Why do people rush to buy a failing business?

[creative1000]

For example, I've seen the same coffee shop have 3 owners over the years and have never seen it full, and not surprised when the owner has to sell. But surprisingly, the new owner does the same exact thing expecting different results. I've seen this with Fried Chicken Kiosks, Bars, Restaurants, and small Hotels too. I'm also in Thai Facebook groups for business/franchise sales, and can spot local places changing ownership all the time. I even had a thai friend jump very quickly on a business, only to spend the next 4 months trying to sell it at 50% loss. 

[Celsius]

You really don't have a single clue if the business is failing or not.

 

My wife used to work as a franchiser for 7/11 long time ago and now has a lot of friends who opened those fried chicken kiosks and coffee shops are pulling a decent side income of around 20-30k a month per kiosk as a side business. They all have a job and a provident fund and this is just a side hustle to them. The investment to open a such franchise starts at 10 thousand baht and most do it because they literally get free training with it. Don't know how to make a coffee, waffle, bubble tea of fried chicken? You simply open a franchise and get free training with hands on experience. 

 

Also, many of these kiosks are registered on every single app... Grab, Food Panda, Robin Hood, Shopee and 10 other apps you don't know about. 

 

So, I bet you 80% of them do not fail. They just move on to better things or simply do not have the time to manage. 

 

 

Edited May 19, 2023 by Celsius

[ezzra]

Either what @Celsius said or that many think that they know better and they can make a go out it where others failed, also, the allure of owning your own business sometimes cloud the cool heads and judgments.

[Skallywag]

22 minutes ago, Celsius said:

income of around 20-30k a month per kiosk as a side business

Gross or net income?  If gross, then employee cost deducted, your own time deducted, ingredients deducted, space rent deducted, then you are likely losing money or working 12 hours a day for a few baht. 

[Celsius]

14 minutes ago, Skallywag said:

Gross or net income?  If gross, then employee cost deducted, your own time deducted, ingredients deducted, space rent deducted, then you are likely losing money or working 12 hours a day for a few baht. 

 

Income is income. Of course it is net profit. 

[FritsSikkink]

1 hour ago, Celsius said:

You really don't have a single clue if the business is failing or not.

 

My wife used to work as a franchiser for 7/11 long time ago and now has a lot of friends who opened those fried chicken kiosks and coffee shops are pulling a decent side income of around 20-30k a month per kiosk as a side business. They all have a job and a provident fund and this is just a side hustle to them. The investment to open a such franchise starts at 10 thousand baht and most do it because they literally get free training with it. Don't know how to make a coffee, waffle, bubble tea of fried chicken? You simply open a franchise and get free training with hands on experience. 

 

Also, many of these kiosks are registered on every single app... Grab, Food Panda, Robin Hood, Shopee and 10 other apps you don't know about. 

 

So, I bet you 80% of them do not fail. They just move on to better things or simply do not have the time to manage. 

 

 

Most people who start a business haven't got the basic knowledge to run one.

[FritsSikkink]

51 minutes ago, Celsius said:

 

Income is income. Of course it is net profit. 

In a business you talk about revenue, costs and profit before and after tax. "Income is income" is a useless phrase.

[NoDisplayName]

1 hour ago, Celsius said:

 

Income is income. Of course it is net profit. 

I'm only losing 30 baht on each item sold, but I make it up in volume!

[Jumbo1968]

There must be a demand for bars in Pattaya, they are making 60plus new bars on the old Made in Thailand site and by all accounts they have been let.

Soi 7 same foreigner who has 3 bars in Soi 7 has taken over Rosie OGradys and converting it into 2 separate bars,, 

There must be money to be made from opening a bar ?

[creative1000]

Thats the thing, I've seen the same cafe resold 3 times over 6 years. I've seen a bar change its name and ownership every two years. Clearly, the original idea wasn't a huge success, yet new owners keep throwing money at the same idea.

[scubascuba3]

8 minutes ago, Jumbo1968 said:

There must be a demand for bars in Pattaya, they are making 60plus new bars on the old Made in Thailand site and by all accounts they have been let.

Soi 7 same foreigner who has 3 bars in Soi 7 has taken over Rosie OGradys and converting it into 2 separate bars,, 

There must be money to be made from opening a bar ?

is money laundering a factor in these businesses that stay open but appear empty?

[Celsius]

Funny how coffee shops and kiosks suddenly become a bar topic out of nowhere. I am not usually the one who uses the phrase barstool knowledge, but sometimes it really shows.

 

 

I guess all those benz and beemers on the road are driven by stupid people who don't have a clue how to run a business in their own country. 

 

You guys are the absolute gems. Everyone in Thailand must be losing money.

 

Yes, it is hard to make a sale here, but not impossible.

 

Too funny.

 

 

 

 

 

 

[Celsius]

2 hours ago, FritsSikkink said:

In a business you talk about revenue, costs and profit before and after tax. "Income is income" is a useless phrase.

 

Yes. You are talking about people who work for one of the biggest employers in Thailand whos jobs is to basically find the best locations for CP. I am sure they are losing 30 baht on every sale. Absolutely hilarious. Of course income is meant as net income meaning profit. We are not talking about bargirl business here financed by a foreign mug,

[StayinThailand2much]

4 hours ago, Celsius said:

Don't know how to make (...) bubble tea of fried chicken (...)

I'd like to learn how to make bubble tea of fried chicken... ????

Edited May 19, 2023 by StayinThailand2much

[StayinThailand2much]

49 minutes ago, Jumbo1968 said:

There must be money to be made from opening a bar ?

Plenty of bars 'For Sale' in Pattaya. Either the owners got filthy-rich, then sold and retired, or...

Edited May 19, 2023 by StayinThailand2much

[bignok]

I think people think buy it cheap and build it up. Dream of theirs. 

[xylophone]

It happens a lot here in Patong and I could name quite a few café's and bars that have opened up in place of others that have closed down, and are now in the process of doing the same.

 

Owning a business here as bignok has said is a "dream of theirs" (Thai girls esp) and unfortunately the majority of people who do open small businesses/cafés etc really don't have a clue.

 

For example in my street there are three Italian restaurants which have opened and closed in fairly quick succession, four bars which have done the same, likewise a couple of cafés and I could probably name another three bars which will be on the market very shortly.

 

Suffice it to say that all of these "small businesses" had one thing in common – – a Thai woman who wanted to own her own business, and a farang who was willing to back her.

 

Having said all that, there are some profitable bars and restaurants here, but the small ones in the out of the way places are the ones which turnover quite frequently, and is not hard to see why.
 

[bignok]

6 minutes ago, xylophone said:

Owning a business here as bignok has said is a "dream of theirs" (Thai girls esp) and unfortunately the majority of people who do open small businesses/cafés etc really don't have a clue.

 

My mrs wants to. No experience, me neither. I said work in one for a year and see how it works. I think it's a silly idea.

[FritsSikkink]

58 minutes ago, Celsius said:

 

Yes. You are talking about people who work for one of the biggest employers in Thailand whos jobs is to basically find the best locations for CP. I am sure they are losing 30 baht on every sale. Absolutely hilarious. Of course income is meant as net income meaning profit. We are not talking about bargirl business here financed by a foreign mug,

You are not convincing me of your business acumen and economic skills with this rambling. 

[Furioso]

In answer to the OP, I think people rush to buy a failing business because they hate working a dead end job for no pay. They see an opportunity to be in charge, no longer be treated badly by an employer. I guess if they take over a failing business they at least learn many valuable lessons that can only be learned by getting their hands dirty. 

 

Let's face it, working for somebody and getting paid a very low salary is soul crushing. Better to strike out on your own, eventually you'll get it right and lead a much better life. 

[Jumbo1968]

Classic example, Candy Bar on Soi Bukhao, American fella spend a load of money, it was going to be a Go Go Bar, never opened, new owner moved in ripped it to bits appears to be doing ok now.

Bar across the road from Candy Bar called TNT, in all my years here it never ever appears to have any customers not surprised as they blast out Thai music constantly.

[hotchilli]

1 hour ago, Jumbo1968 said:

There must be a demand for bars in Pattaya, they are making 60plus new bars on the old Made in Thailand site and by all accounts they have been let.

Soi 7 same foreigner who has 3 bars in Soi 7 has taken over Rosie OGradys and converting it into 2 separate bars,, 

There must be money to be made from opening a bar ?

In the right location yes.

[Jumbo1968]

1 minute ago, hotchilli said:

In the right location yes.

But 60 ? there isn’t enough customers for the current bars even in high season.

[NorthernRyland]

Because, This Time It Will Be Different ™️

[Lacessit]

Rent of the premises is usually the business killer.

In Thailand, if the landlord sees a business is looking successful, they jack up the rent.

The business shuts up shop soon after when the operators realize they are merely working for the landlord.

[Denim]

Fools rush in where angels fear to tread.

[Cake Monster]

There are many reasons people rush to buy " failing Business's "

They may have a similar operation around the corner, and want to take the trade of this Business.

The Business is not failing at all, and is very Profitable.

They feel they can turn it around and make profit where the persons before have not 

Etc, etc etc

 

[Celsius]

1 hour ago, FritsSikkink said:

You are not convincing me of your business acumen and economic skills with this rambling. 

 

First hand experience, no farang bar business or barstool knowledge....

 

Up 2 u

 

And it is not my business acumen. I am not stupid enough to open a business in this country where odds are stacked against me. Take for example a laudry coin operated business my wife does as her side job. Most foreign mugs would get ripped off on rent alone. She uses her friends connections and pays no rent. When she finally transfers the business to her parents to you it will be a failure. To her it will be moving on to something else.

 

Most thais do business like this. They all know someone or somebody where they get some benefit.

Edited May 19, 2023 by Celsius

[Dan O]

6 hours ago, Celsius said:

You really don't have a single clue if the business is failing or not.

 

My wife used to work as a franchiser for 7/11 long time ago and now has a lot of friends who opened those fried chicken kiosks and coffee shops are pulling a decent side income of around 20-30k a month per kiosk as a side business. They all have a job and a provident fund and this is just a side hustle to them. The investment to open a such franchise starts at 10 thousand baht and most do it because they literally get free training with it. Don't know how to make a coffee, waffle, bubble tea of fried chicken? You simply open a franchise and get free training with hands on experience. 

 

Also, many of these kiosks are registered on every single app... Grab, Food Panda, Robin Hood, Shopee and 10 other apps you don't know about. 

 

So, I bet you 80% of them do not fail. They just move on to better things or simply do not have the time to manage. 

 

 

You dont get free training at any franchise unless you're some type of employee first. You pay to play. 

[Celsius]

7 minutes ago, Dan O said:

You dont get free training at any franchise unless you're some type of employee first. You pay to play. 

 

Well of course you have to buy a franchise first. What idiot is going to train you for free? The point is with franchise you can get first hand training and knowledge with very little investment. Then you quit and do it by yourself.

Edited May 19, 2023 by Celsius