Too good to be true?

[Sunbelt Asia]

The following business was listed on our site at www.sunbeltasia.com It has been acquired and is no longer available..

An Internet Cafe with an A1 location in Sukhumvit Soi Four. With Nana Plaza nearby and a stream of ready made tourist traffic to exploit, this great business is making superb profits of 2.4 million Baht from revenues of 3.8 million Baht. Established now for three years, there is even a loyal local customer base to rely on. The business is fully equipped with high speed equipment, and staffed by a highly regarded team with good language skills. There are ten computers in place and a pop phone e-mail translation system. In Real Estate, everyone looks for location, location, location, but in Businesses For Sale, the winning adage is always location, management and track record. Many businesses don't have all three qualifications, but this internet cafe has them in spades, and all fully documented. The owner is only selling at this bargain price as she is motivated to raise funds to pursue a totally different niche investment. For an asking price of 2.2 million Baht, you will get great profits and assets of a million Baht.

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On another forum, a question was raise was it too good to believe because at one baht a minute. All 10 computers would have to be going for 17 hours.

This is a matter of having all the facts.

For instance this Internet Cafe charges 3 baht a minute. So you would only have to have 3 computers being occupied. Perhaps less with faxes, telephone calls, printing, etc.

History is no guarantee of the future but it does help. An international law firm that charges USD$400 an hour, did a full due diligence on the share holdings, lease and financial records. The new manager who is an ex-business broker in the States did one as well. He looked at the sellers bank statements, looked at her life style and of course her financial records. He spent 5 hours in three different meetings drilling the owner on the business.

Questions were raised why sell it for such a low price when the seller would have the same return in 11 months. Typically to acquire a business, you would have it paid for in 2.5 years. The seller wanted to open an ice cream factory. The business plan and blueprints were asked for by the buyer to confirm the story. They were proudly given by the seller. She had them in her briefcase.

Questions were raised what would stop someone else from opening next door and lowering the price. The reason why is the rent charged in the area. It would be cost prohibited for someone to do so unless it was a hobby. The lease on this building was excellent and anybody else starting a business would have a much higher rent. If they could find a space to begin with!  Most bargirls are lazy and they will gladly pay 3 baht a minute versus one baht a minute 5 minutes away.

That’s why due diligence is important to obtain all the facts and then make an intelligent decision. It does not guarantee you’ll be successful but it sure helps.

Using this as a case study. I would be happy to answer any and all questions. Thank you.

[LPCustom69]

And this business would qualify for at least one work permit, correct?

:cool:

[Sunbelt Asia]

It would qualify and did. The key is the title of the position.   They put a number of responsiblilities for the job title description so it fell under a classification that could be accepted.

[singa-traz]

3 Baht a minute ... that's the most expensive Internet Cafe that I have heard in Thailand ...

180 Bahts an hour, when you can find others that charge 20/30 Bahts per hour ...

I must see what's so special, to understand why people will be ready to pay such premium ... it can't just be the location ...  

[singa-traz]

Got it: Nana Connection

http://lite.businessesforsale.com/1293401/169749.html

Or Google Cache:

http://www.google.com.sg/search?....e=UTF-8

[Sunbelt Asia]

Singa-traz,

Actually three baht is quite common in the prime areas of Bangkok such as directly around Nana and Silom Patpong area.

Novotel Hotel Siam Square charges 5 baht a minute.

And the winner for highest rate in Thailand is...

Phuket Airport where its 100 Baht for every 15 minutes( 6.5 baht per minute)

It all comes down to location. With the high rents you are almost forced to do so unless you get a super lease  like this business has.

[abeel]

hi,

i am looking for a tailor shop between soi 1 and soi 15 of sukhomvit ..thank,s

[Sunbelt]

That’s a very Good business.  We just had three Indians in my office for a closing on some real estate. Two were brothers and one son was all tailors. The brothers started over 40 years and owe their wealth to the American GI's. The Chinese use to own the Tailor shops but the GI's needed someone to speak with English. The Chinese would have the Indians speak English and measure them. The Indians then had the idea, we can do this ourselves. Soon the Chinese were the ones measuring and the bosses were the Indians. That’s how they got started. The rest is history.

No Tailor shop in that area right now in our portfolio. But will have our staff make some calls.

[singa-traz]

Thailand's online gamers face curfew

http://straitstimes.asia1.com.sg/latest/st...,198682,00.html?

Game servers, both local and overseas, will be blocked from 10.00pm to 6.00am daily from July 15 to Sept 30, while Internet cafes will also have their hours curbed to those times, Mr Surapong told reporters.

... time to sell your Internet Cafe, right ? ... before new legislation eat your profit margin ...

[Sunbelt]

http://www.bangkokpost.net/News/08Jul2003_news07.html

Bangkok Post says only “Fear of teen abuse shuts down `Ragnarok' " which will be for two months between 10 pm to 6 am.  According to this paper, the adult areas of Internet Cafes should not be affected but you never know about any new laws.  If hours were shorten, the girls would just get up earlier to write about the buffalo needing tennis shoes.

[PedSuam]

Sunbelt, I'm curious about 2 things:

1. Do you provide a service to locate central Bangkok meeting rooms (to rent at fixed times, fixed days). I'd want to run some business workshops.

2.  I'd love to have some more info on the "2 million baht capital investment = 1 work permit" rule.  e.g what other criteria need to be filled, what ratio of thai to foreign employees must be maintained, does the capital need to be "working" etc. Given that a reliable friend has just registered a legal business (with the dual purpose of buying a house, already done, and also to employ me to take care of making some money!).

Any help, links or pointers would be great, thanks in advance.

[Sunbelt Asia]

" Do you provide a service to locate central Bangkok meeting rooms (to rent at fixed times, fixed days). I'd want to run some business workshops."

Yes we do....How many people and when?

"2.  I'd love to have some more info on the "2 million baht capital investment = 1 work permit" rule.  e.g what other criteria need to be filled, what ratio of thai to foreign employees must be maintained, does the capital need to be "working" etc. "

The laws have changed. If your friend will employ you for a salary of 30,000 Baht per month (if you're single) and your work description is one that the average Thai could not perform. The two million baht for every work permit (after the first one) and 4 Thais to every foreigner may not apply. You would have the requirement on the ratio for Thai-foreigners on a one year visa. But you would NOT have to have the ratio for a one year multi-entry visa.

On the initial paid up capital of 2 million baht that can be used as working capital.

Hope this helps.

[PedSuam]

Thanks Sunbelt, I'm awaiting a reply from my friend now after passing on your knowledge.  I hope to get this sorted out soon so I can proceed with my plans.

I'd be looking for a room to seat max. 10 people, nothing particularly flash...it could be a bookable room in a nice apartment complex depending on its location.  A whiteboard would be great, the hiring of a projector to link up to my laptop would be an added bonus.  October will be the month it all commences.