Thinking Of Opening A Shop..

[bangbuathongben]

Hello forum, I am shortly returning home to work and save up some money so as I can return and possibly set up a little shop in a shopping mall. Does anyone have any prior experience or stories they can share with me relating to this subject. ie will it be worth the hassel? how easy is it or not? etc etc

[PeaceBlondie]

Hello forum, I am shortly returning home to work and save up some money so as I can return and possibly set up a little shop in a shopping mall. Does anyone have any prior experience or stories they can share with me relating to this subject. ie will it be worth the hassel? how easy is it or not? etc etc

Erm, pardon me if I'm being a teensy pedantic, but could you be more specific?

A) where's home? Where are you now? How old are you, and will you have family or friends pretending to help you while they suck the money from your account?

what's your work? Will this shop be your only work? How many hours per week?

C) How much money will you have saved to start up this store?

D) What do you intend to sell or service, jet bombers or bobby pins?

E) My prior experience was in auditing the tax returns of businesses and individuals and businesses. It is extremely easy to lose money in a business. Just ask Enron, Montgomery Wards, that British investment bank that failed due to a rogue trader in Singapore or Hong Kong, auto companies, numerous airlines, etc.

F) do you have a dozen years' experience in retail, wholesale, import/export, currency exchange rates, managing employees, complying with Byzantine laws and regulations, bribing officials, etc?

Etc etc

[Heng]

Whatever you're selling, are there locals (who don't have worry about 'overhead pressure' from housing and often business rentals, and visa runs) willing to do the very same thing at a 4% profit margin?

[bangbuathongben]

Well firstly blondie, I am very sorry i was so scarce with my thread. I am a 25 year old British man who has recently got married to a Thai, and also have a baby on the way. The reason for setting up this shop is mainly that i have a new family that I need to support. As I am not a computer wizz, and certainly dont fancy teaching kids how to say "my name is...." so I am stuck in a dilema!Especially seeing as I am a furniture designer and maker back home. My plan was to go home for 6 months save as much money as poss and open a shop, a food shop kinda like a Subway. I have seen potencial space and think it is in a good position ect. This shopping mall opens its doors at 11-00 and shuts at 21-00. It will be most likely be opened in my wifes name, and employees will be people who previously worked for her, so she trusts them to a certain extent. I will have enough money to open this store and get it fitted out, but am totally oblivious to monthly taxes ect. This was where I was hoping to grab some opinions from people, and tips! I hope this has explained more.....

[Sunbelt Asia]

Bangbuathongben,

I know you love your wife but please do not put the business only in her name. If you do please by all means set up the company that even if you are the minor shareholder you have some control by voting rights and be the Managing Director.

As for Subway, our cost is around 4.5 -5 million per store for equipment and build out. If you go this way, be sure to be in an area that is frequented by tourists or western Thais.

The good malls you can have a long term lease but some of them want you to pay the rent all upfront. For instance the Paragon is sold out and they wanted 25 years in advance.

MBK is the busiest mall in Bangkok now. Very hard to find space there!

As way of introduction, I’m with Sunbelt Asia; we are part of the World's largest Business Advisor network. Sunbelt has 389 offices and in fact we just open an office in Covent Garden, London, UK.

A number of people are in your shoes, no skills to find a job in Thailand and they need to support a wife and child.

Three options..

1. Find a job.

2. Start up a business.

3. Find an existing business that is good and is for sale.

Obviously, we think the third alternative is the best. Let's consider each alternative.

Get another Job

If you have the necessary skills, you might be able to get another job in Thailand. Furniture designer and maker will be tough job to find though. You might find one that will provide an income sufficient for your family. Even if you find a job, you may very well be back in your current situation in a very short time. Job security is definitely a thing of the past!

Start a Business

This is scary, and it should be! Once again, there are many different statistics regarding business start-ups, but everyone agrees that over 50% of new businesses fail within the first year. Why take such a chance with your future and the future of your family? There are many unknowns in a start up. How much capital will be required? How long will it take to open for business? Can you get the necessary permits? Can you afford the key money required by the landlord for your business? Construction delays and costs? How long will it take to get the income up to a point where you can start taking a salary? Etc., Etc., Etc.

Acquire an Existing Business...

Owning your own business is the "dream". But the reality is that buying a business is a serious financial and personal commitment that requires an understanding of what makes a business successful. All too often, new owners jump blindly into a business venture, overwhelmed by the tremendous workload of starting a business from the ground up. However an existing, established business that is acquired by a new owner shows a minimal failure rate.

If you have considered the thought of owning your own business, buying an existing business has many advantages over building a business from scratch:

You can review actual operating results rather than projections. If a business has been owned and operated by the same owner for a number of years and if that business has been the source of income for his family, you can be reasonably sure that the business is profitable and viable.

Immediate cash flow. No expensive advertising to lure customers - the cash register starts ringing the first day you take over, just like it did the day before for the seller of the business.

Trained employees in place. When you take over the business, you will have a complete crew of trained employees to run the business. No down time for training and no customer dissatisfaction with untrained employees.

Established suppliers and credit. For the most part, the existing vendors will continue to do business with you without missing a beat. Remember that they have been supplying the business for a while and they know it is a good business. They don't want to lose your business, they want you to succeed and buy more goods and services from them!

Established customers and referral business. Your customer base is already in place and it will, through referrals, continue to grow - unless you drive them away.

Existing licenses and permits. In many cases, all you have to do is transfer the licenses and permits to your name. In those cases where you have to re-apply for a license or permit, you have the comfort of knowing that the business, in its current location, was approved for the license or permit (for example, a massage license for a spa).

Training by the seller. In addition to the trained employees, you will receive training from the seller in how to operate the business. You will be introduced to customers and suppliers and will get the benefit of the seller's extensive experience in running the business. You will not have to make the same mistakes the seller made!

The availability of owner financing. Around 30% of the businesses that are acquired by using our services are financed by the seller of the business. The seller who finances your purchase of his business has a vested interest in your success.

One last thing, some people feel that only losing businesses are for sale. Stats will bear out though that businesses that are acquired have over a 70% success rate of still being open 3 years later. Look for a good business that is for sale because the owner is looking to retire, health reasons, burnt out, partnership dispute or divorce. Do your due diligence on 20 or more different businesses and then you can feel comfortable that the odds of winning are on your side.

www.sunbeltasia.com

[PeaceBlondie]

Thanks so much, Sunbelt Asia, for the very helpful response. I was tempted to be sarcastic, and you said it very kindly.

[Heng]

The good malls you can have a long term lease but some of them want you to pay the rent all upfront.  For instance the Paragon is sold out and they wanted 25 years in advance.

MBK is the busiest mall in Bangkok now. Very hard to find space there!

Well, the guy doesn't sound like a Paragon type renter (or at least he hasn't mentioned that he will be taking over the Omega or Prada distributorship in Thailand). You can however find space in MBK if you look for it. The 'seng' (that's Chinese term for the cost paid to the landlord to transfer the lease; it's arbitrary and basically a gratuity) on my friend's 2 meter x 3 meter shop was a mere 200,000 Baht; and then only 30,000 Baht a month -no need to prepay X months or years or whatever as the 'seng' covers that issue of goodwill-. Plenty of people rolling in it in MBK... plenty of people going belly up as well, sometimes economically, sometimes literally (which is your opportunity).

[bangbuathongben]

Thank you for your post Sunbelt it was very helpfull, although i most certainly was not thinking in the magnetude they you have elaberated in. I have however, found a space available in a shopping mall with a reasonable deposit and fairly cheap monthly rent. I think Heng has come closer to the sort of shop and cost i can afford. And as for PeaceBlondie very glad you didnt get sarcastic, as we cant all be as succesfull as you obviously are......

[NedKelly]

Surely there has to be a way you can use your skills in furniture making to some extent in Thailand. If you are creative then there has to be somehting you can do. Just look at what some people do with teak wood for example ! Maybe you could bring an idea and set up your own small factory and train the staff what to do.......but keep it small and simple at first. You could do this up country where everything....including local wages would be cheaper. You could end up as the manufacturer, exporter and then back in the UK...the importer and retailer of items......you would have to whole process sewn up from start to finish.