Issan Small Scale Investment Ops

[RusT]

I would appreciate any thoughts from the Issan panel on what are realistic options for small scale investment/business possibilities in the area. I live with my wife on the other side of the country but at some point we may consider moving to the village. Whether we do or not I am still interested in looking at whatever money making opportunites there may be up there. I don't have gazillions of baht to invest and I'm not looking to make huge profits. I have investments elsewhere so am not after a single breadwinner so just something modest with Thai style income is all that I am considering. So far I have come up with -

1. General store. I dismissed this idea figuring it would be to difficult to run by remote with too much reliance on the in-laws. Besides there's too much credit involved in transactions in our village.

2. Buying land. I can't see land prices going up in any meaningful way in the future so I don't see this as an attractive option.

3. Agricultural machinery ie.plougher, harvester. Quite a large capital outlay. Would love to hear anyones thoughts on the viability of this one. Would only require the one inlaw to operate so would be practical on that front.

4. Money lending. This is not something I want to get too involved in for a variety of reasons.

5. Commercial property eg shop rental in district town or even rental accommodation in amphur eg student accommodation.

6. Farming. Figure I would be setting myself up for disaster with this one. No experience and too difficult to get the in-laws to make the switch. Farming is hard enough it seems even for the experts.

These are some of the things I have thought about during my stays up there over the years. Rather than reinventing the wheel I thought I would put the ideas to experienced Issan hands who might be kind enough to weigh in with their thoughts and expriences on the above or even chip in with some suggestions even if that advice might be to keep my money where it is.

Long post I know but couldn't get it any shorter!

[thedi]

Hi Rust,

Your main problem is competition. There are too many Thais in Isarn looking for something to do to earn some money. Typically they hope to earn about 150 to 200 Baht a day. For this they work from 8 hours/day up, 7 days a week, no holiday ever.

I live in Isarn for 15 years now and I never met any chance to earn money. For this reason I keep my part time job in Switzerland; twice a year I go there to attend to that. Cut the costs there redically and spend the money in TH.

I think your analysis of this 6 possibilties is quit sane. They all have no chance. The only thing I could think of worth considering is student accomodation in a town like Khon Kaen. But you should be aware, that you can not expect a profit of much more than 200 Baht a day, and you would have to live in a town like Khon Kaen. Real estate in khon Kaen is very expensive. A small cell, about enough to build a town house style building, will set you back more than 1 Mio Baht.

You didn't mention teaching English. If your mother language is English and if you have a degree, ideally as a teacher, this would be possible. Even with work permit - which would be quite impossible with any of your list of 6. Again it would be hard work with very small salery. You could also try private lessions for Matayom students to get a bit money into your pockets. Again: pay will be peanuts.

My suggestion: Forget the idea of earning money in Isarn. Isarn is a great place to spend money, but one of the worst place to try to earn it.

Sincerely

Thedi

[Gimbo]

How about an internet cafe in one of the smaller towns. Not many have one and there should be plenty of...uh...ladies in communications needs waiting for their farang to return :-)

[frikkiedeboer]

How about an internet cafe in one of the smaller towns. Not many have one and there should be plenty of...uh...ladies in communications needs waiting for their farang to return :-)

internet cafes in isaan are a dime to the dozen. mostly they charge around 20thb/hour and i think it would be difficult to recoup your initial investment in one of these ventures. previous poster hit the nail on the head: most thais are happy to make a profit of around 200thb/ day, and if you look at any one of the traditional "business opportunities" available, this seems to be about all you could hope for. if you want to make enough for a farang to live off, you have to think like a farang, do your homework and do not listen to any of the thai "success stories"- the reality most often gets lost in the thai need to "show face" and you are wasting your time following any advice from a thai.

you have to remember that if you are selling to the thais, the profit margin will have to be small, since you are competing with people who think 200thb/day is a good living.

only real opportunities seem to exist in situations where you can sell to the farang.- swimming pool construction huge profits (rip-off your fellow farang!), export opportunities (take advantage of the rapidly disappearing exchange- rate advantage) or the flesh trade seem to be the only options available if you want to make real money.

oh, here is one i stumbled across- widely practiced in the isaan villages:

sell a farang!

the young "lady" returns to her village from the bar in pattaya. found a farang who took pity on her, thought he could "save" her from her desperate situation, marries her and sets her and the family up- new house,etc.

young "ladies" in the village approach her for intro's to farang ,so they can also reap the benefits, and she charges them 200000 thb for introduction to husband's friends. money is borrowed, paid up front, and no garuantees are offered. the guy visits, has a great time, and returns to his home country, none the wiser, and tells all his mates how wonderful, and "accomodating" the young thai girls are.

if he was wise, he resisted the pressure and the relationship went no farther. the young girl's parents get saddled with the debt (they borrowed the money, remember) there are no hard feelings, or charges laid, and the perpetrator keeps on raking in the money, since no thai would be prepared to "lose face" by complaining!

a german fellow and his thai wife in our village made a fortune doing this and got clean away with it. their sideline business is "contracting" young thai ladies to work in"restaurants" in germany. to date not one of these has returned with any money, and most of them seem to learn by the experience and are soon in business, doing the same thing!- and they have queues of hopefulls at their doors, all waiting to get ripped off!

so you see, there are plenty of business opportunities in thailand-just depends on how low you are prepared to stoop..........

[Tilapia]

I will stick to my Tilapia fish....Well I guess that is a kind of flesh business to, but one I can live with.

Tilapia.

[Gimbo]

Well, I know of one small town with no internet cafe... and he was asking for small scale. Well aware of Thai versus Farang income expectations...

It was just an idea :-)

(the chance of me opening one is the same as that of my mom having a walk on the moon)

[RusT]

Thanks all for your input. Most of my savings are invested offshore earning satisfactory returns and I'm happy to keep it that way. At the same time I am always looking for additional income streams both in Thailand and offshore so will continue to keep my eye out. Being realistic though I do understand that a large numer of businesses in Thailand (probably everywhere for that matter) go belly up and after living here for a number of years I am yet to see anything that I feel would be viable for me personally.

[Khun Bob]

Keep your eyes open and talk to people - there are quite a few foreigners that are getting by in khon kaen - just go look and see - theyre not making big bucks, but has already been said its highly unlikely you ever will. There are quite a few ways, but it does depend on having Thais you can trust (to a sufficient degree). If you observe a business for a while you will see how it works and what sort of money is being made, what to do and what not to do. Theyre are a few that I think are run more as hobbies than businesses, and eventually they can be bought for peanuts. I'm sure there is some good value to be had buying unwanted farang owned businesses, after they have been run with the wrong mind set. and the previous incumbent will give you many pearls of wisdom. Often an astute Thai can tell you where they are going wrong. Like any investment have a budget and stop loss set. Dont get emotionally attached. But I guess you knew all that ?

But, fraid to say it may well require micro management or exclusion of the thais involved to ensure it runs to a satisfactory degree. If you want the thais committed then you need to make a loan based on what they have (land, car) - i dont know how well it would work in family. Then maybe you could set the family up with a hawkers stall selling burgers or other farang food. Hawking quality pizzas would go down well - think about what may work in the village. In the malls a while ago, those coffee flavour breads were a mega hit. Pay them a set minimal wage and a commission based on profit. But how well you can manage this remotely - well you decide.

Theres lots of ideas, but if the thais your working with think it is just a freebie or dont want it to work - it wont. Sometimes doing nothing is better than doing something...

Edited May 20, 2007 by Khun Bob

[LoveDaBlues]

I think selling small scales in Issan would work. At all the small village markets a lot of the vendors sell by weight.

[Ski_Goong]

I've opened up a small Photo Store/Studio in the sticks near Korat. The money is pretty good and the initial investment is low but you must have decent computer and photographic skills.

I make 500 baht on a bad day, 1000 baht on average and 2000 or more on a good day (this is profit).

For example, there's a large elderly populace here who are dropping (dieing) on a regular basis. The Thais will have a large picture made for the funeral...cost 800 baht...profit...600 baht.

I also take old black and white photos of these wonderful elderly people (when they were young and hot) and restore them by adding color and “photoshopping” until they look great....cost 600 baht...profit...400 baht.

Thais also love to take "photo stickers" and ID card pictures for job applications. The cost is minimal to you but the profit is very good. My best day so far, I made over 5000 baht in profit. Not bad for 1 day of work and the Thais are happy with the product and service I provide.

So....look around...see what you are good at or want to be good at than work with it.

Ski and Goong....

Edited May 21, 2007 by Ski_Goong

[pnustedt]

3. Agricultural machinery ie.plougher, harvester. Quite a large capital outlay. Would love to hear anyones thoughts on the viability of this one. Would only require the one inlaw to operate so would be practical on that front.

I'm doing this. Bought tractor, baler, trucks, trailer, combine harvester (but the wrong one) last year, buying a new combine again this year and just built a depot.

Four in-laws involved in the business, we do contract farm work. The family/s are making a good living and I expect to get the capital outlay back in quite a reasonable time.

[RusT]

I've opened up a small Photo Store/Studio in the sticks near Korat. The money is pretty good and the initial investment is low but you must have decent computer and photographic skills.

I make 500 baht on a bad day, 1000 baht on average and 2000 or more on a good day (this is profit).

For example, there's a large elderly populace here who are dropping (dieing) on a regular basis. The Thais will have a large picture made for the funeral...cost 800 baht...profit...600 baht.

I also take old black and white photos of these wonderful elderly people (when they were young and hot) and restore them by adding color and “photoshopping” until they look great....cost 600 baht...profit...400 baht.

Thais also love to take "photo stickers" and ID card pictures for job applications. The cost is minimal to you but the profit is very good. My best day so far, I made over 5000 baht in profit. Not bad for 1 day of work and the Thais are happy with the product and service I provide.

So....look around...see what you are good at or want to be good at than work with it.

Ski and Goong....

Sounds like a great idea and thanks for the details. I've noticed that Thai people, like most Asians, seem to be fascinated by their own image and by providing a professional service it looks like you are doing well. Best of luck.

[RusT]

Keep your eyes open and talk to people - there are quite a few foreigners that are getting by in khon kaen - just go look and see - theyre not making big bucks, but has already been said its highly unlikely you ever will. There are quite a few ways, but it does depend on having Thais you can trust (to a sufficient degree). If you observe a business for a while you will see how it works and what sort of money is being made, what to do and what not to do. Theyre are a few that I think are run more as hobbies than businesses, and eventually they can be bought for peanuts. I'm sure there is some good value to be had buying unwanted farang owned businesses, after they have been run with the wrong mind set. and the previous incumbent will give you many pearls of wisdom. Often an astute Thai can tell you where they are going wrong. Like any investment have a budget and stop loss set. Dont get emotionally attached. But I guess you knew all that ?

But, fraid to say it may well require micro management or exclusion of the thais involved to ensure it runs to a satisfactory degree. If you want the thais committed then you need to make a loan based on what they have (land, car) - i dont know how well it would work in family. Then maybe you could set the family up with a hawkers stall selling burgers or other farang food. Hawking quality pizzas would go down well - think about what may work in the village. In the malls a while ago, those coffee flavour breads were a mega hit. Pay them a set minimal wage and a commission based on profit. But how well you can manage this remotely - well you decide.

Theres lots of ideas, but if the thais your working with think it is just a freebie or dont want it to work - it wont. Sometimes doing nothing is better than doing something...

I agree, knocking up cheap pizzas or burgers could work in the right area - not our village though so would have to look at the amphur or a larger town for that. Your point about micro managing is very vaild but not impossible in the right hands.

Food for thought (no pun intended).

[RusT]

3. Agricultural machinery ie.plougher, harvester. Quite a large capital outlay. Would love to hear anyones thoughts on the viability of this one. Would only require the one inlaw to operate so would be practical on that front.

I'm doing this. Bought tractor, baler, trucks, trailer, combine harvester (but the wrong one) last year, buying a new combine again this year and just built a depot.

Four in-laws involved in the business, we do contract farm work. The family/s are making a good living and I expect to get the capital outlay back in quite a reasonable time.

Thanks Pnustedt. Hope you don't mind if I ask you a few more questions. I imagine there would have been a hel_l of a lot of outlay for all that machinery. No problem if you don't want to quote costs but how long approximately do you think it will take you to recoup your investment? One year, three years, five years? Also do the four in-laws working for you have any specific experience with these machines or are they just reliable guys who have a background in farming and a general understanding of machinery? I imagine the work is quite cyclical so the equipment would be unused for a good part of the year???? Finally, any maintenence issues at this point?

Thanks for sharing your experience.

[pnustedt]

[Thanks Pnustedt. Hope you don't mind if I ask you a few more questions. I imagine there would have been a hel_l of a lot of outlay for all that machinery. No problem if you don't want to quote costs but how long approximately do you think it will take you to recoup your investment? One year, three years, five years? Also do the four in-laws working for you have any specific experience with these machines or are they just reliable guys who have a background in farming and a general understanding of machinery? I imagine the work is quite cyclical so the equipment would be unused for a good part of the year???? Finally, any maintenence issues at this point?

Thanks for sharing your experience.

Outlay: Tractor - Bt600K+, baler - Bt400K+, trailer - Bt200K, combine harvester - Bt1.5-2m, barn to house equipment - Bt300K, pick up trucks Bt600K+ each. Anticipated payback 5-6 years.

The family are farmers, used iron buffaloes but not experienced on larger equipment. Nephew is to receive combine harvester training this summer prior to our new machine purchase - actually with a competitor harvester with whom we may enter a joint venture.

No maintenance issues yet, equipment is still fairly new. Main thing is to ensure that you have a proper building in which to store and maintain the equipment. My main concern has been safety issues - there is a tendancy for operators to remove guards for ease of access and there are a lot of children about.