Why Thai's fail at business, examples I've seen

[Cracker2000]

Hi All,

 

This topic has been mulling through by brain for months and I just saw a classic example of why a business is failing becuase the owner doesnt care to know his likely customer base.

 

'7/11' on Soi 4, Nana, Bangkok  opposit Sub Soi 2.

 

I stay regularly at a Boutique Hotel down the Sub Soi 2 when I'm in town in Bangkok, so drop in to this 7/11 regulary on my 'stagger' back from bars around Nana Plaza.

 

Obviously I am not alone, many Farang Tourist also frequent this 7/11 in fact I would think that form the core of its customer base, however.

 

• All the signs/offer stickers are only in Thai (and I have notices more and more of these as the owner is obviously trying to encourage sales, but failing I would think) none in English.
• When you ask an shop assistant what the sign means, well they don't speak enough English to understand you

 

Net results, I don't buy there, I walk up the Soi to the Family Mart

 

Another example of this business failing is it has specialty coffees for sale (and the equipment for this will not have been cheap), good idea you would think ? but there not selling as the sale stickers now say their all one price 25bht (my girlfriend translated). Why not you may ask, that a reasonable price, well you have only to step outside and directly in-front of the door is a little mobile cart with a guy selling coffees for 10bht to a mass of moto drivers lounging around there.

 

When I've been in Central Pattaya I have never had an issue communicating at either a '7/11' or 'Family Mart' and frequently they have offer signs in English as well as Thai, as they know thats where a lot more of their customer base is.

 

Also I've never seen any of them let an cart block the door and sell competing products (although there is a lady who runs a great noodle soup stall outside the Family Mart opposite Greenery House Hotel on Soi Buakhao but she doesn't block the doorway and only opens in the evening).

 

Anyone else seen some classic business fails around you?

[jackdd]

And about what exactly do we discuss now? Yes, many business owners make mistakes, everybody here will notice such things. But i notice such basic mistakes back at home too, even if not so frequently. Not everybody is perfect. If you can do it so much better that you have an edge that it's worth it you should open your own businesses

[sanemax]

Of all the exapmles that you could have given, I dio feel that you could have found something better than the buy one get one free offers not being in English  in 7/11

[Cracker2000]

5 minutes ago, sanemax said:

Of all the exapmles that you could have given, I dio feel that you could have found something better than the buy one get one free offers not being in English  in 7/11

Ok so give me some examples other than having 3 mini-markets, massage shops, beauty parlors etc next to each other competing for the same customers but offering exactly the same prices and level of service?

[Cracker2000]

21 minutes ago, jackdd said:

And about what exactly do we discuss now? Yes, many business owners make mistakes, everybody here will notice such things. But i notice such basic mistakes back at home too, even if not so frequently. Not everybody is perfect. If you can do it so much better that you have an edge that it's worth it you should open your own businesses

There isn't enough beer in Thailand for me to get drunk enough to think I could ever open a business here as a Farang in completion with a Thai and make a profit.

 

Its not so much as it being an uneven playing field in business.... its more like being asked to free climb the north face of the Eiger with a backpack full of bricks while the locals laugh at you and throw rocks...yes that seems a fair analogy

• Quote

[jerry921]

I suspect the failure rate for thai people trying to have their first business is not far different from farang's trying to start their first business in farang land. I suspect the failure rate for farangs trying to start their first business in thailand is far worse than either of the first two cases.

 

I suspect. But I don't know anything. Just like everyone else here.

[Suradit69]

23 hours ago, jackdd said:

But i notice such basic mistakes back at home too, e

Exactly. In western countries the survival rate for small business start-ups is about 50% in the short term and less over longer periods.

 

According to Forbes and Bloomberg it's even worse.

 

Quote

According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. A whopping 80% crash and burn.

https://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/#698ffc0e6978

 

[remorhaz]

Thais and business...  here's a hypothetical that illustrates a point that I have seen in one way or another in Thailand.  A Thai owns a block of 10 rental units.  He rents them for 1,000 Baht each.  Unexpectedly 5 of his renters leave within the same month.  The owner then goes to the remaining 5 and tells them that rent is now 2,000 Baht a month.  In response to this 4 out of the remaining 5 leave.  The owner than goes to his sole remaining renter and tells him that rent is now 10,000 Baht a month which immediately prompts his last renter to leave.  His entire complex stays empty for 2 months.  Finally a potential customer comes up and asks how much it is to rent one of his units - the owner answers "10,000 baht" - the owner is used to getting 10,000 baht after all.  The new customer immediately walks away.  At the temple the owner prays and lights an incense stick and dedicates a bottle of Red Fanta because obviously the Buddha is angry at him as he has no customers.  

 

The absolute inability to connect cause with effect and understand that for a person to have something greater tomorrow they must not consume it or waste it today.  I blame the weather.  In Europe or North Asia if you didn't plant your crops properly and harvest them carefully you starved during the winter.  This has a tendency to shake out the lazy within a few generations.  In Thailand if you're lazy and wake up at 1pm every day and don't plant anything it doesn't matter.  When hungry you simply go tear a piece off any number of trees and eat, year round.  If you save something chances are someone will be along to take it or want to "borrow" it from you so why save anything?  Only today matters.  Ask a Thai this: would you rather get 60,000 Baht at the end of each month or 1,000 Baht each and every day.  They'll all take the 1,000 per day.  You could die today after all!  Future planning?  You think to mut.  I'll come back tomorrow?  A grave insult.  Running a business requires future thinking which is hard to do if none of your ancestors ever did this.

[timendres]

That 7 is still open, and I see Farang in there all the time. Let me know when it fails.

[NOWHERE]

2 hours ago, remorhaz said:

Thais and business...  here's a hypothetical that illustrates a point that I have seen in one way or another in Thailand.  A Thai owns a block of 10 rental units.  He rents them for 1,000 Baht each.  Unexpectedly 5 of his renters leave within the same month.  The owner then goes to the remaining 5 and tells them that rent is now 2,000 Baht a month.  In response to this 4 out of the remaining 5 leave.  The owner than goes to his sole remaining renter and tells him that rent is now 10,000 Baht a month which immediately prompts his last renter to leave.  His entire complex stays empty for 2 months.  Finally a potential customer comes up and asks how much it is to rent one of his units - the owner answers "10,000 baht" - the owner is used to getting 10,000 baht after all.  The new customer immediately walks away.  At the temple the owner prays and lights an incense stick and dedicates a bottle of Red Fanta because obviously the Buddha is angry at him as he has no customers.  

 

The absolute inability to connect cause with effect and understand that for a person to have something greater tomorrow they must not consume it or waste it today.  I blame the weather.  In Europe or North Asia if you didn't plant your crops properly and harvest them carefully you starved during the winter.  This has a tendency to shake out the lazy within a few generations.  In Thailand if you're lazy and wake up at 1pm every day and don't plant anything it doesn't matter.  When hungry you simply go tear a piece off any number of trees and eat, year round.  If you save something chances are someone will be along to take it or want to "borrow" it from you so why save anything?  Only today matters.  Ask a Thai this: would you rather get 60,000 Baht at the end of each month or 1,000 Baht each and every day.  They'll all take the 1,000 per day.  You could die today after all!  Future planning?  You think to mut.  I'll come back tomorrow?  A grave insult.  Running a business requires future thinking which is hard to do if none of your ancestors ever did this.

Valid viewpoint. I like it. 

[terryofcrete]

2 hours ago, remorhaz said:

Thais and business...  here's a hypothetical that illustrates a point that I have seen in one way or another in Thailand.  A Thai owns a block of 10 rental units.  He rents them for 1,000 Baht each.  Unexpectedly 5 of his renters leave within the same month.  The owner then goes to the remaining 5 and tells them that rent is now 2,000 Baht a month.  In response to this 4 out of the remaining 5 leave.  The owner than goes to his sole remaining renter and tells him that rent is now 10,000 Baht a month which immediately prompts his last renter to leave.  His entire complex stays empty for 2 months.  Finally a potential customer comes up and asks how much it is to rent one of his units - the owner answers "10,000 baht" - the owner is used to getting 10,000 baht after all.  The new customer immediately walks away.  At the temple the owner prays and lights an incense stick and dedicates a bottle of Red Fanta because obviously the Buddha is angry at him as he has no customers.  

 

The absolute inability to connect cause with effect and understand that for a person to have something greater tomorrow they must not consume it or waste it today.  I blame the weather.  In Europe or North Asia if you didn't plant your crops properly and harvest them carefully you starved during the winter.  This has a tendency to shake out the lazy within a few generations.  In Thailand if you're lazy and wake up at 1pm every day and don't plant anything it doesn't matter.  When hungry you simply go tear a piece off any number of trees and eat, year round.  If you save something chances are someone will be along to take it or want to "borrow" it from you so why save anything?  Only today matters.  Ask a Thai this: would you rather get 60,000 Baht at the end of each month or 1,000 Baht each and every day.  They'll all take the 1,000 per day.  You could die today after all!  Future planning?  You think to mut.  I'll come back tomorrow?  A grave insult.  Running a business requires future thinking which is hard to do if none of your ancestors ever did this.

You nailed it. While the rest of the world is trying to practice Mindfulness , to stay in the moment or the day , the Thai people do it instinctively. No worry about Prung ni . Only Wanee ! 

[Brunolem]

2 hours ago, remorhaz said:

Thais and business...  here's a hypothetical that illustrates a point that I have seen in one way or another in Thailand.  A Thai owns a block of 10 rental units.  He rents them for 1,000 Baht each.  Unexpectedly 5 of his renters leave within the same month.  The owner then goes to the remaining 5 and tells them that rent is now 2,000 Baht a month.  In response to this 4 out of the remaining 5 leave.  The owner than goes to his sole remaining renter and tells him that rent is now 10,000 Baht a month which immediately prompts his last renter to leave.  His entire complex stays empty for 2 months.  Finally a potential customer comes up and asks how much it is to rent one of his units - the owner answers "10,000 baht" - the owner is used to getting 10,000 baht after all.  The new customer immediately walks away.  At the temple the owner prays and lights an incense stick and dedicates a bottle of Red Fanta because obviously the Buddha is angry at him as he has no customers.  

 

The absolute inability to connect cause with effect and understand that for a person to have something greater tomorrow they must not consume it or waste it today.  

This is a perfect example!

Better be empty than lower the price...

 

And there are so many more examples, of a different nature...I will just give one, the shoe shops, but it is also valid for many kinds of shops.

They order 5 pairs of each size, say, 4 to 9 (women shoes)

The first day of sale, all the size 6 and 7 are sold, because 90% of women wear these sizes.

At the end of the season, they are left with all, or almost all of their size 4, 8 and 9, while having missed tens of size 6 and 7 sales.

So, what do they do when comes the time of the next order?

They again order 5 pairs of each size!

[simoh1490]

The OP's extensive business experience of Thailand which extends to reading signs in 7/11's on soi nana qualifies him to announce why businesses in Thailand fail. The OP's post is a nonsense, English language skills in Thailand are important for what reason, to service ten percent of the tourist population whose native language is English!

[Toscano]

As we are discussing businesses that might fail in Thailand .

Reasons will be , No financial plan from the outset , no business plan , a site that is not going to attract customers , a financial outlay that is not related to takings , no money set aside for rent , electricity , water , maintenance , sharing out ALL the money received among family members .  I could go on adding to the list ; it is noticeable that most successful businesses are run by Chinese , Indians or Sikhs . 

[Destiny1990]

Unpolished dusty products in their showrooms. 

U saying Good English skills at 7/11's in Pattaya really ? Which employee is that?

[Brunolem]

30 minutes ago, Toscano said:

As we are discussing businesses that might fail in Thailand .

Reasons will be , No financial plan from the outset , no business plan , a site that is not going to attract customers , a financial outlay that is not related to takings , no money set aside for rent , electricity , water , maintenance , sharing out ALL the money received among family members .  I could go on adding to the list ; it is noticeable that most successful businesses are run by Chinese , Indians or Sikhs . 

To make it short, let say : no idea of the cost of doing business, and more generally a complete lack of basic calculation skills.

 

Yet, those who run the most successful businesses, notably the first on your list, make sure that things stay the way they are...

[ThaiFelix]

I cant speak for the city, ie Bangkok etc, but up country they only copy.  As Toscano pointed out previously there is no financial plan, no market research etc.  Their simple methodology is to notice another business seemingly doing well because the owners now have a new car, a flasher motorcycle, more gold dripping from their neck etc so they do the same.  If you ask how many ice coffees, or  carrots etc they need to sell in a week to break even, or what their overheads are, the answer is always "mai lu"....I dont know. 

 

Even when some do make money they seem to be totally confused over the difference between takings and profit;  they take 10,000 baht through the till and think they have 10,000 baht to go out and spend on TV's and smart phones etc so in turn stock in the shop doesnt get replaced.  If the shop is continually short of day to day essentials the customers then get fed up and go elsewhere.

 

A couple in our village opened a "Mamma's and Papa's" store in our village, against everybody's advice, because the village is already overcrowded with such stores.  They ran it for a year and after failing to make a profit decided to get out.  A couple directly over the road have decided to buy all their stock and fittings at cost and build and run a store themselves!!  I cant work it out??

[ThaiFelix]

44 minutes ago, Toscano said:

As we are discussing businesses that might fail in Thailand .

Reasons will be , No financial plan from the outset , no business plan , a site that is not going to attract customers , a financial outlay that is not related to takings , no money set aside for rent , electricity , water , maintenance , sharing out ALL the money received among family members .  I could go on adding to the list ; it is noticeable that most successful businesses are run by Chinese , Indians or Sikhs . 

Exactly, that is why most of the money in S.E. Asian countries is in the hands of the Chinese.  They are not called the Jews of Asia for nothing. 

[Air Smiles]

4 hours ago, Suradit69 said:

Exactly. In western countries the survival rate for small business start-ups is about 50% in the short term and less over longer periods.

 

According to Forbes and Bloomberg it's even worse.

 

https://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/#698ffc0e6978

 

 

The last time I read stats it stated 80% of western businesses fail in the first 2 years, and 80% of those remaining failed in the 2 years after that, so 96% failure rate in the first 4 years, which suggests 96% got their 5 year plan wrong.

[Peterw42]

Why Thais fail at business using an example of a very successful Thai business ?????

 

If 7/11 put up signs in other languages, Chinese would probably be the obvious choice, followed by lao/kmer/issan etc. 

[MaeJoMTB]

On 2/27/2018 at 12:24 PM, Cracker2000 said:

Anyone else seen some classic business fails around you?

A new coffee shop has opened on my regular morning cycling route, cold one 30bht.

The last 6 times I cycled past I only managed to buy a coffee 2x.

2x they were closed (11am), 2x they were open but I couldn't find anyone serving, sat down for 10 mins, used the free wifi, then left.

[Brunolem]

28 minutes ago, ThaiFelix said:

A couple directly over the road have decided to buy all their stock and fittings at cost and build and run a store themselves!!  I cant work it out??

Everything you say is right on spot!

As for the road...the road!

 

Believe it or not, it's not only your village where the road fantasy runs wild.

 

Here is the fantasy: being on the road is good for business! (no matter which road and where on said road).

 

And no matter how many families fail after opening a business on said road, the belief remains as strong as ever.

 

My village borders a road that links 2 small cities, with all the traffic being local (0% tourists or lost drivers).

These drivers are not really interested in what stands along a road that they pass every day, or even twice a day.

As a matter of fact, the vast majority of them are driving at high speed (not seeing what stands on the sides) toward one of the cities, which is their destination and where they will buy whatever they need.

But it doesn't matter.

 

I live at the deep end of the village, the furthest possible from the road and its terrifying noise.

Yet, two of my neighbors recently left their houses to go stay in new houses built right on the road, because, you know, it's good for business!

By the time they recoup the costs of their move, I will be long dead of old age!

[samsensam]

 

i wouldn't say 7/11 is a failing business model, but i bow to your superior business acumen.

 

i do know that business failure runs at a high rate the world over. carillion, a huge uk company, has recently gone bust as a result of what many people would say were common sense mistakes.

 

and around 50% of new businesses fail to make it through the first five years.

 

conclusion; nothing unique about a business failing in thailand or anywhere else.

[Peterw42]

5 minutes ago, MaeJoMTB said:

A new coffee shop has opened on my regular morning cycling route, cold one 30bht.

The last 6 times I cycled past I only managed to buy a coffee 2x.

2x they were closed (11am), 2x they were open but I couldn't find anyone serving, set down for 10 mins, used the free wifi, then left.

I find that with coffee shops all over Thailand even Starbucks etc, they are never open when you actually need a morning coffee.

[baansgr]

Thais dont care cos its some dopey foreigners money started the business 

[inThailand]

Monkey see Monkey do comes to mind.

[ThaiFelix]

16 minutes ago, baansgr said:

Thais dont care cos its some dopey foreigners money started the business 

Easy come, easy go!

[jenny2017]

 

 I'm wondering why Thai have never thought about a one stop service for us. Beer, visa and girls. 

[jenny2017]

34 minutes ago, baansgr said:

Thais dont care cos its some dopey foreigners money started the business 

  Money isn't all when a girl loves you much, isn't it? 

[Minnehaha]

5 hours ago, Suradit69 said:

Exactly. In western countries the survival rate for small business start-ups is about 50% in the short term and less over longer periods.

 

According to Forbes and Bloomberg it's even worse.

 

https://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/#698ffc0e6978

 

And given Thai culture they all want to have their own business. They do not play well together (collaborate) or team up. So I posit the number of Thais who have started their own business is much higher % than foreigners.