Do-gooder blows $1m on hawker centre venture to help needy

Helping the disadvantaged can be disadvantageous.

For one well-intentioned man, it cost him a whopping $1 million.

That's what Kampung@Simpang Bedok, meant to help aspiring hawkers run their own business, cost Mr Lionel Lye's team.

The 800-seater, 10,000 sq ft, 32-stall place opened in 2012.

A food and beverage (F&B) group called Best of Asia, made up of 12 friends from various professions, invested $500,000 to kick-start Singapore's first privately-run hawker centre.

Mr Lye, a renovator, was the managing director.

A second group of sponsors pumped in another $500,000.

Mr Lye, 54, said of their not-for-profit model: "We need to have a place in our society where the less well-off can make a living for their families, learn to stand on their feet and be proud of themselves."

Initially, he thought of hiring former convicts after contacts from halfway houses told him about their struggles to land a job. But juggling their probation timing was tough, so Mr Lye worked with disadvantaged families instead.

Under his watch, a handful of tenants paid monthly rent of more than $2,000, depending on their financial background, and kept the profits.

Those unable to pay rent were paid a salary to operate the stall until they were able to take over.

The venture folded last October, before its lease with Far East Organization was up.

As the venture's personal guarantor, he may face bankruptcy.

HIGH PRICE

Another social entrepreneur, Dignity Kitchen founder Koh Seng Choon, also spent $1 million to run his hawker training school for the disabled and disadvantaged. It was, in his words, the "equivalent of buying a Ferrari".

The venture made a profit of almost $4,000 last year, more than three years after it started in 2010.

But the path can be rocky.

In 2009, about a third of the 73 social enterprises in funding schemes failed, The Straits Times reported.

There are about 400 social enterprises here, industry watchers like the Social Enterprise Association estimated. Covering a range of causes and business models, they are bound by the common aim to create social impact in what they do.

Mr Koh estimated he lost about $1,000 a day initially.

"People asked me whether I ever wanted to give up. Of course, I did. Every single day."

Another social entrepreneur, Mr Benny Se Teo, founder of Western food chain Eighteen chefs, said: "F&B people are crazy people. It's quite normal to lose $15,000 a month when you first start. Not everyone can take that."

WHAT WENT WRONG

Property experts like Mr Eugene Lim said it was possible to run up a $1 million tab, depending on the size and condition of the place.

"The amount is not a lot, especially if built from scratch," said Mr Lim, who is ERA Realty's key executive officer.

He was referring to the number of stalls, infrastructure set-up and renovation costs.

Said Mr Nicholas Mak, head of consultancy and research at property consultancy SLP International: "Operating costs can hit five figures every month, with expenses like cleaning, pest control, insurance, etc."

PREVIOUS EXPERIENCE

Despite having previous experience running a cafe, Mr Lye admitted that his naivety and lack of backup plans cost him dearly.

"Though everybody was telling me not to (run a social enterprise), I thought people would see the goodness in it," he said.

"But I ended up wasting almost two years of my life doing this without pay."

He faced problems such as stallholders operating when they wanted, buying ingredients for those who could not afford to, poor accessibility and being personal guarantor for the venture.

Despite the setbacks, Mr Lye hopes to share the lessons learnt with other entrepreneurs to create "an improved model".

He said: "You can't describe the feeling you get, seeing people's joy when they make money and know that they can fend for themselves."

We need to have a place in our society where the less well-off can make a living for their families, learn to stand on their feet and be proud of themselves.

- Mr Lionel Lye