What Makes A Successful Business?

[Ulysses G.]

In the old days, at least one could pay the police off to ignore these forced closing days.

It becomes more and more difficult for businesses to pay their giant rents for which one is charged each and every day - holiday or not. Landlords have the biggest scam going!

[bangkokrick]

In the old days, at least one could pay the police off to ignore these forced closing days.

It becomes more and more difficult for businesses to pay their giant rents for which one is charged each and every day - holiday or not. Landlords have the biggest scam going!

Thats a fair point 'Ulysses G it must be tough on business owners to lose up to 4 days trade when they are already possibly struggling to make ends meet. They still have to pay their overheads.

Cheers, Rick

[Ulysses G.]

I don't own a bar, but this year I really fell sorry for people who do. So many days lost when income is down to start with.

That doesn't even address the fact that so many tourists come here every year to drink and party and often find that everything is shut down way too early and way too frequently.

Some day, I'm afraid, Thailand will wake up and find that the Golden Goose has moved to Cambodia and is not interested in coming back!

[mcgriffith]

It does seem a bit simplistic to close the bars on election eves and Election Day in Thailand.

But in all fairness, it is a be-knighted, errant and mis-guided law......that unfortunately is the law of the land. And even in the land of milk and honey, the Yew Es of Ehhhhh...there are COMPLETELY DRY COUNTIES, 24/7, 365 days a year! Pure municipal hiri-kiri, if you ask me...

SOOOOOO, of course you were prescient enough to stock up for the suspension period?

[Blinky Bill]

In my opinion, for what it's worth, if an entertainment establishment cannot survive after closing for 3 or 4 days then the business is in a very sad state of affairs and not a viable business. Better off closed for good.

[cm das]

In my opinion, for what it's worth, if an entertainment establishment cannot survive after closing for 3 or 4 days then the business is in a very sad state of affairs and not a viable business. Better off closed for good.

These closures happen all the time. I'd think any sensible 'entertainment establishment' owner would set aside an election/Buddhist holiday/mourning period fund to cover the loss of income when venues are forced to close.

[Ulysses G.]

In my opinion, for what it's worth, if an entertainment establishment cannot survive after closing for 3 or 4 days then the business is in a very sad state of affairs and not a viable business. Better off closed for good.

This should also apply to any business owned by foreigners that consistantly makes less than 30,000 baht per month profit. They drag down businesses that should be successful.

[Crow Boy]

In my opinion, for what it's worth, if an entertainment establishment cannot survive after closing for 3 or 4 days then the business is in a very sad state of affairs and not a viable business. Better off closed for good.

This should also apply to any business owned by foreigners that consistantly makes less than 30,000 baht per month profit. They drag down businesses that should be successful.

These are sweeping statements made by both of you. Many small bars and restaurants run much closer to the wire where every day closed has a significant effect on their viability. Perhaps you would feel differently if forced to close for three days in a row and still pay for staff. The mark up of alcohol in this price sensitive town is comparatively low considering the costs incurred to run the business. Perhaps they don't have rich benefactors behind them or large retirement funds to help fund their business.

CB

[Ulysses G.]

Perhaps they don't have rich benefactors behind them or large retirement funds to help fund their business.

My experience is that these types of businesses are usually the ones that ARE living off of rich benefactors or large retirement funds. They could never survive on what they earn, but by staying open anyway - so that the owner has "something to do" - they drain funds from succesful businesses that actually provide something that the public wants.

These hobby businesses that have swamped Chiang Mai are one of the reasons it is so hard for legitimate businesses to make a profit. 50 lousy restauraunts on Loi Kroh Road are all serving practically the same grub and have 2 customers each. How are tourists supposed to know which three places actually serve decent food?

I am speaking in generalities about businesses that are pretty much not needed or not putting their hearts and souls into providing something that the public needs. There are restaurants that have not really caught on yet, but are working hard to have the best food and best atmosphere and - most likely - someday they will catch on. These are the type of businesses that deserve to thrive.

Edited February 23, 2008 by Ulysses G.

[Mestizo]

Perhaps they don't have rich benefactors behind them or large retirement funds to help fund their business.

My experience is that these types of businesses are usually the ones that ARE living off of rich benefactors or large retirement funds. They could never survive on what they earn, but by staying open anyway - so that the owner has "something to do" - they drain funds from succesful businesses that actually provide something that the public wants.

These hobby businesses that have swamped Chiang Mai are one of the reasons it is so hard for legitimate businesses to make a profit. 50 lousy restauraunts on Loi Kroh Road are all serving practically the same grub and have 2 customers each. How are tourists supposed to know which three places actually serve decent food?

I am speaking in generalities about businesses that are pretty much not needed or not putting their hearts and souls into providing something that the public needs. There are restaurants that have not really caught on yet, but are working hard to have the best food and best atmosphere and - most likely - someday they will catch on. These are the type of businesses that deserve to thrive.

Although it strays from the original intent of this thread, I feel compelled to mention that you are overlooking at least one extremely important aspect that these businesses bring to the table and that being price competition. As a consumer, I don't care about a "legitimate business"'s profit margin. If a "hobby business" can supply me the same goods, at the same level of quality, and at a lower cost, then guess where I, as the consumer, am going to go.

This competition is fundamental in a free and open capitalist marketplace. It stimulates innovation, encourages efficiency, and drives down price. (thank you wikipedia!) If the "legitimate business" is having a difficult time trying to turn a profit due to a competing "hobby business", then maybe that business should adjusted their expected profit margin and take measures to be both more innovative and efficient.

In the Loi Kroh restaurants example you provided above, maybe if one restaurant took measures to be more efficient (perhaps reduce headcount and have remaining their staff perform additional tasks other than standing around looking bored) and to be more innovative (i dunno, maybe clowns and dancing monkeys! for patron entertainment, financed by savings in the reduced staff headcount or course), they would be in a much better position to succeed while the other's failed.

Additionally, I think your statement that hobby businesses "drain funds from successful businesses that actually provide something that the public wants." is a bit contridictory. If customer's are patronizing these other shop, then obviously they too, are providing something that the public wants. And that should be viewed as some measure of success.

Just my $0.02,

-Mestizo

[Ulysses G.]

Additionally, I think your statement that hobby businesses "drain funds from successful businesses that actually provide something that the public wants." is a bit contridictory. If customer's are patronizing these other shop, then obviously they too, are providing something that the public wants. And that should be viewed as some measure of success.

If we were in London or San Francisco, the high rents would soon weed out the bored "retirees" with nothing to do, from serious businesses with knowledge about what they are doing, but in Chiang Mai, there is a constant steam of foreign suckers with too much money arriving to replace the foreign suckers that already threw their money away.

If the bored retirees want to sell subsidized potato chips and canned Cokes in a little Mom and Pop shop, you are right, most people rather go for the cheapest price - even if it hurts a bunch of Thais who are making very little profit anyway - however, if Mr. Retiree wants to open a crudy little restaurant with the same stuff as everyone else is selling, a certain number of customers will go there simply because they don't know any better. If there are enough of these crudy little restaurants to damage the Duke's or Queen Vics profit margins, they might have to move somewhere else.

That leaves us with a bunch of crudy little restaurants, instead of a few good ones. Personally, I rather have the Elizabethan Restaurant stick around!

[Blinky Bill]

In my opinion, for what it's worth, if an entertainment establishment cannot survive after closing for 3 or 4 days then the business is in a very sad state of affairs and not a viable business. Better off closed for good.

This should also apply to any business owned by foreigners that consistantly makes less than 30,000 baht per month profit. They drag down businesses that should be successful.

These are sweeping statements made by both of you. Many small bars and restaurants run much closer to the wire where every day closed has a significant effect on their viability. Perhaps you would feel differently if forced to close for three days in a row and still pay for staff. The mark up of alcohol in this price sensitive town is comparatively low considering the costs incurred to run the business. Perhaps they don't have rich benefactors behind them or large retirement funds to help fund their business.

CB

In my opinion again, for what it's worth. Get rid of these places that have trouble surviving if forced to close for a few days. There are way too many in Chiang Mai, and other tourist destinations in the country for that matter. Most have more staff than patrons and quite often these slow businesses seem to employ less than friendly staff. What's attractive about a 3 metre x 5 metre hole in the wall with a bar and a few shelves with mirrors behind and a cheap HiFi system pumping out noise at way too many decibles? Then they have the cheek to charge 85 baht for a semi cold beer.

These places are often opened by some silly farang who arrives with a wad of money with the intention of living out his life in Thailand on the profits from the new business, usually lost that wad of money in a year or 2 then leaves. Some hang around wondering why life has treated him so badly.

Although I prefer quiet places a crowded bar will generally attract more customers so leave it to the successful businesses to carry on.

As I said earlier, this is my opinion for what it's worth.

[JuniorExPat]

There seems to be a growing faction in support of the nationalisation of our city's bars, restaurants and book shops which would obviously improve the quality of the products and services provided, whilst removing the nasty atmosphere created by free market competition. I admit it's an interesting idea but I think we need to get through this current set of elections before giving the politicians economic challenges of this nature.

So, back on topic, is it possible to buy alcohol in wholesale quantities anywhere today? A badly timed bbq at JxP Manor could be rescued by this information!

Thanks,

JxP

[FarangCravings]

LOL I had to laugh at the comments about get rid of all the small bars and let the successful ones take all the business how does one do that ????

Your never gonna get rid of the little crummy bars and they will continually change hands after a few months and i see it all the time but some people like crummy little bars that sell cheap beer instead of going to the QV or others and be charged an arm and a leg for the same product. People are different and like different things, for example i liked the old N1 bar i dont really like the new #1 Bar some people here dont want to go to Bars with bargirls while others on this site Bar crawl through all these crummy little bars looking for Bargirls

The successful Bars will continue to be Successful and the crummy bars will keep changing hands and the retiree will continually lose his money multiple ways with a crummy little bar being just one of the many ways he will be relived of his retirment account.

Motto of this post

Different Strokes for Different Folks

[Crow Boy]

I took these posts out of the All Bars Closed Today..... etc thread because they were off topic to the discussion but make an interesting thread.

I would like to continue to discuss what makes a business a success and should small subsidised businesses be allowed (?) or encouraged to remain open even when not a viable entity (in whose opinion?)

CB

[Heng]

In the old days, at least one could pay the police off to ignore these forced closing days.

It becomes more and more difficult for businesses to pay their giant rents for which one is charged each and every day - holiday or not. Landlords have the biggest scam going!

Yeah, landlords want you out of business so you stop paying rent. It's much more fun to send employees around to sweep and clean up empty buildings and shops.

[funfun]

I took these posts out of the All Bars Closed Today..... etc thread because they were off topic to the discussion but make an interesting thread.

I would like to continue to discuss what makes a business a success and should small subsidised businesses be allowed (?) or encouraged to remain open even when not a viable entity (in whose opinion?)

CB

like it crow boy and good idea!

so ill try get it going,

when things are tuff in business, same in life, and things seem to be holding ya back, thats the time to try a little harder, whatever it takes, youll still get people trying to bring ya down, you let em ya lost!

i take note from an earlier poster about 85 bhat for a warm beer, its that lack of service, not always price that makes us spend or not, and where!

someone mention earlier about a lot of rester aunts togeather and some maybe shouldnt be there cos how would customers know the good from the bad?

well bangkok would look pretty silly with 1 resteraunt 1 bar 1 shop 1 bank etc

we all shop the same as a rule, that old saying never use a chip shop that hasent got a que!

some people buy with the attitude of well my retirement will keep the bar or cafe or shop going? why buy anything you want to make you money if ya gonna pay it money?

you wouldnt pay a guy to paint the outside of ya house, then you do it while he watches ya tv eating ya breakfast!

thats my 2p as posts keep saying!

chris

[cnxmike]

Well, I live now for almost two years in Chiang Mai. In the meantime I got to know a lot of bars and restaurants, which don't have much customers, if any at all. But they are still open. The only explaination I have is as UG wrote: They are probably run by farangs with a good pension, who want to please their thai partner, or do it as a pasttime.

Economy wise it makes no sense.

Edited February 23, 2008 by cnxmike

[Crow Boy]

One of the things that make me interested in this is when is it ok to subsidise a business and when is it wrong?

When a business starts it needs capital and in Thailand that almost definitely means from personal savings because getting a bank loan is pretty unlikely. So if I am a recent cashed up escapee from the west with a healthy bank balance and in my wanders come to Chiang Mai, see a nice little bar/restaurant/bookstore/internet cafe etc should I buy it?

I sold my business in Samuii to a new arrival - he offered us a price that we really could not afford to ignore. We had been thinking (seriously) about selling and the opportunity came along in terms of a cash "walk in, walk out" deal. We agreed to the price and the transfer happened. As part of the deal I offered to stay on for a month after the transfer to advise the new owner. He had retired from the UK and had never managed a business in his life (wage/salary earner) and needed a lot of help. Did all the right things for him and helped him a lot. We left and had a whole lot of new stuff to start. Long story short - despite my repeated suggestions that he change NOTHING until he had at least a year under his belt and experience to try some new things he changed almost everything. The suppliers, maintenance people, the staff, the theme and the decor. Nothing was the same and he went from what we had which was a definite theme to a generic model which was the same as everyone else. After 6 months he had lost most of his trade and a whole chunk of money, he put the place up for sale and I was told finally managed to sell it at a very reduced rate. The second owner also had no experience and ran it down even further. Last I heard it was now a vacant building and could be bought for the rental only. In less than 18 months the business had gone from being very good to nothing.

Were we wrong to sell it? No I don't think so.

Did we do anything wrong by the buyer? No, we initially tried to persuade him from it saying he would be better off in a small place with lot lower overheads and much fewer staff. I then gave him an unpaid for one month tutorial in every aspect of the business.

Where did he go wrong? I am not sure of all the issues because we had left the island and come to CM however I think he unwisely tried a hit and miss approach where he changed too many things and then didn't know which change made what result so couldn't reverse the bad decisions and enhance the good ones.

What could we have done different? Well if I had known I would have probably gone back there and renegotiated a new lease and taken it back on. Would have saved me a lot of money but even so I am not sure if the business could have been resurrected. Too many outside factors had also changed.

BB made the statement that any business that cannot survive being closed for three days in a month is not a viable option and better off closed. I know where he is coming from there but it is pretty much a blanket statement. If my daily intake in the business is 10,000 baht and I have 6 full time staff plus electricity, purchases, materials etc my actual profit may be as low as 1,000 baht which by UG's statement is the minimum that a business should make to be regarded as successful anything less makes it a retired person's hobby not a legitimate business.

Ok is that in the first week? month? year or after how many years? How many days/weeks/years should a business use up capital before it makes a profit and become legitimate?

CB

[funfun]

"rule of thumb, ya should hope to get ya capital dough back 2 years, cant go for everything that, but a small busines deff!

[solent01]

LOL I had to laugh at the comments about get rid of all the small bars and let the successful ones take all the business how does one do that ????

Your never gonna get rid of the little crummy bars and they will continually change hands after a few months and i see it all the time but some people like crummy little bars that sell cheap beer instead of going to the QV or others and be charged an arm and a leg for the same product. People are different and like different things, for example i liked the old N1 bar i dont really like the new #1 Bar some people here dont want to go to Bars with bargirls while others on this site Bar crawl through all these crummy little bars looking for Bargirls

The successful Bars will continue to be Successful and the crummy bars will keep changing hands and the retiree will continually lose his money multiple ways with a crummy little bar being just one of the many ways he will be relived of his retirment account.

Motto of this post

Different Strokes for Different Folks

Put me down for one that likes the quality bars, I would rather pay a few more Baht for good food, cool clean draft served with no hassle, than go to a small grubby bar with shadey clientelle anyday. The new No.1 being my choice at the moment (although they don't sell food direct), if I want small seedy bars packed with wan***s, Pattaya is full of them, and believe me, when the mood takes me I'm there. Chiang Mai is a different scene (thank god), and I hope it stays so.

[sriracha john]

I'm not sure I understand this use of the term, "legitimate" in some of these posts. To me, it seems it is being used inappropriately.

It has negative connotations that really shouldn't be used to describe a business... because when it's applied as "hobby business or legitimate business" it truly implies that the hobby business are "illegitimate." Now if they actually are illegitimate or illegally run, that's a different ballgame, but that's not what is being implied.

When it's used as an "either/or" like that it besmirches any business, hobby included, that in reality, actually IS legitimate.

I completely agree with mestizo in that market forces will drive whether a business succeeds or fails... it should not be implied that if a business is not highly visited or generating huge profits in multiple outlets, that for some reason it makes it less desireable... or deserving of its labeling as "illegitimate."

The other reality from mestizo is that as consumer's we don't really give a rat's ass about whether or not the business is making a huge profit, a moderate one, or even operating at a loss. Appeal to me by virtue of a good product at a good price... but don't appeal to me by virtue that if you, as owner, make a big profit, it's somehow good for all.

Wow me with your advertising, or your service, or your special no-one-else-does little nuances.... but you can keep your "oh, but we're a legitimate business because we make "x" amount of baht per month so you should come and support us and patronize our establishment."

Edited February 23, 2008 by sriracha john

[solent01]

Edit......

Off topic

Edited February 23, 2008 by solent01

[sriracha john]

oh well, it's gone now... but just to clarify, solent, I was not addressing just one poster.

and no... no businesses here. I'm strictly a consumer.

[solent01]

Fair do's, I have though, glad I had the sense not to get involved in the "entertainment" sector though

[sriracha john]

Fair do's, I have though, glad I had the sense not to get involved in the "entertainment" sector though

I hope it's not a Charlton Heston-inspired restaurant....

[solent01]

Something far more trivial for me, still, my staff are happy with the regular income, and it gets me out of bed "some" mornings.

I never did see the interest with owning/running a bar, resturant or guest house though. Too much like hard work for my liking (and with the former, having to deal with the ever gready BIB must be a right headache) done that years ago (the hard work), didn't move here to carry it on Now I try to do as little work as possible yet maximise the return on my investment, dosn't always go to plan, but mostly works out, and with a new venture in the pipe line. I must love the punishment

[Ulysses G.]

BB made the statement that any business that cannot survive being closed for three days in a month is not a viable option and better off closed. I know where he is coming from there but it is pretty much a blanket statement. If my daily intake in the business is 10,000 baht and I have 6 full time staff plus electricity, purchases, materials etc my actual profit may be as low as 1,000 baht which by UG's statement is the minimum that a business should make to be regarded as successful anything less makes it a retired person's hobby not a legitimate business.

Ok is that in the first week? month? year or after how many years? How many days/weeks/years should a business use up capital before it makes a profit and become legitimate?

CB

I can't really answer this because establishing a business takes time, but I can easily name quite a few foreign-owned businesses here that have been open for years, but have almost always made less than 30,000 per month profit with a working farang who is paying for a work permit, etc., which to me is just not worth all the red tape and hassle with the Government, never mind being just a waste of time.

Others have never made ANY profit or actually lose money month after month (which they make up from their own bank accounts). To me, - unless they are charitys - these are pretend business, not real ones and I strongly suspect that the owners are raving idiots or what they call mentally challenged for lack of a better term. Why pay money to work when someone will pay you for it?

[cmsally]

A successful business from the point of view of the business owner is one that takes as little input from the owner (in terms of investment and working hours) as possible, for maximum rate of return. A successful business from the point of view of the competitor and customer is the one that has the most customers and is selling the most "product".

Even with the extensive promotion of fair trade and small business interests that are paraded around, the customer is basically a mercenary entity.

I think if you want to run a successful business here you definitely need to be ruled by your head and not your emotions. Even amongst the Thais there is a big streak of eternal optimism when it comes to running businesses. A lot of people will pump in more and more cash with little thought to rate of return.

Where a lot of people fall flat on their face would be to pump in more cash to keep up with their "successful" competitors, who have invested so much that their rate of return is minimal.

As always in business, the numbers don't lie.

As for weeding out the "non legitimate" businesses, I doubt its possible and I'm sure the customer will be enjoying subsidised products for as long as they are available. The only to way to beat it is to think of a way to make money from the stream of unsavvy cash laden budding entrepeneurs!

[Blinky Bill]

A successful business from the point of view of the business owner is one that takes as little input from the owner (in terms of investment and working hours) as possible, for maximum rate of return. A successful business from the point of view of the competitor and customer is the one that has the most customers and is selling the most "product".

Even with the extensive promotion of fair trade and small business interests that are paraded around, the customer is basically a mercenary entity.

I think if you want to run a successful business here you definitely need to be ruled by your head and not your emotions. Even amongst the Thais there is a big streak of eternal optimism when it comes to running businesses. A lot of people will pump in more and more cash with little thought to rate of return.

Where a lot of people fall flat on their face would be to pump in more cash to keep up with their "successful" competitors, who have invested so much that their rate of return is minimal.

As always in business, the numbers don't lie.

As for weeding out the "non legitimate" businesses, I doubt its possible and I'm sure the customer will be enjoying subsidised products for as long as they are available. The only to way to beat it is to think of a way to make money from the stream of unsavvy cash laden budding entrepeneurs!

But often to a potential buyer the books do.