Thomas99

12 hours ago, ableguy said:

Seems to me a pretty stupid question, why can you not figure out the pit falls your self, if indeed you as bright as you claim, opening a coffee shop and hoping to make money would be akin to opening a Sam tom shop in Los Angeles.

Go and bring your useless comments elsewhere, you are not welcome in this thread. Thanks.

1 hour ago, NiwPix said:

Reason I asked about how many hours, was mostly because I was a bit surprised you calculated 15,000 for an employee / worker ( not your friend / sister ). Paying an 'outsider' 15k doesnt really get you any loyalty. Keep in mind that the salaried employees also get paid for their days off and get paid overtime if working more than 8 hours. So, besides paying the employee 500 Baht per day, you'll also be paying overtime ( x1.5 ). We'll talk about this when you're at that step :).

Lets go over your calculations ( By the way, forget about  paying / collecting VAT. You only need to register VAT if your YEARLY SALES are over 1.8 million ).

 

Premises

17,000 rent <--- Clear and straight forward

3,000 bills <----Your water and Electric alone probably will be this high or higher. Depends a lot if you pay your electric to the electricity department directly or to your landlord ( increase unit charge ). You'll also have an Internet Bill ~700 Baht and a business phone bill ~300 Baht.

3,000 miscellaneous costs <---Call this one repairs and maintenance ;). Blender broke. Need a new one or replacement parts ( happens quite frequently ), Coffee Machine maintenance and wear and tear parts need replacing. Water filter needs to be changed. Cash register paper, pen and paper to write down orders. Silverware disappears / gets lost, needs replacement. Coffee cups chip / break. Staff decides not to come to work anymore after payday and doesnt answer the phone anymore...need new uniform again. 3000 a month is cutting it close.

2,000 buffer <--- This can probably safely be added to "miscellaneous costs".

-Advertising/Promotions? ~1000 baht / month?

 

Staff

15,000 each (3 staff), including taxes etc. <--- Friend and sister 15k salary ok. outsider staff its too much and prooobably not even needed.

5,000 buffer <--- you can save this buffer. Salary is usually pretty straight forward and with 45k for 3 people you are already on the safe side.

 

Fixed cost

25,000 Premises <---- go with at least 30k here

50,000 staff <---- 45k is good enough

TOTAL FIXED COST 75,000 <---- still the same number :)

 

Opening days 25 per month

Projected turnover 5,000 per day

TOTAL MONTHLY TURNOVER 125,000 <---ok, lets work with 5k a day and see how much a day you need to sell to reach this number

 

At an average price of 50 Baht per coffee, it would mean you'd have to sell a hundred coffees in an 11 Hour period ( or 9 coffees every hour ). In a perfect world, 1 staff should be able to handle 9 coffees in an hour ( 7 minutes time for each coffee ), however, you'll have times you wont sell any coffee and times you'll get 3 or 4 orders at once. People are ok to wait a little bit for their coffee IF the coffee is worth waiting for ( quality and staff are important here ). Otherwise they can go to the next coffee shop around the corner and get a coffee. 2 staff are plenty to handle 100 coffees a day. Especially with time, it'll flow like clock work. You wont sell a hundred coffees a day at the beginning, so friend and sister have time to work things out.

 

Now, the important thing.....consumables. You'll be surprised how quicky this adds up. Based on 100 cups a day and 1kg of coffee beans costing ~350 Baht

Just the shot of coffee / Espresso will cost you about 7 Baht. If it is a hot coffee ( Latte / Cappuccino ) add maybe another 10 Baht. The customer may add sugar. and the cup/lid/spoon will cost about 3 Baht. The hot coffee you're selling will cost you about 20 Baht. You're selling it for 45/50 Baht.

Iced coffees are a tad more expensive to make ( Again, depending on your ingredients and recipe ), but say about 25 Baht. You're selling it for 50/55 Baht. As a rough guide, you're selling it double of cost ( You'll have spillage and mistakes ).

Selling 100 Coffees will bring you 5000, but cost you 2500

 

Daily cost:

2,500 + ~60 Baht for daily Ice delivery.

2,500 x 25 days = 62,500 + Ice 1,500 = 64,000 consumables.

 

Your cake margin wont be much better either. Buy for 20-30 Baht, Resell 40-60 Baht. Sodas / Softdrink margins are even worse. Try minimize the sale of Sodas....You can still make an ok margin on Water though.

 

64,000 Consumables + 75,000 Fixed = 139,000. Your income is 125,000  = -9,000

Cut down the third employee and you may make a bit of profit.

 

Thanks. I read it all and will go over it tomorrow again.

5 hours ago, varun said:

I would revise your average projected daily turnover to 3,000 THB

Assuming an average selling price of 50 THB per cup is reasonable.

 

Initially, the staff will have a learning curve, and their efficiency will be low i.e. no. of drinks they can make per hour

 

There is one major flaw in your estimates.

You haven't calculated your Cost of Goods / Materials that will determine your take-home i.e. profit

 

 

 

Thanks, point taken about the 3000 daily turnover. Actually I have included that cost of goods (20000 for consumables + VAT), to be deducted from the 50,000.

I'll wait for NiwPix to reply and make another projection. Your further feedback on the line above will help me inform my other projection.

If turnover is only 3000 then staff may need to be 2 people (the two sisters owners). No external addition, is it reasonable?

5 hours ago, NiwPix said:

I'll reply in more detail later in the evening, but what do you think your opening hours will be and the locations you looked at: current business or empty? Foot traffic or on the street side ( parking?)


Sent from my iPhone using Thaivisa Connect

Thanks.

Opening hours (flexible, as needed, say 7:30 am to 6 pm?). Am thinking of 6 days per week, but if staff is on rotation maybe 7 days is possible.

Location and 'current business or not' also flexible. Currently am looking at existing businesses, aware that if something is up for sale value needs to be added to it to make it worthwhile, starting new is also a possibility.

I'd like something below a condo, or anywhere. Surely if location doesn't look suitable I wouldn't bite, as I don't want to support the thing for ever.

I think given the lack of experience of everyone involved it should be trafficked enough to generate revenue, but not madly busy otherwise thinks would go tits up in minutes.

I realise my question is very vague, but just want to know if a adequately positioned, smallish shop which keeps three people busy being open 11 hours a day would be able to produce a daily income of 5,000 and if the costs I mentioned are correct (I have some doubts about the 20,000 for consumables + VAT, maybe too low?

OK, have seen a couple of places and would like to submit the following budget projection for general revision:

Aside from the start up costs, which I would cover, this is how I picture the rest.

Context:

- 2 owners (thai) + 1 staff working in the cafe = 3 salaries to pay

- small medium sized place

- Serving standard coffee shop fare, basic bakery, soft drinks, maybe ready made salads purchased elsewhere.

Monthly expenditure:

Premises

17,000 rent

3,000 bills

3,000 miscellaneous costs

2,000 buffer

Staff

15,000 each (3 staff), including taxes etc.

5,000 buffer

Fixed cost

25,000 Premises

50,000 staff

TOTAL FIXED COST 75,000

Opening days 25 per month

Projected turnover 5,000 per day

TOTAL MONTHLY TURNOVER 125,000

MONTHLY TURNOVER (125k) minus SALARY AND PREMISES (50k) leaves 50,000 to play with.

Now subtract consumables (food, coffee, pastries) and VAT (on 125k) for a total of 20,000.

Remainder: 30k/monthly to be reinvested or to be redistributed to owners as dividends.

If daily turnover is 4,000 per day it's break even.

This means that the shop would need to have a daily turnover of 4000-5000k to survive.

I can cover start up costs and initial losses.

Is the above making sense? And how do you make 4000-5000 every day? Is it feasible for a small medium sized cafe?

It's above 50 cups of coffee give or take.

Thanks in advance.

6 hours ago, fordguy61mi said:

You say you're not banging her and I believe you, but there is a connection. Why her? There are a million girls in her situation. There is something there you aren't telling us. It doesn't add up. Sorry.

Ha ha, I'll leave you with the doubt :)

5 hours ago, jeab1980 said:

It doesnt matter wether hes in a relationship with her now or in the past does it. The main point is hes trying to help her for reasons of his own. 

Yep, just feeling good about it, don't wanna die rich and have plenty of banging to do anyway.

4 hours ago, tpkhk said:

Thomas99 - If you are looking for leads on businesses for sale - 

 

- Try Asia Business Brokers (website).  All sorts of businesses.  Matter of fact, the due diligence should yield a good picture as to the issues etc.  Many will be dressed up, but as you keep talking to various sellers, a picture will emerge.

 

- Craigslist Thailand - Under "Business/Commercial - By owner"  

(Lots of bars/hotels, but for instance advertising a Kebab stand).  Here are some sample details;

"Rental fee 25.000 baht/month
1 months deposit. 
Monthly income 150-180000 baht 
Shop still running and open all days And also get orders via foodpanda.

Asking 400K, and negotiable".

They have a Thai contact as well as an English speaking contact.

 

- Sunbelt Asia. (they have a business broking section too).

 

- MLM (Multi Level Marketing) has a bad connotation, but maybe worth exploring some of the better established ones.  If one can succeed in that field, everything else becomes easy.

 

- Meetup (the forum) has several Business Idea/Startup groups.  Maybe a good idea to join/view it as a support group.  If this is absolutely her first time looking at a business, maybe beneficial for her to work with a friend/relative.

 

Good luck with this - you seem very committed and aware of the risks.  If you guide/steer your friend and let her do all of the data gathering work, vet it thoroughly, that process itself will be a great learning experience for her.  

Thanks all very useful. Yes, she is doing all the data gathering, in thai and it does seem to be a very good confidence building and learning experience indeed.

1 hour ago, Destiny1990 said:

Just give her the money and so she decides all her self seems is the most fair Solution.

I don't agree with this one. Try giving a child 500k and see what you get. She is not a child but in terms of fitness for doing business in the big world she is a bit like that, she needs grooming, building, steering, material support and I need to assess whether she deserves all that.

Whilst I am prepared to lose all, I am not throwing money away like that (someone else may benefit from this if not her).

And - I did not pick her at random - I know her for a while already, I know her family and so on.

Thanks to all for the advice and thoughts, this is very useful and entertaining indeed :)

On 5/26/2017 at 10:55 AM, NiwPix said:

I dont think you'll need to invest 1 million to get it started and operating. half of that should do it. Then covering the losses for the first few months...which shouldnt be too much. As your customer base grows, losses should shrink and eventually turn into profit.

Your biggest investment will be a coffee machine. You'll spend about 100k on it. I wouldnt go for the 40-50k ones for various reasons, but thats a different topic ;). Also, it is the one thing I would recommend to buy new, unless you know the history of the used coffee machine....was clean filtered water run through it at all times or was it tap water? HAs it been serviced regularly?

Cake fridge, used but fairly new in great condition should cost about 30-40k.

These are the one time high ticket items I can think of. Then you'll get tons of small ticket items that will add up + remodeling / furnishing the new place. So my guess is about 500k investment. By the way, the business license for sole proprietorship doesnt cost much...I think 200 baht if I'm not mistaken. No need to hire a lawyer for that nor an accountant. Just ask the department(s) whats needed and how to fill out.

 

Finding the business: Obviously there are many outlets for people to post their business for sale. Being in Thailand, most business will be thai owned and advertised in Thai, so searching in Thai language would be best. Of course it wouldn't hurt to search in English. Just google "Business for sale Thailand"...that should get you started.

 

If you take over an existing business, you have the right to find out all the numbers...income, expenses, profit, recipes, salaries, customer base, suppliers, contracts / commitments ( Nestle loans a freezer chest if you buy their ice cream, coca cola gives a fridge if you buy a certain minumum of their products etc ). If the place come with a coca cola fridge and nestle freezer, you certainly dont want to count that as inventory. Just keep in mind you most likely will get not so accurate numbers. IE: The owner orders 10kg of coffee beans and pays 5000 baht. He pays the supplier and the bill gets thrown in the trash and not entered as an expense. You would never know that expense occurred. Or he claims 300k sales every month, but the cafe often seems dead or just very few customers....does he really make 10k a day?

Basically, you have the right to know as much about the business as the current owner. With some negotiation the current owner may stay a week or more to help the transition.

 

Good that you're keeping it small and dont need / want to hire staff. The high turnover in the restaurant industry is ( I think ) due to it being a low status employment. Quitting after a few weeks or months maybe saves face? "Oh, they werent paying me enough" or "There was no opportunity to grow, so I quit"....if their statements are true or not is a different story. Also, I myself am not 100% sure that that is the reason...just a hunch :)

 

As for apprenticeship in Ubon...not a good idea for two reasons:

1) Ubon is different from Bangkok. People are different, tastes are a little different, salaries are different. Stick with a place in BKK

2) While I like helping when asked, I do not knowingly hire short term staff anymore. I noticed I get quite a few comments from customers that "oh, you have a high turn over rate" etc. While it shouldnt be any of their business how I run my business or what happens behind the scenes, people always will judge by what they see. So I keep my "turnover" as low as possible.

Thanks for all this. It's all very valuable info, I'll save it. No problem for the apprenticeship. I will private message you so maybe if this project moves forward I'll ask you some more specific questions. Nothing overly demanding, don't worry.

On 5/26/2017 at 11:23 AM, ianf said:

The coffee shops that work are the ones that are well-located or have low overheads. Consider this: In Chiang Mai there are 100s of coffee shops. The ones that seem to be effective serve a limited menu of food as well as a wide range of drinks. The ones with customers also have some 'extras':

1. Kids' play area, safe and fun with perhaps sand, bouncy thing, swings and so on.

2. A theme to attract people with a particular interest: cycling for example so cycling groups are offered small discounts, cycling videos etc (many ideas here)

3. Good quality and unusual ice cream (not nestle/walls!). Or other nice cakes that are home made and not the standard fare you find in every coffee shop!

4. Starbucks in Chiang Mai Central Plaza is packed to the gills: but their coffee is hugely expensive and not tasty. Why do peeps go there? Do a survey and find out?

5. A meeting evening for singles (we're not talking sex here)

Anyway: Good luck

Remember that a successful business always has some charisma that the opposition lacks!

Thanks. I am aware of the charisma. To not make it a waste of time some value needs to be added. Some good ideas there.

On 5/26/2017 at 11:33 AM, theguyfromanotherforum said:

All these women started dirt poor and didn't have any help whatsoever. The point is if the lacks passion the business will be a failure. Personally I think a coffee shop is a really dumb idea. Like others have said if she was smart she wouldn't be working at the mall. Maybe you just feel sorry for her and want to help. I think a degree would be a better idea than a coffee shop. My wife certainly makes decent money from it.

 

Good luck.

Agree, passion needs to be there and I am looking for it, not only for a week but a persevering willingness to succeed, the thing is that for girls like these there is a substantial waking up to life that needs to be done, it seems there is some kind of apathy. However I see something hidden under there which may be brought to light or maybe not. 

If I wanted a middle class life with car, house and job I would not be here. I rejoice trying to make a difference and once this is done' I'll try again.

As for the degree, this was tried but didn't take off.

On 5/26/2017 at 0:29 PM, stephen mills said:

Hello Thomas,

You can reach me at [email protected] or by phone: 0617027642 if you require additional information 

my name is Stephen mills and my wife's name is Ngam. She will be answering the phone, in case your friend wants to chat with her.

 

 

Hi Stephen, thanks for this. It's a longer step that I am prepared to take for a number of reasons unfortunately, but it does sound like a very good thing for someone in the right circumstances.

On 5/26/2017 at 0:39 PM, dundas said:

I have some practical experience (risks, pitfalls, etc, and likely outcomes) I'd be happy to share with you if you PM me, as I have spent some years helping a Thai person set up a retail business.

 

Done, thanks!

On 5/26/2017 at 1:08 PM, JOC said:

Have a friend (Thai) who recently opened a tea-shop.....Nothing to do with real tea, but the Thai version....fancy colors and most importantly the plastic cup with a lid and a straw.....Price for all drinks are 25 Baht.     She is in an average location in Hua Hin (rent 10.000) and is selling about 100 cups/day....little more than half is profit (rent not included). Investment cost very low...see link

So OP this might actually work for your friend....she will get some help from the franchise owner.....cheap is good (customer)   low investment (sponsor)

 

Have a look here.....https://chobcha.com/?page_id=21

Thanks a lot, encouraging. It's earmarked.

23 hours ago, Kinnock said:

Ah, the classic 'Thailand Challenge" - how to help someone to set up and run a sustainable, profitable business?

 

Unfortunately in this country only the rich get richer, so it's tough to find a niche where a normal person can make a viable living, but there are some business that can provide a livelihood - and here's my personal thoughts on how to make it work ......

 

Coffee shops can be viable - the margin on coffee is decent for an F&B operation, the capital outlay is reasonably small.  Obviously it will be iced coffee, and the local ice suppliers are low cost and they deliver - so your primary ingredient by volume is low.  There's a very well developed food industry in Thailand, so consumables are easily available at low cost too.  So your biggest cost will be rent (assuming it's not a franchise operation - and unless you're going to invest in a string of quick service restaurants, I'd avoid franchises, as most only make the franchise owners rich). 

 

Location is everything - so you need the right balance of paying for a good location, without the sky high rents of a mall location.  Most shop houses are in the wrong place for a viable coffee shop - which is why most of the small shop-house coffee shops fail.  Look for a small unit in a large condo development.  The customers will be local .... very local ..... so you need a high traffic area in the base of a large condo development.  Rents are often reasonable, and as your catchment is highly focused, competition is not a big risk.  Try to negotiate an exclusive agreement - "I'll take your unit for a12 months, if you guarantee in the contract that you will not rent to another coffee shop business in the condo".  Some condo units include living space - which will save on rent for housing.

 

If you can't find a suitable condo unit, look for a house in a popular moo-ban development, get a unit on the corner of the main drag, and open the coffee shop there.  A bank loan for a house for a Thai can be had for low interest, and paying to own a house is better than rent - and if it fails, just hand the house back to the bank.  Just make sure you are not the guarantor!

 

Add extra services - sell food, noodles, daily essentials etc - the local 7-11 may only be 25 meters away, but many people will prefer to go to the local 'in-condo' shop as that means you don't need to venture out in the heat.

 

Thanks a lot for the well thought advice, which I agree with.

On 5/26/2017 at 3:08 AM, lkn said:

Probably if they think that you are serious, but for you to prove that, may require an initial payment.

 

Though for starters, you can go to the place and stay a few hours to see if what they claim seems believable, i.e. number of customers, orders, how much staff is working (salary expenses), and you can probably get a good guestimate of rent and electricity.

 

I don't expect to see anything resembling the truth, but still think that out of many lies one can build a picture of what is going on. After all, if a business is for sale it'll be not a good one. The trick is to add value isn't it.

Yes, the idea of sitting there a few hours a few days is already in the list, and so are the cakes :)

On 5/26/2017 at 6:21 AM, kenk24 said:

Thomas - I don't know that you can introduce an entrepreneurial spirit or desire into a person. Without that inner spark, it is not destined to go well and even with the inner spark, there are many hurdles to success... If you look at the general population, most people are worker bees and they would not be happy with the weight of a business to run... you might be just setting her up for failure and that might ultimately be a more unhappy experience... go for happiness instead. 

 

You probably see a discontented worker and [isn't that most people] and want to do something to help her out and are kindly willing to use your funds to do this... but, maybe there are other ways to use your funds to accomplish this to a limited extent... if the idea is to make her life better and happier, find something that she enjoys, it does not have to be connected to productivity and advancement as we see it in Western terms. It could be a vacation or a trip home to visit her kid, or even a nice television set... since the idea in a larger sense is to use your funds to make her life just a bit more pleasant... if you are not sure - ask her... if you had $xxx - what would you do? 

Good thoughts, which I am understanding. Have done the holiday thing, and have done the motorbike gift and the visit home. Now it's time to take it to another level and check out if she can make a leap forward in terms of how to make a living.

I see some potential, limited to a small shop enterprise, but I want to see her at work.

In fact - and I have explained this to her - the whole enterprises rests on 4 pillars:

1 - Work on her first, make her able to deal with people, customers, suppliers, law enforcements etc. She is getting it and within her limits she is showing signs of improvements. I am steering her, pushing her to organise her lists, ask the questions, process the data she collects and explain strategy.

She has now got the concept of shortlisting places etc.

Once the basics are in place, then she can focus on the art of coffee, tea and other stuff. This will include training, apprenticeship.

If she passes all this then step 2 can ensue.

2 - Find a place. This will be fun. Looking for low rent (I'll be paying the rent for a long time I fear) and location location location. No cooking involved, and no factory line coffee making.

3 - Kick-off the whole thing, and allow a few months to adapt and change as required, and see how the skills emerge and settle in.

4 - Run it and never stop adapting.

So, what ultimately matters is happiness but this is time to think about getting a job. I think that working in a mall or serving in a restaurant is not as good as running a non-profitable business that I'll be supporting in the background by starting it, steering it and paying rent for.

On 5/26/2017 at 6:31 AM, steven100 said:

If you don't open it in a populous area such as Sukhumvit you will not succeed.

At the end of the day there are only 2 outcomes .....   success or failure ...  now if she is as smart as you say then that's a great start.

Just get it going in the upper Sukhumvit area .. say soi 23-39 ... somewhere in that region and go for it .....  don't pick into all those questions too much ..... just do it .

I think the sois you mention are still too expensive rent-wise. More likely soi 71++, but yes start off with something and adapt as needed.

On 5/26/2017 at 7:45 AM, DoctorG said:

If you are dead keen on the coffee idea then she must have some experience going in. Might I suggest a short barista course in BKK coupled with a few months coffee shop employee experience?

 

Anyway; it's your money. If you want to throw it away to make yourself feel good, then that is all good. Best of luck to both of you.

Agreed with all, thanks.

On 5/26/2017 at 7:56 AM, yellowboat said:

Invest in her education.  Get her to learn a trade or skill.  That builds confidence and puts her in contact with like minded, and hopefully, successful people.  As many have already said, you are taking a huge gamble in a saturated sector with no experience. 

In some way this is what I am doing, get her to learn a trade. Academic education is not a suitable option in this case I am afraid. As for the huge gamble, I can afford it and the expectations are low, so risk is, technically speaking: 'medium-high probability, medium-low impact'.

On 5/26/2017 at 8:02 AM, williamgeorgeallen said:

so the general consensus is that it is a bad idea and i would agree but if you have money to throw away on a social experiment then why not? have come across this topic a few times and the best advice i have seen is to get her to go work in another coffee shop for a while. there are so many reasons to do this. learning the ropes is alone good enough reason and seeing if the lifestyle suited her is another. if she does it for a year then reassess the situation. see if she is happy and move on from there.

Point taken, see my four step approach above.

On 5/26/2017 at 9:15 AM, Kwasaki said:

OK you know not how get a business up and running and neither does your friend you want to help l take it.

If she is Thai it would easy for finding out with you at your local gov province office.

Then get a experienced business consultant.

Goodluck.

 

Thanks!

If just talking about it gives her a headache , she is not going to last long ,

if she cannot do numbers in her head ,  she is going to have problems ,

 

You will see another side of her when she has to make decisions ,  and if she just skims over things like it does not matter because its YOUR money she is playing with......

 

and one last thing , you understand that you are never going to see her again ,  maybe not that bad but if it works she will be doing 10-12 hour days and have no energy left for you :)

 

Have fun shopping .....

First two paragraphs, yes I am doing this and watching, and she knows it.

Third paragraph: ha ha, that's good. I need my freedom, and I like to have a pet project like this on the side. I'd be at the shop more often than you think and she'd end up kicking me out. Make no mistake, I am doing this for her too, I want her to make a living through her own work in a dignified and autonomous manner. Autonomous from me too, I'd step out of things if I see I am not needed that'd be the most rewarding outcome for me.

On 5/26/2017 at 9:52 AM, Rimbuman said:

Running a coffee shop is not that difficult at all, anyone with a bit of motivation can learn to do that.

Motivation would be the motor of the whole idea, reasons and excitement, etc what this motivation is build on eventually determine the end result. If you want to stand out as a business you'll have to be better and more appealing than others.

Theme of the interior design can be a major contributing factor for a successful coffee shop, Chiang mai has quite a few examples like that. Also selling quality bakery goods to go with the coffee is generally a good think to do.

The one thing that I consider as being most important is the purchase of a good quality coffee machine and the know how of the art of making excellent coffee.

Serve your customers with genuine vibrant Thai hospitality and you'll have winner ;-)

 

Wish you good luck and success Thomas

 

Agree wholeheartedly with all your points, especially with the wishes at the end :)

1 minute ago, oldcarguy said:

I have said this on many threads like this ....

 

That I wish there was a business plan template already made up  that you could add too or cross some things out ,

 

it may not be perfect but it would give them a starting place to think it out.....

 

just one thing probably not mentioned is what do you do with "old" coffee after a couple hours , same with other stuff that is left over,

it is a cost with no payback  , 

 

So if you are really going to do this ,  share with us the list of expenses  you can think of , and also what extra things she can sell that go with coffee  like cake or cookies ,   and  even things like nail clippers and hair clips, something she can hang on her cart etc

 

my friend buys nailclippers for 5 baht and sells for 20 baht at her small store.......small "earners" like that add up....

 

Post the expense list when you make it , with or without numbers.....

 

 

Tx, when I get to the expenses list I will share with you, maybe not publicly.

A business plan will be produced too.

I'll eat all the leftovers :) :) and pay. ha ha ha

3 hours ago, oldcarguy said:

Buy her a motorised sales cart , or just a sales cart she can move around ,  USED one is best

 

then sell something like shaved ice ,  CoCo , smoothies , anything BUT Coffee

 

Find a place to park the cart , next to a factory is great  and be there  at least lunch time and end of day,

she needs foot traffic to sell enough every day...

 

if whatever she is selling does not work , repaint cart and try something else.

 

I think a place in the Mall has too many rules and too high overhead / fees

 

Good Luck ,

 

 

Many good points introduced here. Variety of offer (I had thought about that), flexibility, convertibility and low costs.

I guess some complications regarding license, street food laws and territorial disputes with existing sellers possibly.

I'll keep it in mind, and it could even be an addendum to the base cafe, when the millions are flowing in, ha ha.

3 hours ago, NiwPix said:

3 hours ago, NiwPix said:

Well, I'll give it a shot :). I will just hope this really is a genuine post and my reply is not a waste of time.

 

It's a genuine post, and thanks for the time, the first that gets entirely the point of my post.

3 hours ago, NiwPix said:

1. Where to start?
Budget. How much money are you willing to invest / loose. What type of coffee shop are you looking to open? Only coffee? With some food or just some cake and bakery? Only drinks?
Depending on these answers depend big part of your budget. Also how big should it be? Do you want her to work on her own or with 1 or 2 staff or a coffeshop with several baristas?

Actually on the budget side I am comfortable managing it. 1 million doesn't scare me, but I hope it will be less overall. I am careful but not stingy. I spend when I want to spend.

Coffee, cakes, but also drinks and salads why not. Maximum flexibility. Also thinking of offering an area for meetings maybe, with chargers for computers etc (so people hang around for hours without spending any money, ha ha).

As for staff, no ambition, as little as needed, she'd be with her sister. And I can help with budget, strategy, errands.

Actually my question was more aimed at, where to find businesses, through agencies any specific direction?

3 hours ago, NiwPix said:

2. Given the lack of previous experience it would definitely make sense to look for something that's already established. However, since a small coffee shop is fairly simple, it would be best if she works at a coffee shop somewhere for a few months. It would help aaaaaalot.
 

Point taken.

3 hours ago, NiwPix said:

3. Which target group? Don't count on the farang. They are a minority here and don't have much influence in bringing friends and family to the shop. And many come and go. Unless you'll be in a tourist area, where your shop just needs to look appealing and clean. In that case you could do well with foreigners / tourists.
I would however stick with focus on Thais ( but keep it convenient for foreigners as well...ie English menu as well ): Thais are a majority here ( d'oh :) and usually have friends and family around...post pictures etc on social media. Treat them well and they'll be long time repeat customers.

I don't agree totally here. Certainly wouldn't target tourist farang in Kao Sarn or Lower Sukhumvit, but residential areas with farang, are an indicator of thai wealth which allows prices to go from 30 baht for a coffee to 50 baht and are more likely to see thai people walking in as they can afford it, have the time to sit around or maybe have a meeting.

I was thinking of a place below a large condo in a residential area (On Nut?), with a daily flow of commuters, thai and non.

3 hours ago, NiwPix said:

4. Questions to ask? Do you mean if you want to take over an existing business? If that is the case, basically the common sense things:
Monthly income ( you'll probably receive a bit higher number that actual income or the highest number the shop ever made.
Monthly expenses: be prepared many things won't be mentioned and you'll definitely have more expenses in the coming months.
Accounting cost will be veeeery low. Don't worry about it ( unless your planning a big scale coffee shop and making it a company )

5. Besides a business license ( you'll probably go with sole proprietorship ), nothing I can think of. You miiiight need a health department license, but not sure if a coffee shop needs to have it. Costs roughly ฿3000 per year.

Thanks. Do you think one could hope of seeing some evidence of sales and costs? Or that's too much to expect?

What is usually a reasonable question to ask regarding running costs and revenue? Monthly? Daily? Yearly?

And do you ask about gross revenue or profit, or both?

3 hours ago, NiwPix said:

6. Mafia / police could care less about a small coffeeshop ( as far as I am aware of ). They're more interested in the alcohol and prostitution side of things.
Make sure the building you are renting is leak free and that the electricity can support several electrical items ( coffee machines use ~3000 watt. A cake fridge about ~1000 watt ) that itself is already quite a bit. Imagine a microwave to heat up food or deep fryer or a blender to mix drinks. You certainly don't want the breakers to pop. Or that during rainy season water drips onto anything electrical.
Another pitfall: staff. Goooood luck finding AND keeping staff more than 3 months. Assuming you will need staff, this will probably be your biggest headache once up and running.

Thanks, lots of useful info. Hadn't thought of the police. What's the point about staff? I heard of that before, why is it? It makes me laugh...

And also thanks for all the additional points. If we go ahead I'll send her to you in Ubon for apprenticeship a month or two, you won't have to pay for her work, how does it sound? :)

7 hours ago, kokesaat said:

I've lived in Udon for a few decades.  From the time where there were zero coffee shops until coffee shops sprouted up all over town.  Extremely few survive, and those are usually co-located with gas stations, car washes, or other sustaining businesses.

 

A few things to consider:  Thais are not keen coffee drinkers.  I rarely see a Thai drink hot coffee, and more rarely see a Thai drink a coffee product in the late afternoon (contrast to a Starbucks full of customers in the evening in the US).  

Just recently, 7-11's have added a coffee corner with freshly ground coffee brewed on fancy coffee machines.  The cost is much less than what is commonly charged in a coffee shop.

A few years ago, I visited a new coffee shop in town.  The owner spoke excellent English.  She served only coffee and toast products.  I asked about her English.  She had worked for Chanel in Bangkok for several years, saved up her cash, and longed to open her own coffee shop.  Two months later, the shop was closed.

Good luck with your venture, but I'd vote with the seasoned expats who advise against the business.

Thanks. I see your points and I agree. Actually I think that the idea of spending 50 or 100 baht in a cafe is for many recreational more than actual coffee intake. For that - as you said - there's a 7-11.

But yes, I do have serious reservations about this working out. The trick is to strike a balance between low expectations, low costs, broadening the offer and coming up with some good idea.

5 hours ago, onthesoi said:

 

she could do a lot worse than spend 1 year working in a coffee shop, I wouldn't be so quick to dismiss this suggestion, no better place to learn the business than at the bottom where she will be doing a little bit of everything not just making coffee, although making decent coffee is an important aspect of running a coffee shop.

 

At least this way she will learn if she has any appitude for the industry including the long shifts and unsociable hours.

 

I would be careful of trying to improve her life, as its most likley she will lose her current job and the coffee shop will fail when she quickly finds herself out of her depth....and the fantastic loss of face that comes with, what then?  Will you be supporting her, paying her bills etc...?

 

The first two paragraphs I fully agree with, that's the point. It's a sort of practical 'university', which I pay for, she'd hopefully make a living with it if I cover the expenses, which is cheaper than her going to uni and me paying for uni and for her living.

As for your last point, she has already lost her job (she was 1 hour late one day as she was sorting out some business for me, so she got fired), so there isn't much to lose. She will find a mall job when if the coffee shop closes down. 

5 hours ago, Kwasaki said:

Your point is flawed l do not in the least see your point, you obviously live in a bubble.

Kwasaki... make up your mind lol, if you don't get my point, how can you say it's flawed?

I will spell it out clearly and with no acrimony: 'I have been in this country for a long time, I know all the horror stories about farang being conned out of their money and I do not ask any advice or comments on that matter. My post is simply aiming at learning the practical aspects of opening a business: 'evidence of revenue, insurance, what questions to ask when looking at a business for sale, etc'. Simple as that, nothing to do with whether or not the business will survive or whether or not I should be doing this or not, that's my decision only. We all live in a bubble and I am fine in mine lol.

5 hours ago, RowdyAlpha said:

So you take all the risk just to get your money back and she just walks away if the business fails. Good luck I hope she makes a million and everything works out.

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Thanks for the wishes, she will not make a million. Sure as eggs.

As for the risk, it's even more extreme than that ha ha. I don't want my money back, I'd be happy to see her business flourishing and her and her sister making 10000 per month each without depending on anyone.

4 hours ago, lkn said:

Make a budget, or better, make her do a budget to see how much she understands.

 

Fantastic, you got the spirit of my idea, although when it comes to budget and strategy I'll keep control, and just give her visibility so she gets the most of it (She'll need time to get to the right level)

4 hours ago, kenk24 said:

Well, nice of you to do this for her... 

 

First and most important - Is this her idea? Or yours for her? If she does not have some passion for doing this business, it likely will not work out...

 

The way to start such a business is for her to work in someone else's coffee business for a while. Our parent's called it apprenticeship and it will be very valuable. Not only will she earn a salary but will eliminate both the learning curve and afford a chance to see if she enjoys being in the business... if she apprentices for 6 months, she will be able to answer all your questions... and really, she should be the one asking such questions. 

 

I would guess they are not too expensive to open - and it could be a deed well done. 

Thanks, you too got the point. It is my idea unfortunately... I am trying to wake her up to the opportunity and actually explain to her what an opportunity is.

She is showing signs of understanding but you know this is not China, it's Thailand. She is not staying up at night making lists of businesses. She has three businesses in her list. She also has a list of questions to ask which I have tidied up for her and rationalised a bit.... as you can see there's a lot of work to do and in the end it may never happen.
That's why my university proposal a year ago didn't take off, she didn't demonstrate sufficient passion for it.

Surely if she doesn't take ownership I won't be the one doing it for her.

The point about apprenticeship is good, I did 5 years and it made me a professional.

3 hours ago, ChiangMaiLightning2143 said:

Warren Miller said long ago going skiing in the rain is like standing in a cold shower tearing up Hundred dollar bills.


Sent from my iPhone using Tapatalk

This went well over my head. It is likely to be an innuendo on me throwing my money away, I guess :)

6 hours ago, champers said:

Without any experience of running a business, or even experience of working in a business of this type, the business is likely to fail. You may not be worried about losing your investment but you should be worried about your friend losing all her confidence. I would spend on her education; it is an investment for life and gives her more options.

Agree 100% with your final statement. I tried this a year ago and it didn't go anywhere, it was a step too far for her I think. She is in her mid-thirties and the effort and time needed to complete education and going through apprenticeship into a job also put me off, not to mention the cost of having to sustain her with a salary for some years, which would have probably been higher than what I have in mind now (or maybe not).

As for her losing the confidence if it fails it may however boost her experience. I do agree that chances of failing are high, but I am there to push it forward if need be for as long as it takes. Anyway, thanks for comment.

6 hours ago, ezzra said:

Unless the intended location is a super star location for selling coffee

I wouldn't waste my money and her energy on coffee, as every dick, Tom

and his Thai girlfriend are opening a no brainer coffee shop everywhere.....

Noted, thanks. Kind of agree, or instead of boosting the location one lowers the expectations or makes a superstar innovative idea that works.

6 hours ago, theguyfromanotherforum said:

What is wrong with working in a shopping mall?

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This has been answered by another poster: 9000/month for 12 hours days six days per week without the right to walk out of the store even for a minute and all sorts of penalties for late arrival or sickness isn't what I call a good life. The fact that many girls do it doesn't make it right.

5 hours ago, ChristianBlessing said:

Perhaps it would be worthwhile for her to take employment in an established coffee shop, both to learn the trade and to discover whether this is something she really wishes to do.

Sent from my Redmi Note 3 using Tapatalk
 

Yes, but she is in her mid-30s, wasted a lot of time working for others and has the potential for growth. I think anything more than two months in a starbucks would be a waste she just needs to dive into deep water to learn business, not coffee making.

But thanks for the well thought advice.

5 hours ago, oxo1947 said:

I find it hard to believe your not banging her Thomas99....because for someone who (says) he has lived here some time---to set someone up in a business that she or you have absolutely no background or experience in ....that its a heart decision Thomas.

 

So I am sure you can find a better way of increasing income for her services than a hugh lump sum into a shop that the income will not cover her rent---so you will also be up for that each month..............

The banging point makes me smile, as if it made a difference: no I am not banging her. I am banging others, it is a heart decision. I have been here 35 years, I say.

Have to add that whilst I don't have business running experience, I should have added that I have significant management experience, deal with budgets of millions (dollars) and - as you can see from the 'not banging but helping' I am a bit of a lateral thinker, so if she makes the coffees I can help with strategy, business management and yes - I would need to cover the rent for as long as necessary, I'm aware.

4 hours ago, onthesoi said:

6 - Pitfalls

 

Investing in a business in a saturated market where the manager has zero business experience and there is no contract so your effectively just giving free money to said manager is extreme folly....especially when you yourself have obviously no experience investing in buinesses.

 

There is a reason why shes working in a shopping mall....and its not lack of money to start a business.

Yes, I take your point, but one has to take a leap once in a while, and it's intuition, ability to risk and hard work that can make change, otherwise there'd be complete stagnation.

On your last point, it's well put, and I agree. I am indeed testing her out and grooming her into her opportunity. She has to find a place, ask the questions, demonstrate the ability to organise herself and to pursue the objective. Yes I'll fork out the money but only if I am sure that she is deserving it. Of course that's not a guarantee for success, but I'm willing to risk if I see there are some chances of success (agree it's a saturated market, but she has a very low bar in terms of expectations)

4 hours ago, tonray said:

I would suggest a better use of the money would be financing a University or Technical College Education. Get a real dignified living by earning the skills to perform in business.

Thanks. As I mentioned at the start of this post this has been tried and it wasn't working. It was my very first attempt to make a difference a year ago. I might do it for her daughter.

Quote

As others have pointed out, coffee shops are a dime a dozen and frankly most people prefer standard bearers, Starbucks, Coffee Today, etc so you would likely be buying into a licensing agreement if you wanted a long term prospect. I know of a Thai couple who run a Coffee Today location in Seacon Bang Khae. They started out small and just late last year expanded their floor space and are doing quite well...but they both work there from 9 AM until about 8 Pm in the evening every day. It can be done.

Encouraging. The working hours are not a problem.

Quote

How about getting a business degree (a sure sign of the perseverance to be successful) , then getting some management experience, it's more than just serving coffee...inventory management, accounting, etc etc etc.. Then if successful sure think seriously about a coffee shop.

See above.

Quote

Just a bit of personal example, someone in my life, a Thai with 10 years of retail management experience has at times expressed a desire to own her own store. Currently manages a small supermarket for a large national chain. When a Super Big-C opened up down the road, sales started to dry up. Very concerned I pointed out that had that been her  store instead of one belonging to Tops, she would be facing bankruptcy right now instead of Central Group taking the heat. A huge difference in perspective. Not worth it for a commodity business when anyone can open up down the Soi and take your business away.

I see the point, that's understood and I am conscious of it. However the only alternative I can see is to grow older into a shopping mall or serving in a restaurant.

I might follow the education point with her daughter, so at least when Big C take over and the coffee shop business dries up she'll have some sort of support.

4 hours ago, Kwasaki said:

So why you asking l think your post is a bit of joke really.

I think it's your post that is a bit of a joke, or you have completely missed my point.

4 hours ago, varun said:

Troll post, but I'll bite.

 

I cringe whenever I heard the the words 'smart but'  in a sentence.

 

1) If she is as smart as you claim, she wouldn't need your help

 

2) I don't know which planet of logic you come from, but there are better ways to waste your money

    than giving money to a 'smart' person to start a business, who has zero experience of running a business!

1 - It's not a troll post.

2 - Smart intended as she is not a girl that spends her money on drinks, make-up, clothes. She is hard working, has high emotional intelligence but no experience. Being smart doesn't mean not needing help. Look at me, I am very smart but I am asking for help.

Are you?

3 - I use aristotelian logic, which requires coherency focus and ability to read questions right.

I want to thank all for the encouragement above (ha ha). Barring a few exceptions the near totality of the thread is dedicated exactly to questioning whether or not it is a good decision, which is exactly what I had asked not to focus on.

7 hours ago, Thomas99 said:

 

If you reply to this post please try to stick to the practical questions I am putting below, rather than the moral, social or other aspects of this matter.

So, I am not asking whether it's a good idea to open a coffee shop. I am asking specific practical questions about it: income, costs, questions to ask, mafia, tricks of the trade.

I say this kindly, I really thank you for the well thought advice and for the concern, but leave me the decision of whether to do it or not, I am not an idiot, I'll let the heart, the brain and the wallet decide. But if I decide to go ahead with it I need to have a bit of practical aid, which is what I asked for here and I still hope to get.

Thanks.

OK, the heading should introduce the topic well enough, so I follow with a request, which I put kindly to you.

If you reply to this post please try to stick to the practical questions I am putting below, rather than the moral, social or other aspects of this matter.

I have been in this country long time and I am well aware of the pitfalls of guys helping out girls, or being sucked all their money etc etc. I don't care about that. Actually, I do care, I am very interested, but I will post separately about them, as they pertain to the curiosity sphere, which drives the sociologist in me.

This post is not about that... this post is about helping a thai girl (not gf) to open a business. I am am thinking of a Bangkok coffee shop. She comes from Isaan, has been in BKK a while, she is smart but has zero experience of running a business, not to mention a coffee shop.

I am retired, I have the money and would never work in the cafe, nor appear in any paper work, nor would show up at preliminary visits to avoid prices soaring because I am a farang.

In other words, I hand out the money to open the business, don't want them back. I just want her to have a dignified living rather than working many hours per day in a shopping mall for someone else. Naive I know, but I don't care.

So... my questions:

1 - Where to start? 

2 - Given the lack of previous experience would it make sense to look for something which is already started and pay a premium for it?

3 - Given the lack of previous experience and a good experience dealing with farang (not sex trade), does it make sense to focus on areas where there are farang (certainly not upmarket places or lower sukhumvit) or better stay in the more isolated thai-only neighbourhoods where work is hard, but costs are lower (and so are revenues)?

4 - What questions to ask and what evidence to look for?

I am thinking of outgoings (rent, accounting, monthly expenses, staff, taxes) and revenue (how many coffees, daily income)

5 - Any specific licenses to be had?

Pardon the naivety of my questions but really this is a genuine attempt to get someone a decent life. I think you can see through that.

Any help appreciated,

Anonymous Thanks,