Mr opportunity or mr gullible?

[brianbrain]

Hi guys. I've been living in Thailand for about 8 months now. Not long I know, but I'm happy here and think it may be for the long term. Who knows?! Anyway, I've found myself  a comfortable job teaching and I'm happy living a low-cost lifestyle and making Thai friends. I could do this for a year, maybe two or three, though I'm not sure about long term. I have let my home in England so I receive a useful income from there too.

Question number 1: by the nature of my lifestyle* I tend not to meet many other farangs, so I'm asking you now, are there any other guys (or girls) leading a similar life? Or does everyone but me live in some expensive condo / spend time shagging bar girls? From the posts on this web site I get the impression that I am living a rare and bohemian life-style.

*For your reference:

- monthly salary = 30,000 (I think I could get 45,000 next year without too much effort on my part)

- rent = zero (free from school), but previously 5,000

- food = average meal 20-35 baht

- drink = water ;-)

- entertainment = eating with friends / cinema (80-140 per ticket)

- travel = bus (BTS when traffic is very bad)

- misc costs = cheap clothing, cheap internet cafes, mobile phone (no international calls), etc.

Question number 2: why do so many farangs open a bar (or similar venture) here? Are the profits that good or are they just gullible? I met one guy who had sold his home in the UK to buy a bar here. He had been here for just 3 months! Maybe the offer was just too good to be missed, but on the other hand 3 months seems too little time to become aquainted with a country and find a worthwhile business. SO WHY DO THEY DO IT?

Question number 3: But even after 12 months, 2 years, 5 years, etc. is selling a major capital asset (with a reliable rental income) to open a business here a financially sound idea? I'd say no, but then again I don't know the profits they are making...

Question number 4: assuming you own / part-own a business here in Thailand, just what sort of returns are you making on your money?

Question number 5: in retrospect, was it such a good idea? To me, running a legitimate business here in my own name seems like too much hassle, and having a business in a Thai friend's name too much of a risk.

A big thank you to anyone who can answer all of these questions!

[MaiChai]

Q1. I have live a life like yours for a long time in LOS. My Thai wife does not want to live this kind of lifestyle (they all want to be rich for some strange reason). My kids also cost, but my personal life style is very simple and pleasant. You will probably get addicted to the simplicity of it all, and probably won't get bored of it. You can also spice it up by going on small holidays (my current challenge is to camp in every National Park in Thailand), or doing something different from the norm. I don't mix much with many local farangs (did not have any foreign neighbours for a long time); most of people I mix with are Thais. Farangs always want advice, want a sholder to lean on, what to winge about something; the Thais are much easier company. I live about 30km outside Sukhothai, away from all the bright lights (but they are there if I want them). I always seem to have to go back to the UK to make more money, so I am now concentrating on setting myself up so I don't have to do this anymore. I intend to buy a house in the Uk and rent it out, and get some more money behind me. I have specialist skills that could earn me good money in Thailand, although it may take time to find the right people to work for, but I have taught English before, quite enjoy it, and could do this until I get fed up with it. I haven't spent all my life whoring, so it seems strange that I should start now. So I don't, as its not really my thing. I've been in Thailand a long time (about 8 years now), so am well established and everything is paid for.

Q2. It seems a British thing to own a bar abroad. It can be hard to make money out of, depends on whether you can get people into your bar, and how much you can charge them above cost. It seems too obvious a thing to do.

Q3. I would say no. Don't burn your bridges. Hang on to your regular income, and build your own business. Note that the Thais make it very hard for foreigners to establish a small business, so if you can work the black market, then do so. English privates can be a good earner if you are prepared to work hard. I would say build a business up conservativly; that is don't put every penny into it, build it up slowly, and learn as you go along. The big bang approach in a new country IMHO is a bad idea.

The other questions I can't really answer. All I do know is that there are a lot of opportunities for business in Thailand, and its less regulated than in the UK.

[Bob Chittie]

I can't answer all of them, but maybe I can provide some useful info.

30,000 Baht is quite a decent salary here. I know many many people living contently on about half that. I think there are many people living simply like you and a lot of them aren't really interested in debating and discussing things on this board. They are happy just living simply. I think many of these people (like my Father) are more happy just hanging out with the thais and really just 'being' in Thailand so they aren't involved at all in the expat community. Other people like being able to have real conversations and things in common with others thus the various groups of expats. I don't think one is better than the other. it just depends what you are looking for.

As far as the bars, i've got to guess that guys get out here and just the thought of owning a bar in Thailand sounds great and exciting and on top of that-the women! But I can't really comment on what kind of returns the average farang owned bar does.

I've got to say that if you've got an asset back home making you money, don't sell it! Unless you've got something here you ahve really researched and believe in.

And for me personally, I would never put a business in a friend's name. Too many things could go wrong. But that's just me.

Hope this gives you some insight.

[sevinnow]

My conclusion is you have already "reached" your conclusion and seem prepared to "mosey" along as things are.

Answer to the question about Farangs owning Bars:

If you do a survey about the bar owners previous employment in their own country you will find that most are from manual labor occupations, mainly connected to the Building industries, so hence they have little or no Business experience and most have never done a business plan in their life.

So without much experience of what they can go into legally in Thailand they choose the Bar scene.  Infact that is about the most easiest occupation to get into for a Frang and certainly the attractive.

Costs involved:

Although most go for a Bar that has already failed (becauseof lack of planning) they develop a false sence of "But I know waht he did wrong".

Buying a bar lease on a 3 year agreement costs are depended upon the area and what condition it is in ect.

A friend's recent example was as follow's with 4 rooms to let:

The lease (3 years)                    600,000 baht.

Rent                                         20,000 baht   (month)

Staff wages  1 cashier & 5 girls      20,000 baht  (month)

Electric/ water & cleaner               15,000 baht  (month)

Pool table & machines                     5,000 baht  (month)

Additional bits & pieces                   5,000 baht  (month)

Insurance                                    10,000 baht  (month)

Total Monthly                              75,000 baht   (month)

Income:                

Rooms 50% occupancy                  15,000 baht   (month)

Bar Fines for girls                          15,000 baht   (month)

Arrange Airport collections ect         10,000 baht   (month)

Total  Income                              40,000 baht    (month)

Beer & Spirts puchase income is based on him buying bottles at 25 baht and selling them at 65 baht profit of 40 baht with his shortfall of 30,000 baht he must sell 750 bottles a month equates to 25 aday to break even, he assumes spirt drinkers are few and far between.

His biggest profit earner is sodt drinks, cokes and orange juice which he buys at 5 baht and sells for 60 baht.

So conclusion, working 7 days a week he must have a minimum of 50% occupancy from his rooms and sell 25 beers aday just to pay the bills.

Wonder why most find it attractive?

Rgards

Sev

:cool:

[mrentoul]

If you work in the bar trade then you'll have to bribe police. You'll also have to deal with nasty drunken farang types.

I could think of nothing worse.

[MaiChai]

Couldn't agree with you more mrentoul. The point about uneducated builders trying to run a bar seems very pertinent; have come across quite a few of these types. Also seems to me that people pump a lot of money into these bars, and eventually run out of money. I'd rather have the money in bank, live frugally, and enjoy the real Thailand. And I'm sure you would become very bored of the bar scene and being nice to customers after a while. Not to mention all the crime related hassles. And I knew a farang who evetually came to a sticky end running a bar.

[brianbrain]

Q1. I have live a life like yours for a long time in LOS.

Mai chai,

Thanks for your reply. It's nice to know there are other people enjoying a life in Thailand outside of the expat community. Sure, I am very happy with this life and maybe I will continue to live this way. I've certainly no intention of opening a bar, it would be my idea of ####! I think you are right about bar-ownership here being a "British thing".

The comment on your wife was interesting. I can understand her viewpoint; the grass is always greener and money would bring security for her and her family too. It may be difficult for her to understand this, but "rich" doesn't necessarily equate to happy, and for me I've never been happier than since I came here.

I have "specialist skills" too. I was a computer manager in England for almost eight years but found it impossible to find a legitimate (i.e. with work permit) job here in Thailand that would pay a reasonable wage. I had one interview with a recruitment agency owned by an American expat. He said with my skills I should earn about 90K in Bangkok but the chance of finding me that job were about nil. I was grateful for his honesty. So, half-reluctantly I took a job teaching and found it to be one of the most enjoyable and rewarding jobs I ever did. It's nice to know that sometimes things work out that way :-)

Just out of interest, what are your specialist skills?

[mrentoul]

So, half-reluctantly I took a job teaching and found it to be one of the most enjoyable and rewarding jobs I ever did. It's nice to know that sometimes things work out that way :-)

I love happy endings: well done! I suspect some people would have a tough time accepting they have to take on a job that pays significantly less than they would earn in the West. It takes even more courage to branch out in an entirely new direction.

It's nice to know there are other people enjoying a life in Thailand outside of the expat community. Sure, I am very happy with this life and maybe I will continue to live this way. I've certainly no intention of opening a bar

I suspect there are more people living a non-expat lifestyle than you think. You can live the way Mai Chai does, or you do, even in Bangkok; though I don't think it's as much fun (in Bangkok, with its traffic, crowds and heat, it's easy to feel trapped).

I don't have a single westerner friend outside work, and don't go out with any of them socially. I am not sure it's such a good idea, as we all need somewhere we can let our hair down. But it is quite possible to lose yourself here, even in a big city.

[Sunbelt Asia]

Why do people want to own a bar?

They want job security, control over their future, in their mind it’s easy to manage.

Are they successful and make more than 30,000 Baht per month? Some do incredible numbers, we had one investor get happily involved with two bars that was audited by Price Waterhouse. Gross sales were averaging over 6 million per month and profits were 1.5 million Baht per month. I’ve seen the books on many bars in Thailand, beer bars are the hardest way to make a living but it’s cheap to own one. But a real bar or a Go Go Bar, most despite the common conception are doing well. Some are doing VERY well. One thing is for sure, it’s not easy but it can be profitable. 27 Go Go Bars in Nana.. how many are making money and how many are losing? Clue: Its much higher than 70% of them!

As for payoffs, the most popular bars only pay tea money of 5,000 baht per month!

[mrentoul]

One thing is for sure, it’s not easy but it can be profitable. 27 Go Go Bars in Nana.. how many are making money and how many are losing? Clue: Its much higher than 70% of them!

That's 70% losing money, or 70% making it?

I still think that if you get into the bar business you'll have to deal with underworld types..them, and police!

The two seem to go and in hand here, and a westerner would make a juicy target.

[MaiChai]

I know all about the juicy target thing. Put it this way, the police are always on the lookout for new opportunities to make money. So the best trick is to not stand out as a target.

brianbrian, I'm a Tru64 UNIX specialist, basically the best UNIX available, and used to run many number crunching, high performance computing applications. Still stands out as a great UNIX, to the point that HP, the new owners of Compaq (who took over DEC), are going to steal all the good bits out of it and put it in their bloody awful HP-UX (coining the old phrase HP-SUX meaning its crap). I normally work as a consultant doing 3/6 month contracts, but have been lieing low for a while due to the world IT recession. Anyway, I'm under cutting HP at the moment, and am doing a stint working out why peoples systems crash (analizing crash dumps), and telling them how to prevent them crashing again. Pretty techy stuff. Anyway, such a complex techy world makes you appreciate the simplicity of living in an upcountry Thai village...

[Sunbelt Asia]

"That's 70% losing money, or 70% making it? "

Making it of course!

"I still think that if you get into the bar business you'll have to deal with underworld types..them, and police!"

From what I understand, they come around once a month for their envelope. That’s it.

Would I own a Go Go Bar?...no. It's not my personality. However to say they all lose money is not correct. The majority do make money!

[muay_thai]

brianbrain all I would say is stick with your original idea, I'm an accountant back home in the UK so I know a lot of good investments. I'm also trying to setup houses to rent out so I can live LOS - so yes keep it!

Now, how many accountant firms in the UK (not talking large blue chip companies) but your average accountants are in rented accommodation in the high street and how many are in large converted houses ?

What I'm pointing at is property is a low risk low income money earner, and you will only need a low income in thailand.

The trick is to earn money in UK/1st world country and spend in thailand, so keep your safe investment and if anything export from thailand into UK,etc.

Are you paying your house off and earning on top, as remember the quicker you pay off the faster you will live on more income from your house?

Also always remember when you take advice always look at what the advisor has to gain, ie. Sunbelt Asia form companies and sell companies, why would they want to tell you a company is a bad thing in Asia. (Don't take offense at this Sunbelt I'm just using you as an example to point out to look at the advisors perspective).

It's like me saying have you seen a good accountant in the UK, to ensure you are paying the least tax possible (you have took advice havn't you)

[brianbrain]

A friend's recent example was as follow's with 4 rooms to let:

The lease (3 years)                    600,000 baht.

Rent                                         20,000 baht   (month)

Staff wages  1 cashier & 5 girls      20,000 baht  (month)

Electric/ water & cleaner               15,000 baht  (month)

Pool table & machines                     5,000 baht  (month)

Additional bits & pieces                   5,000 baht  (month)

Insurance                                    10,000 baht  (month)

Total Monthly                              75,000 baht   (month)

Income:                

Rooms 50% occupancy                  15,000 baht   (month)

Bar Fines for girls                          15,000 baht   (month)

Arrange Airport collections ect         10,000 baht   (month)

Total  Income                              40,000 baht    (month)

Sev,

Thanks for the reply, the figures were interesting reading. We can't generalise about every bar but there must be other bars with similar financial "prospects". All I can say is good luck to them, and rather them than me! I prefer my five-days-a-week job with zero (well nearly zero) hassles.

Brian

[brianbrain]

...Anyway, I'm under cutting HP at the moment...

Are your clients based in Thailand or back home? I found it next to impossible to find legit IT work here in Thailand. I think maybe it's even more difficult to find a company willing to employ a contractor working from overseas??? Maybe it's all a blessing in disguise because coming here and getting a new job has given me an entirely fresh (and refreshing) start.

[brianbrain]

Incidentally... hate the idea of working with drunks (farang or otherwise!) too.

[johnnyk]

What do you think about running a guest house? I've wanted to do something like that for a long time, first in France but that's now a very expensive country.

It seems to me if you could buy an existing business with a good lease in a popular place (Chiang Mai, Kanchanaburi etc) you could have a decent living (ie. THB60,000/month to live on).

Anybody know more about this?

[the gentleman]

However to say they all lose money is not correct. The majority do make money!</font>

In my experience it is the other way around 70% lose money. In Phuket Anyway.

I think the majority of the bar buyers come on holiday, which is mostly spent in the bars, drunk with the girls and think wow, I have found Utopia - they go home sell up, come back, buy the bar they drank at last time or "his friends" bar and two years later are back in thier home country a recovering Alcho with no money.

I have seen this happen too many times - dont buy one! I think the ones you are talking about Sunbelt are "special" cases.

[TizMe]

I drove through Pattaya two weeks ago on a Saturday night at about 11pm.

Peak Tourist season, all the beer bars seemed to have about 7 or 8 girls per customer. I cant see how they are making any money.

[Guest IT Manager]

Well, well, well, so much for nay sayers promulgating the opinion it's not right to live on what you need, as opposed to how much you earn, have saved, get from overseas etc.

Let the battle begin? Personally I hope this proves the point I have made frequently that you don't need to be a corporate high flyer, nor is even preferable for some people, to live comfortably here, with under 100K baht per month.

Have a great festive season everyone.

IT & Family

[Pink Mist]

Happy xmas all

you are dead right gentleman

unless you know what is going on dont buy a bar

[Sunbelt Asia]

"Peak Tourist season, all the beer bars seemed to have about 7 or 8 girls per customer. I cant see how they are making any money."

I was not talking beer bars when I was talking bars. It was in reference to Go Go Bars and normal bars when I said 70% in my opinion make money.

Beer bars, I know several that make 60k to 200k net per month. They both have the perfect location. Beer bars are a tough market but you can make money if you have a good location and are a good manager. With beer bars, I would say 80% of them lose money. Lots of easier ways to make money than a beer bar. Go Go bars or Irish Pubs...whole different ball game.

[en184]

Why bother opening a bar.. There are so many differnt types of businesses to chose from.

Personally, I think a large hair dressing salon in a good location would make good money. Perhaps a couple of internet cafes too.

Otherwise, you can consider investig on the SET and collecting the dividends.

Bars can be profitable, if they are well managed, in a good location. I once metan Irish bar owner in bangkok that was making serious money and a gogo bar owner in pattaya.

Beer bar, i think forget it..

As for selling your house in UK, don't do it...

[NedKelly]

Yes if you have a house in the UK keep it. You should wait years before making a decision to sell. Then you should have a solid plan in place and also an altertnate source of income. As you get older you may want more comfort in life and your family will demand security also.

All the talk about bars is interesting. Back home I know that most small business fails in the first year, so be wary of that idea. Established businesses with legitimate records is the way to go...if this is possible in Thailand's bar scene.

The idea of police taking their tea money is pretty much the norm and then you have the underworld. Who knows what they might want. In the Khao San Road area, many of the bars are owned and controlled by the Thai mafia and they are not beer bars, they are expensive joints fully purpose built. God help you if one opens next door to you.

On a more positive note. If you open a bar or other business, why sell only one thing ? You have an opportunity to provide a variety of items to build revenue whatever your business. Expand your market, think laterally and integrate vertially !!

Ned

[p1p]

Don't sell your house and burn your bridges. There are worrying signs on the horizon here and keeping an emergency exit available is almost always advisable.

I have watched many, many people lose the shirts off their backs by getting involved in bars, restaurants, pubs & other entertainment businesses here. The ones who succeed tend to be the big corporations and/or individuals with massive experience in the business.

Easy advice is do not invest unless you can afford to throw it all away.

[Abyss]

I was not talking beer bars when I was talking bars. It was in reference to Go Go Bars and normal bars when I said 70% in my opinion make money.

Maybe this is correct but Nana is bangkok, which is busy most of the year if not all year. If you own a bar in Pattaya or Phuket which is only busy 3-4 months of the year. What is the success rate?

[Sunbelt Asia]

The three bars that I saw ( all whose accounts were done by Price Waterhouse) two in Phuket and one in Pattaya. Not much difference with these same types of bars in Bangkok. They catered to expats.. slow month was April and July say 2.8 million Baht in those months. On average they did 3.5 million and Feb would be the best at 4 million. Pattaya did well in May with the annual war games and the Americans here.... they would be around 4 million that month but the others did 3 million that month .

The rents are MUCH higher in Phuket but so are what you can charge for their product. By the way, as a different point, McDonalds rent on the beach is 650,000 per month for 200 Sq.M but they are packed even with their prices 50% higher than Bangkok. I’m sure they are making a profit.

We just signed a lease in the Royal Garden Plaza facing the Beach on the ground floor in Pattaya at 2,400 Baht per Sq.m. plus 200 Baht Service charge for 80 SQ.M. Rent increase of 10% after the first year, then 5% the second year, 15% increase for every three year term after that, translates to around $75/sq. ft/ year for the first year

This sounds like madness but rent in reality is cheap compared to other cities.

http://www.cushmanwakefield.com/flyers/exp_shopping.pdf

To answer your question, more bars make money in Bangkok but the ones that do well in Phuket or Pattaya, do very well.