised the importance of an overarching view on how we were running operations, and how to see it as a proper company instead of different individual brands.

Q: What is the vision of The Black Hole Group?

A: We’ve seen ourselves as not just F&B, but as a kind of lifestyle movement. We set ourselves as that, and with that we’re not limited to just working on F&B in that sense. For us, it’s all about really driving innovation, artisanal and creativity, and I think that’s what’s fun about what we do. I see ourselves as being immortal, having this kind of business model, because you could learn from the lessons of challenges that you’ve gone through, and give birth to a new face, with it being even better at every single aspect of it.

Q: Dividing responsibilities among the owners.

A: At different point of times, there’s different needs, so we’ve always maintained that we need to be fluid even within our own job roles. During Covid period, there was a need for us to really all gel together. For myself, I think it was important to really build the structures around operations, and as we built those kind of structures that was when we realised we’ve given ourselves leeway to look at other facets of the business, and to keep ourselves fluid. To always remember that whatever role that we’re doing, it’s more to build a structure and to ensure that you can put in systems and processes within it, so that it can run like clockwork. 

Q: Obstacles or successes encountered?

A: A challenge and also a success in a sense is the pandemic, I would say. With any other business owner, the pandemic was really not an easy period to go through, and for us we had about seven different shops. It was super tight and quick decision making was needed, and I think for me one of the wins at that point of time was really being able to have a bit of foresight to not be late in terms of jumping onto the right platforms such as Grab. We were in it a bit earlier, so by the time it came to really crunch time we already had all these systems going. For us, we had to temporarily close four our of seven shops, and combine all the menus and do delivery because we realised that if you were to run all the restaurants as single entities at that point of time, you will drown against everyone else. It’s for survival at the end of the day. And at that point, that wasn’t even enough; we had to give really ridiculous discount mechanisms to get the public’s attention. At the end of the day, it wasn’t about surviving, it was about keeping the cash flow and keeping all the stuff within the group. 

Q: Lessons learned up to the present?

A: Covid has accelerated digitalisation on so many ways. Before Covid, we were running the establishments individually, so it’ll mean the depot would be running a different POS system, Working Title will be running another one. Covid was the wake up for us to really decide what the main POS that we’re going to use, so we ported over to that, made sure all the other platforms and systems were integratable with each other, and then from there it gives us a good viewpoint in terms of our data. It helps us with how we move forward. I think the most important is your main one, then the other platforms that you use, whether it be reservation system or accounting, to be integratable to that main one.

We’re consistently looking into digitalisation as we grow different parts of our business. We’ve always wanted to have our own bakery and pastry kitchen, and recently it was also joined together with the pasta production, centralising it. With that, it goes into logistics management as well, and the importance of digitalisation is always there, it’s how you capture when you’re ready, and also how to keep on improving. 

Q: How do you determine the right time to establish a central kitchen?

A: I would say we’ve never been a super metrical kind of company. It was intuitive in that sense where when we set up a new outlet, the decision is whether we are going to make pasta there, how do we quality control for example, so we would have just done it at the main outlet. But then over time, you also start realising that you can’t be a supplier from there because you are a restaurant. Other opportunities also came about when during Covid period, there were other businesses that were reaching out for us to take over their spaces, and I think we usually go for that kind of model rather than look for a best space to do it from scratch. It’s helped us a lot as the infrastructure is already set up.

Q: Cost advantage when taking over existing infrastructure?

A: There is actually a huge significance in terms of cost advantage. I would say, if you are to set up your own, you’re looking at the infrastructure as well as the electrical and water points, and all that can easily go up to $300,000 whatever size it is. But with a takeover, it depends but you can go less than a $100,000. One thing great is also we’ve developed subcommittees, so people have different roles. For example, someone that does branding and marketing, they would also look at the whole design aspect, so we really put a bit of attention on customer experience as well. A few projects that I would say we’re proud of we didn’t even use a designer or anything like that, we designed everything ourselves.

I have a brother who’s an architect, so for example Tipo Pasta Bar we had a very narrow shop at that point of time, and I was asking him “Hey, how can I let people know that this is a pasta shop?”. Then, he told me that since people hang chicken when they sell chicken rice, we can hang pasta. It’s beautiful, it works, and people look and they see the pasta, and they feel the pasta, and it creates the experience. So I think that kind of input from a person who’s really well-versed in design really helps us with this kind of design process. 

Q: Does The Black Hole Group implement KPIs for each store?

A: When we started, we’ve never been a metrical kind of company. I think what was important to us was how we push the boundaries of creativity and innovation, but also as we move along we also realise creativity can’t just run without certain structures to it. So we have certain rules loosely set, but also tightly followed. The important ones are of course, your cost of goods and also your cost of labour, that would make up your main cost, and with that we do set certain targets for it. Because we didn’t have any F&B background, we don’t have a reference point, and we can set something and make it a reality. For us, we tend to set it at around 22% because we make our own pasta. But of course, now you’ll have to balance it with cost of labour because more people are making the pasta. So it’s a fine balance that we have to play around with: for places with low COGS, we allow the cost of labour to be a bit higher, but it has never been flat all throughout, it’s more of a rule of thumb. And we’re quite firm on this, mainly because the rising cost of rent and all that, so keeping a bit of leeway for other parts of the overheads.

Q: What is the expansion plan?

A: We’ve also been very fluid with our expansion concept as well. For example, we see Tipo Pasta Bar as a brand that has potential. But instead of duplicating it, we look at it as an opportunity for us to diversify a working brand, so like Tipo Pasta Bar, we had the idea of doing Tipo Pizzeria instead. Having the same kind of concept and kind of diversifying the kind of clientele that we have as well, because what we learnt in Covid was that every segment of the market was affected, and it’s important for you to really diversify.

Q: Goals for 2024 and 2025

A: I would say to slow down. I think the past few years have been quite pivotal for us to really make all the big moves, and that growth was mainly done for survival. But I think looking at 2024, looking at the market trends, I think people are tightening their strings, so for us we’ve got other opportunities ahead of us, but we’re also realising to slow down because we’ve expanded rapidly. There are so many parts of the business that can be tightened up on, and this is where we look back at our system processes: how do we keep our efficiency levels, but also not lose sight of what’s up ahead. I think for someone like myself that looks at group level innovation , all of these need to move on. Still need to have those dreams there, because when the opportunity comes, you’d be able to know where to plug and play.