Will Buying Into Barscene

[billyboy]

This year i will recieve about 4 million baht from a compensation claim.

I will be 35yo later this year and i plan to move to Pattaya and buy several businesses.

The questions are,

When should i register a company,do it now,or wait until my money comes thru to me in about March/april ?

I plan to buy a beer bar and a cafe.i will have a Thai partner come in with me so i need to protect myself against legalities.

Do u think i could get a work permit?

What would the total cost be for sunbelt or lawyers to ge me company registration plus work permit?

Do i have to put 1 million innto the company bank account?

Does sunbelt offer a service where i could tell them the name of the businness thats for sale and they will check the books and tell me the profit and potential?

If so how much roughly for this?

Can u act on my behalf if i want to buy these businesses which are being sold privately thru their owners.

thanks

[snoophound]

suggest 4m would buy you one business ,that would give you a reasonable income

doubt u wld get several.

also suggest you keep 1m in reserve.

Seen heaps of guys go in boots and all and end up broke

This year i will recieve about 4 million baht from a compensation claim.

I will be 35yo later this year and i plan to move to Pattaya and buy several businesses.

The questions are,

                              When should i register a company,do it now,or wait until my money comes thru to me in about March/april ?

        I plan to buy a beer bar and a cafe.i will have a Thai partner come in with me so i need to protect myself against legalities.

Do u think i could get a work permit?

      What would the total cost be for sunbelt or lawyers to ge me company registration plus work permit?

Do i have to put 1 million innto the company bank account?

    Does sunbelt offer a service where i could tell them the name of the businness thats for sale and they will check the books and tell me the profit and potential?

If so how much roughly for this?

Can u act on my behalf if i want to buy these businesses which are being sold privately thru their owners.

thanks

<{POST_SNAPBACK}>

[TizMe]

What is your business plan? Tell us how you will be among the very small percentage of beer bar owners that make a living from owning a beer bar and not one of the majority who simply go broke.

What is your background? Have you run a business before?

[billyboy]

If a business cost say 500 000 baht ,how much should i expect in profit per year?

[Ajarn]

Not sure why I get the strong sense your money will be gone in a year, or less.

Best of luck, regardless.

[chico]

I've read four answers to your post and I must say, they are MODERATE!

Do you relly want to add to the list of people who have been buying into bars (or other) businesses in LOS and gone broke in no time?

Why don't you find a way to make some real profit out of your money back home and then spend the interests in LOS?

[Crazy Dave]

If a business cost say 500 000 baht ,how much should i expect in profit per year?

<{POST_SNAPBACK}>

not including salary for u about 100,000baht per year, 8,000baht per month u shall live like a lord amongst the rubbish collectors and other low salaried thai ppl, then again u may make a success of it and get profits up to like 300,000baht per year, then you can actually afford to go out and eat sometimes

i like eating, its good for you...

[NarrLing]

Billyboy, I have the same feeling Ajarn mentioned.

I seriously suggest you sit down with a good accountant/financial advisor and deal with them rather than ask on a forum. Sure you will get some good ideas, but you definitely need solid advice. The money you are talking about is a lot and once gone will be hard to replace.

I can’t comment on your business ideas apart from saying that I have seen more people lose their money than gain in the bar scene. I’m sure there are people here who will disagree.

There are plenty of other good business opportunities available in Thailand that will give you very good returns on the amount you mention.

Talk to the professionals, look around and then decide on a good investment. Don’t go in blind; take your time before committing.

All the best with whatever you decide.

NL

[billyboy]

I have the money,its just buying a established business that will be a problem unless i use a accountant or someone to check the books.

There is a couple of cafes that i know are busy in Pattaya.

There must be some good businesses in Pattaya that make at least 1 million baht profit per year and cost less than 1.5 million baht.?

Should i pay over the amount for under the amount profit?

If a business is earning 1 mill baht per year,how much is it worth?

I dont want to go broke,and i dont want to earn 300 k per year i want at lest 1 mill per yaer profit.

I cant afford to lose the money. The thing is if how do i tell if a business is a good business?

If say a business broker is selling onne they will tell me its great just to sell me it.

I am scared to lose but in a way i want to take a risk.I can work hard,i enjoy working long hours,its just finding the business,the one that makes at least 1 mill profit per year and someone whose honest reliable etc to do the leagal work like checking books etc for me.

I have 4 mil baht,i will keep 1 to 2 mill for emergencies so i suppose with expenses i have about 2 to spend.Can i pick up a 7/11 or mini mart for that?

Never see them advertised.Where should i start.

Edited January 16, 2005 by billyboy

[NarrLing]

As I mentioned, take your time, look around and then decide. I know of 2 businesses making good money, but not in Pataya. I know they started 2 years ago with an investment of 300k Baht and are now bringing in just under 1.2 Mil per year.

Take you time, find a good consultant and then decide.

Oops, I forgot to add, they are not for sale.

NL

Edited January 16, 2005 by NarrLing

[chico]

as narrling nicely said, don't get fixed on anything. good businesses (over 1 million/year) are very rare in Pattaya and certainly not for sale.

What you can buy into are losers stories and not worth 10% of their price. the only beerbars who still make (some, enough for thais to live on it) money, have been around for ten or more years.

Try to find something new, then you get about 6 month before 30 (or more) people are copying you and the income is going down to near zero.

[TizMe]

There must be some good businesses in Pattaya that make at least 1 million baht profit per year and cost less than 1.5 million baht.?

Rule of thumb says that business earning 1 mil per annum will cost 2.5 mil

[Sunbelt Asia]

QUOTE]When should i register a company,do it now,or wait until my money comes thru to me in about March/april ?

After you find the business you want to start or invest in. Make sure this is something you want to do first. The cost of forming a company is alot less than closing it down. Only one person in 40 thinking of investing, does it. It takes a leap of faith to be an entrepreneur and most people simply can't pull the trigger either starting up or buying.

I plan to buy a beer bar and a cafe.i will have a Thai partner come in with me so i need to protect myself against legalities.

Beer bars in Pattaya have been making good money in the past couple months. As long as you didn't swear at your customers and make an ass out of yourself, it would of been hard to lose money. But want separates the men from the boys is low season. How do you different yourself from the masses that operate a beer bar? If you are looking for something so you can have pride of ownership and a hobby then a beer bar may be for you in Pattaya.

On the other hand, if you are serious about making money, then in my humble opinion, would think twice about a beer bar in Pattaya.

Saying that, I know a beer bar in Bangkok that is making NET 1.2 million Baht per month and its coming up for sale. It will be acquired for over 30 million Baht! If you don't see 50 people sitting at the bar then you'll know its quiet, just wait a hour and the odds are you'll see over 50 customers. Now this is a beer bar that makes sense but it is location and has a niche.

As for a Thai partner, don't be a fool and form a limited partnership. Do a Thai limited company and have different classes of shares. No matter what happens if the Thai partner turns out to be the devil himself, you will be protected.

Do u think i could get a work permit?

Yes

What would the total cost be for sunbelt or lawyers to ge me company registration plus work permit?

6,500 for the work permit

http://www.lawyer.th.com/work-permit.asp

Company formation. See

http://www.lawyer.th.com/company-registration.asp

Add 2,000 Baht for travel expense to Pattaya per trip.

Do i have to put 1 million innto the company bank account?

If you are applying for a extension of stay permit based on business

Does sunbelt offer a service where i could tell them the name of the businness thats for sale and they will check the books and tell me the profit and potential?

Because of conflict of interest, Sunbelt does not do any diligence on our own listings. If you find a business that we don't have a listing for. We'll do due diligence at 5,000 Baht per one million Baht acquisition price. Our minimum professional fee is 20,000 Baht. As most beer bars in the cash business, we'll be reviewing receipts and doing our diligence from this and give you what warning flags we are concerned about if any.

If they file a income tax return, which I would be shocked at and you would like an internal audit, these range from 75,000 Baht to 200-300,000 Baht. Just depends what firm you use.

Can u act on my behalf if i want to buy these businesses which are being sold privately thru their owners.

Yes see above. We do this on average twice a week for clients.

www.sunbeltasia.com

[Sunbelt Asia]

If a business cost say 500 000 baht ,how much should i expect in profit per year?

Sounds like a typical beer bar.... I would say break even or make 40,000 Baht for the year.

Most businesses on a cash flow model sell for 2.5 times earnings which on 500,000 Baht would be 200,000 Baht a year or 16,000 per month.

Beer bars however have key money that has been paid and the assets are probably close to 500K.

Sorry to be so negative on beer bars in Pattaya, but its a tough business to make good money.

www.sunbeltasia.com

[chingy_]

don't you need 7 people to register a company (co.ltd)

[Sunbelt Asia]

I have the money,its just buying a established business that will be a problem unless i use a accountant or someone to check the books.

The first stage is to pretend to be a employee that works for a Western tax office. They use their calculations to compare against the books. Lots of rule of our trade. I just was interviewed by "Thailand Opportunities"" magazine for the upcoming March issue. They are going to be publishing some of the rules of trade that I shared with them. Most is just common sense. Thinking of buying a pizza shop? Calculate how much pizza sauce and flour is use to make one pizza. Compare this to the receipts from the suppliers how much ingredients were used in the year. This will tell you if the guy is in the ball park with his books.

There is a couple of cafes that i know are busy in Pattaya.

There must be some good businesses in Pattaya that make at least 1 million baht profit per year and cost less than 1.5 million baht.?

Make 1 million net... yes but odds are really against that it will be selling for less than 1.5 million. Figure more like 2.5 million which is a 40% ROI. You are searching for 75% ROI! The Seller would have to be very motivated to sell at that price such as a partnership dispute or divorce. Freedom means more than money. Just not going to happen in most cases that someone will be that desperate.

Should i pay over the amount for under the amount profit?

Not sure what the question is?

If a business is earning 1 mill baht per year,how much is it worth?

On average... 2.5 million.

I dont want to go broke,and i dont want to earn 300 k per year i want at lest 1 mill per yaer profit.

I cant afford to lose the money. The thing is if how do i tell if a business is a good business?

Use common sense and use your own two eyes. Take 3 months and learn. Look at many listings, talk to those business owners on the businesses that you can see yourself owning. Then after time you'll get it. This is not a point and click, this is a journey with many and I mean many steps.

Be honest with yourself that when its all said and done. Only a 2% chance you'll pull the trigger and be an entrepreneur. If you do decide to do so, you put the odds of success on your side by doing your homework. You can't take the time to learn, don't invest.

If say a business broker is selling onne they will tell me its great just to sell me it

LOL. Don't think you have worked with our firm then. If you ask our opinion about a industry such as a beer bar we'll give you our honest opinion. We'll also tell you if we were looking at that industry, what we would look for.

However we give zero opinion about the individual business once you've been given the name and address. We are there if you want to go to the next step along the journey, but if its a good or bad business, that is your call with your professional advisors you hire. Because of the conflict of interest, we don't do due diligence on Sunbelt individual businesses. If the numbers are reasonable then we take the listing but the numbers come from the Seller. Its your job to feel comfortable the numbers are real.

I am scared to lose but in a way i want to take a risk.I can work hard,i enjoy working long hours,its just finding the business,the one that makes at least 1 mill profit per year and someone whose honest reliable etc to do the leagal work like checking books etc for me.

I would reco then to buy a business with audited records that paid taxes. If they had paid taxes last year of 200,000 Baht then the odds are very high they are making a million net. A internal audit should confirm.

I have 4 mil baht,i will keep 1 to 2 mill for emergencies so i suppose with expenses i have about 2 to spend.

If this business is making a mil net then you much less risk than starting up. On an existing business, you know your expense beforehand and you are ringing the cash register the first night. Have a good insurance policy for floods, etc but really no need to have much more than 4 months operating capital on the takeover of an existing business. A start-up, have two years operating capital and more! 70% chance you'll fail on a start-up because of lack of capital versus 80% chance of winning when acquiring an existing business you have researched. The biggest reason, you don't have any surprises like a start up. Start ups have a surprise every hour!

]Can i pick up a 7/11 or mini mart for that?

Never see them advertised.Where should i start.

Sorry. On a 3.5 million baht investment with a 7-11, on average, you'll make net 600,000 a year.

www.sunbeltasia.com

[Sunbelt Asia]

don't you need 7 people to register a company (co.ltd)

Yes but the other 5 promoters only need to own 1 share out of the 400,000 shares of a limited company that has registered capital of 2 million Baht.

www.sunbeltasia.com

[Steve2UK]

Maybe I'm just feeling cynical today........... but - you guys might like to look at billyboy's other posts on this forum. And then maybe, like me, you'll start to wonder if he's capable of running any kind of business?

Certainly gets me wondering how little or how much it takes to make something of yourself in LOS..............

Edited January 16, 2005 by Steve2UK

[Digger]

QUOTE]

Do u think i could get a work permit?

Yes

<{POST_SNAPBACK}>

What does a beer bar owner need to successfully obtain a work permit. I have never met a beer bar owner that has a work permit - I have met bar owners with 50,000,000 baht + business investments who have work permits but never a beer bar. Presumably he would need to be registered for VAT, have a statement from the property owner confirming the lease (and how likely is that on a beer bar?), photograph of the offices (???), etc etc and then go up to Chonburi and expect the governor to actually sign off a work permit that borders on pimping. Somehow I cant see it but would be delighted to learn that Sunbelt has got work permits for beer bar owners in Pattaya.

[chingy_]

don't you need 7 people to register a company (co.ltd)

Yes but the other 5 promoters only need to own 1 share out of the 400,000 shares of a limited company that has registered capital of 2 million Baht.

www.sunbeltasia.com

<{POST_SNAPBACK}>

correct, now he still need to find 6 other people willing register with him, and finding that 6 is gonna be hard, willing to join you to register for nothing in return.

[davethailand]

I don't know any beer bar owners that have work permits.

Clubs and enclosed bars, disco's are a different matter though.

I've had one for 3 years now.

[Sunbelt Asia]

What does a beer bar owner need to successfully obtain a work permit. I have never met a beer bar owner that has a work permit - I have met bar owners with 50,000,000 baht + business investments who have work permits but never a beer bar.

2 million Baht registered company and be the MD. We would guarantee you would get approved or no charge. Hasn't happen yet, that someone was disapproved!

Presumably he would need to be registered for VAT,

yes

have a statement from the property owner confirming the lease (and how likely is that on a beer bar?),

Not required for the work permit but for the Vat. For Vat, if you had problems with the landlord, you use a register office for the hqrs and have the area for the work permit in the whole city not just a location.

photograph of the offices (???),

yes

then go up to Chonburi and expect the governor to actually sign off a work permit that borders on pimping.

The WP has not been a problem. The extension of stay based on business can be. Immigration is tougher than the labor dept in regards to these issues as the business has to be "moral" in the Immigration eyes. Ways around this and you still can be legal.

correct, now he still need to find 6 other people willing register with him, and finding that 6 is gonna be hard, willing to join you to register for nothing in return.

Well he can use 5 family members or friends. On the 6th shareholder, if its a restricted business and he is not an American or under BOI. It has to be one Thai holding 51% of the shares. As nominees are illegal, a loan agreement is another method to make it legal.

Most law firms provide shareholders from 1,000 Baht one time charge to 1,000 Baht per year all the way up to 50,000 Baht.

www.lawyer.th.com

[Digger]

I don't know any beer bar owners that have work permits.

Clubs and enclosed bars, disco's are a different matter though.

I've had one for 3 years now.

<{POST_SNAPBACK}>

Presume that does not extend to gogo bars Dave? Never met one owner with a permit or indeed any bar considered as having girls available to be bought out of the bar, however might be mistaken. I have seen Hotels that have girly bars on the side, however they are owned by different businesses and therefore the work permit is issued for the hotel business as against the bar.

[davethailand]

I don't know any beer bar owners that have work permits.

Clubs and enclosed bars, disco's are a different matter though.

I've had one for 3 years now.

<{POST_SNAPBACK}>

Presume that does not extend to gogo bars Dave? Never met one owner with a permit or indeed any bar considered as having girls available to be bought out of the bar, however might be mistaken. I have seen Hotels that have girly bars on the side, however they are owned by different businesses and therefore the work permit is issued for the hotel business as against the bar.

<{POST_SNAPBACK}>

I know one gogo bar owner with a work permit, i thinks its for the company that the gogo is operated under and not under the actual gogo bar name, that still confuses me though as my permit is for MD and is under the name and address for my bar, and yes we have to send pictures of the bar, entrance, outside sign etc etc so saying that, that would mean that the pictures would of been of a gogo bar?????

[Sunbelt Asia]

We have had several hostess clubs, Go Go bars, bars and yes even beer bars where either the MD or the mgr was able to get a WP. Never had seen one that was denied.

On the other hand, most of these places do not bother and in fact are not even registered as a business. I know one GO Go Bar that had 3 WPs in Bangkok. Moved to Pattaya and didn't even register the business. He is still in business too.

www.lawyer.th.com

[jingjingna]

Sunbelt, if 7-11 are really bringing in those sort of returns on say a 3.5 Baht investment, WHY are they all over the place UNLIKE say Subway??

[~G~]

Sunbelt, if 7-11 are really bringing in those sort of returns on say a 3.5 Baht investment, WHY are they all over the place UNLIKE say Subway?? 

<{POST_SNAPBACK}>

600,000/3,500,000 = 17% NET. Not bad at all. I guess that in case of 7-11's its a pretty stable income as well.

[Sunbelt Asia]

if 7-11 are really bringing in those sort of returns on say a 3.5 Baht investment, WHY are they all over the place UNLIKE say Subway??

Because 50K per month is a good salary for most Thais. 7-11 is good for the mass market. They are everywhere and sometimes two doors away from each other. They always seem to be busy. More 7-11s in fact in Thailand than the USA.

Subway on the otherhand target market is a niche for foreigners. You could not put a Subway in a Thai neignborhood and make a profit at this time.

www.sunbeltasia.com

[jingjingna]

Are you suggesting that outside Bangkok the average is the same or less? In Sriracha for example which is just a small town located between Chonburi and Pattaya, there are atleast 8 branches of 7/11...how does the 'average' Thai get that sort of capital together?

[jingjingna]

Sunbelt,

I have another question for you but I won't hijack this thread..I'll type a new post. Your advice will be appreciated!