Advice for a 1st time farang business owner?

[Richard 2020]

Vor 1 Stunde sagte rumak:

Auf Anhieb fallen mir zwei "Geschäftsmodelle" ein, die eine bessere Chance zu haben scheinen als die meisten anderen. 1. Wenn jemand ein wirklich guter Koch ist und schon einmal Restaurants hatte ... dann kenne ich um CM herum ein paar, die ziemlich gut abgeschnitten haben. Gutes Essen, guter Service, eine Frau, die einige anständige Fähigkeiten im Management hat (normalerweise ist der Ehemann der Koch). (italienisches Essen scheint gut zu sein)

2. Ein bisschen riskant ... aber etwas Land zu haben und ein paar Mieten darauf zu platzieren, kann erfolgreich sein. Weniger intensiv als jeden Tag zu kochen ... aber eher eine Investition . Das Risiko ist natürlich … nun, ich bin sicher, die meisten hier können es erraten.      

 

And this with 500.000.-THB ??? ????

[Richard 2020]

I have been living in Thailand for 32 years now!

A (Serious) business is not possible for 500.000.-THB!
I have experienced several "business founders", but no one successful!
Unless he starts with at least 5.000.000.-THB and has "healthy" relationships and does not need resident lawyers, but contacts who are successful years on the ground!

Alone the "Shareholder" according to the contract 30% profit sharing for your investment in writing had nothing in the end!
There was simply no profit generated ... ????

And really very rich "Farang" with very good relations, had to leave the country already, because they became too successful!

Thailand is beautiful to live there, not for work!  My opinion only!

 

[Jerno]

Be wary that in a year or so you will have competition setup all around you, then how to differentiate yourself and stay profitable?  After you take all the risk initially,  and they see you're doing ok, they swoop in and steal your hard earned business and customers.

[Hummin]

I would have started with a mobile juice bar, and invested in a cool good clean looking juice/ice cream bar concept, and if I managed to make money on that one, upgradedcto the restaurant part of the idea. Do not go all in, work up some experience first. 
 

After all the juice bar car, you can own in your name, its mobile and you can sell it if you want to give up, and only loose small start up expenses instead of having a year contract, deposits and more

[OneMoreFarang]

3 hours ago, rumak said:

If someone is a really good chef and has had restaurants before..... then i know around CM  a few that have done fairly well.  Good food,   good service,  a wife that has some decent skills in managing (usually the husband is the cook) .  (italian food seems to do well )

If there is enough demand then a good restaurant is certainly a possibility.

I remember when I arrived in Sukhumvit, Bangkok, about 25 years ago. I think we had two Italian restaurants in this area. In one the soup was good, and in the other the spaghettis - or something like that. At that time everybody was waiting for something better. And then they came, many of them. Now we have so many good Italian restaurants in this area that I am pretty sure opening another one and be successful would be very difficult. 

And one big issue seems to be the local fashion. There might be one restaurant which is somehow in fashion and everybody goes there. And then not anymore, it just happens. It must be very difficult to survive in a market like that - even without Covid.

[gk10012001]

My advice is find a seller quickly and get rid of the business.  If you haven't bought it yet, then don't buy it.  So many headaches.  If you like to handle problems then go ahead and jump in.

[gk10012001]

no chance of being done for the initial amounts you wrote. 

[The Hammer2021]

7 hours ago, weelittletimmy said:

2 months. What's the problem? I can't wait until I've been here 5 years before I try to do the things I want to do now.

 

I'm a big believer in learning from trial and error (within reason). I will use trial and error to learn how to run a small restaurant and business in Thailand, where the consequences of failure is a couple of <deleted> off customers, having to pay some random supplier a bit more for a few months, buy a replacement frige, etc. But it's not a valid approach for the legal foundation of your business.

 

My choices now are to:

a) stick to the support/advice I have now (lawyer, random local farang businessmen),

b) use all the people from #a, and on top of those get advice from this forum.

I choose B.

 

How did you get a work permit?

[The Hammer2021]

36 minutes ago, OneMoreFarang said:

If there is enough demand then a good restaurant is certainly a possibility.

I remember when I arrived in Sukhumvit, Bangkok, about 25 years ago. I think we had two Italian restaurants in this area. In one the soup was good, and in the other the spaghettis - or something like that. At that time everybody was waiting for something better. And then they came, many of them. Now we have so many good Italian restaurants in this area that I am pretty sure opening another one and be successful would be very difficult. 

And one big issue seems to be the local fashion. There might be one restaurant which is somehow in fashion and everybody goes there. And then not anymore, it just happens. It must be very difficult to survive in a market like that - even without Covid.

Do you have any training or background in marketing? I was here 25 years and in Bangkok there were  several  restaurants but not as you suggest. BUT go ahead with your plans- why not- you know the risks? And you know how much you can afford to lose.

[weelittletimmy]

On 7/30/2022 at 4:22 PM, DezLez said:

How is 150K going to cover both rent and Salaries for 6 months?

That does not even include all your other monthly recurring expenditure like your tax/WP/Elec/water/SS/ accountant fees etc if you are doing it legit!

 

Here's a single month's recurring costs as planned and vetted by a friendly farang restaurant owner:
-Rent = 5k (already have a verbal agreement, will sign next week once I speak to the lawyer)
-1 employee = 12k total for salary, 1k total for social security = 13k
-Electricity = 10k if I leave the AC on all day, a few k less with no AC
-Taxes = 3k
-Water = 1k
TOTAL = 31k/month

I will likely need 2 employees because I'm told I cannot rely on local workers 100%. So it may be 44k/month.

Administrative (accounting/etc) was included in the upfront costs.
These are all the fixed fees AFAIK.
What is WP?

 

 

On 7/30/2022 at 4:24 PM, TravelerEastWest said:

If you need to pay the Mafia don't start the business.

About the mafia and police, that seems inevitable in Phuket. My friend said as soon as you start making good money they will come by. But the amounts to pay are rather low.

 

On 7/30/2022 at 4:40 PM, transam said:

Is there a female involved in this somewhere....?

There isn't. This has been a personal idea of mine for a few years now, and now that I'm here the good mix of "place I enjoy staying at" + "low costs to start/run a business" + "big potential" has pushed me to do it.

 

On 7/30/2022 at 5:18 PM, KhunLA said:

Surely investing half mill baht into something you 'know' would be a better idea.

Put it in some boring investment account? I already have a little in those. ????
I want to test the viability of a specific idea I have, and here I have the opportunity to do it at a low-ish price in a place with potential.

 

On 7/30/2022 at 5:50 PM, Cardano said:

Best advise I can give you is go and talk with the expats running successful businesses in Phuket.

Thanks. I've spoken to a couple, and am being advised the most by one I've become friends with. Most of them suggest caution, all agree I should do it.

 

On 7/30/2022 at 5:55 PM, timendres said:

Gold

Thank you for this exhaustive response. I will take this advice to heart. I will make it a priority to find a reputable lawyer next week.

 

Unfortunately I don't have US citizenship. There's an American I would trust (distant relative, very wealthy) but to talk him into flying to the opposite end of the world and getting into something he knows nothing about is a hard sell, especially for what is a toy project relative to his usual business. I will discuss this with the lawyer. Perhaps all can be arranged remotely.

 

About your last paragraph, I'm glad you get it. I'm optimistic, but realize the money can be lost. Either way I will have gained a lot of experience from it, and most importantly, I will not think back with regret 10 years from now. It's been a personal fantasy of mine to open a restaurant even before I was a student. I always thought "I'll graduate, work for a few years to save up, then open a place" but life being what it is, friends/gf/family/laziness/etc taking up the time, I saved less than I should have, I remained a salaried employee and never started a business because it was just easier. (Also I had moved to America where not only is it more expensive to open a place, but you'd be competing against much more talented people who make some of the best food in the world)

 

 

On 7/30/2022 at 6:04 PM, marin said:

I wish you all the luck in the world but make sure you have a lot more than 500,00 to invest, there are going to be over runs on most things you have budgeted. Brave dude to start up a business with so little knowledge of Thailand. 

Thanks ????
I have more but wasn't planning on using it unless I start seeing something positive. I'll get out if it starts feeling like quicksand. We'll see.

 

On 7/30/2022 at 6:27 PM, 1FinickyOne said:

But, business anywhere has its risks... mostly that if you are successful there will be 3 similar shops coming soon - don't expect any business anywhere to be hassle free... you will have to deal w/employees, competitors... etc etc.. 

I know. It cannot be avoided, it's not like I can buy the land around me. Hopefully by the time it comes to this, I will have more experience and can beat the competition with quality. One positive sign: from what I've observed, the people here don't like a race to the bottom, so I won't be driven out with aggressive pricing:
-I drive by dozens of huge empty restaurants every day that would rather stay empty than adapt and lower their prices temporarily from 400 baht/meal
-Before I got my motorbike, taxi drivers (who've been sitting all day outside Family Mart without a single customer) would rather refuse me as a passenger than agree to the rate I tried to bargain for. I was offering 350 which was 50 over the Grab rate, they wanted 800, wouldn't come down below 700. I still see them now every time I drive by, sitting all day without any customers.

 

21 hours ago, Hummin said:

I would have started with a mobile juice bar, and invested in a cool good clean looking juice/ice cream bar concept, and if I managed to make money on that one, upgradedcto the restaurant part of the idea. Do not go all in, work up some experience first. 
 

After all the juice bar car, you can own in your name, its mobile and you can sell it if you want to give up, and only loose small start up expenses instead of having a year contract, deposits and more

Other than the "mobile" part, you read my mind, that's exactly what I'm planning. It will start as a health-oriented juice bar, which is hard to mess up. It will double as an ice cream parlor soon (reselling local ice cream), since the only investment required is a large freezer. This buys me time to focus on the food.

 

I've never seen a mobile restaurant here, except for Thais on a motorbike selling soup to local employees, and the stationary stands like 5 King Chicken or whatever outside Tesco. Certainly haven't seen the equivalent of the American "burrito truck". Do mobile restaurants really exist in Thailand?

[timendres]

5 minutes ago, weelittletimmy said:

I've never seen a mobile restaurant here, except for Thais on a motorbike selling soup to local employees, and the stationary stands like 5 King Chicken or whatever outside Tesco. Certainly haven't seen the equivalent of the American "burrito truck". Do mobile restaurants really exist in Thailand?

Thaiger burgers in Bangkok did exactly this. A large van converted into a popup restaurant that can locate anywhere. Very very successful. There are other examples. It has a large appeal, as you can move your location to where the action is. Of course, that assumes you can make a deal with some property owner to park at their location, and you must pay for that privilege, and you run the risk of not being able to locate where you want to be. It has the added advantage that you can simply "close" without any cost - as opposed to renting a location where you pay the rent open or not. It is worth consideration, but has a higher upfront cost in the vehicle. It may not be the best choice for your concept.

 

8 minutes ago, weelittletimmy said:

TOTAL = 31k/month

I will likely need 2 employees because I'm told I cannot rely on local workers 100%. So it may be 44k/month.

So I would plan for 50,000 per month. Ask yourself, can you get to break even on that number within 12 months?

 

8 minutes ago, weelittletimmy said:

Administrative (accounting/etc) was included in the upfront costs.

You will be paying for accounting on a monthly basis, but it should be less than 5K.

 

9 minutes ago, weelittletimmy said:

What is WP?

Work Permit.

 

[DezLez]

53 minutes ago, weelittletimmy said:

TOTAL = 31k/month

31,000/monthx6months=186,000.  Your budget is 150,000. And that is just at your cheapest estimated illegal route!  It is 264,000 at your 41k/month illegal option.

 

If you are going to be even remotely legal with a WP etc you will need 4 staff and have to "pay yourself" your nationality's min wages, pay tax on it and SS for the staff etc.

You are way over budget both in the legal and illegal routes going by your own figures!!

Edited July 31, 2022 by DezLez

[Hummin]

Another problem that you need to consider, is when you are going to extend after a year or two, thats when you might get surprised. 
 

It is not uncommon businesses have to close or move  because of Landlord issues.

 

Your concept would be much easier with a food truck and less worries. 

Edited July 31, 2022 by Hummin

[Don Chance]

You should open a roller skating rink.  Really easy business.  Local Thai kids will love it. Farangs too.

[JacksRiVe]

Being a first-time business owner can feel like diving into uncharted waters, huh? I remember feeling the same when I started out.

[JacksRiVe]

4 hours ago, JacksRiVe said:

Being a first-time business owner can feel like diving into uncharted waters, huh? I remember feeling the same when I started out.

One piece of advice that really helped me was investing in a CRM solution that can grow with you. It's like planting a seed that grows alongside your business, adapting to your needs as you scale up. Trust me, having a system in place to manage customer relationships efficiently is a game-changer.

Edited April 19 by JacksRiVe