Low Risk/start-up Cost Businesses In Isaan

[Farma]

I think a lot depends on location as well.

In the 2 examples I’ve given from a neighboring city to yours the first business catches the lunchtime/afternoon trade from a local school. The second is positioned near a 7-11 and the food market.

As for laundry businesses there are plenty around. Even though they’re busy they appear labor intensive and don’t appear as profitable.

[fishhooks]

Really good topic here, I must put the thinking cap on as well.

Would be I'm sure for a lot of us, particularly in the retirement category, a great little past-time to keep the wheels turning and give the other halves and family something meaningful to do.

I think with Baht coming from the Farang (hate that word) side, it's easy for our hosts to..................... well, as others have hinted already in this thread.

[spacemand]

I know I will get ripped into pieces for this but not all women are gold diggers. Some really do want to help. Despite being given housekeeping money, which is more than enough to pay bills and have some spending money, many women are not satisfied with that and want to help bring in funds to the family through work or their own small business. There is also the issue of feeling useful and doing something worthwhile.

Obviously there are others who will take your money and as soon as you are away turn to a Thai boyfriend or falang one for that matter. However, I doubt that you know the OP or his missus so it is a tad unfair to pass judgement. Perhaps, your comments are based on personal experience. I really don't know.

I agree with you on both points.

I spend half the year in Thailand and half away, I send money to my wife simply because I do not want her to slave away in a very low paying job, I earn more in a day than she would working in 7-11, in a factory or a similar job. She wanted to get a job to help out, instead she is back in school so long term we can start a business to make us independent of my day job.

We are both young so this seemed to us as an better idea than her working for peanuts and I wouldn't feel good with her working for 5K a month when we don't need it and her going to school also get her out of the house

[sparkey]

^thanks sparky. Yes, it seems kind of odd to be doing those 12 hour, 6000 baht/month jobs if a lady is already getting support. I'm surprised your busy shop, (sounds more like a small restaurant?) only made 10k some months... I know people steadily getting 20k just doing what Farma described below (though that's in bkk):

Another started with a small cart parked on a footpath. They've since progressed to a new pickup with purpose built kitchen complete with retractable shades.

All this from selling flavoured drinks made from powdered flavouring, beans, milk and ice.

True but the shop was in a walled estate maybe 150 houses so the customer base wasn't big. Also the mark up is only 1 bt 2bt on a lot of things. don't get me wrong some days we took 10k + but net profit was very small. We didn't go the restraunt way it was just a thai style general grocery corner shop.

Sparks

[sparkey]

I know I will get ripped into pieces for this but not all women are gold diggers. Some really do want to help. Despite being given housekeeping money, which is more than enough to pay bills and have some spending money, many women are not satisfied with that and want to help bring in funds to the family through work or their own small business. There is also the issue of feeling useful and doing something worthwhile.

Obviously there are others who will take your money and as soon as you are away turn to a Thai boyfriend or falang one for that matter. However, I doubt that you know the OP or his missus so it is a tad unfair to pass judgement. Perhaps, your comments are based on personal experience. I really don't know.

I agree with you on both points.

I spend half the year in Thailand and half away, I send money to my wife simply because I do not want her to slave away in a very low paying job, I earn more in a day than she would working in 7-11, in a factory or a similar job. She wanted to get a job to help out, instead she is back in school so long term we can start a business to make us independent of my day job.

We are both young so this seemed to us as an better idea than her working for peanuts and I wouldn't feel good with her working for 5K a month when we don't need it and her going to school also get her out of the house

Totally agree how can you let her work all month for the equivelant of maybe one days work for you. It wasn't that long ago in the UK that if you wife had to work you were doing something wrong as the man in the house.

[Cuban]

All this from selling flavoured drinks made from powdered flavouring, beans, milk and ice.

There is good profit in drinks - but move with the times and the weather, don't loose custom by focus on only hot or cold drinks. Add simple bought in snacks to start with then do your own as business builds. It works.

[C-sip-degree]

Hi Svenn,

Hate to see this opportunity fade away. So what about, baby accessories shop come book shop as an idea.

Or you could go with my personnel favorite of a screen printing T-shirt factory.

All sizes and colors available of cause Saying, “Vote for Chopperbopper, Sinbin did” or “Vote for <deleted>” or mix the two name together which has a nice ring tone to it, hel_l I might even buy a shirt if made available.

The sky could be the limit when I start thinking about it now, screen printing could be the ticket, brainstorming again what about “hook line and stinker” or just plain “desprate” as our friend said, last but not least “normal western man wanted who have a job and can read and write them selfs ???” you probably could do this in bright colors with a three dimensional style for the ladies , but then there is just the simple screening kind being the letter 1 on the front of the T-shirt and the word Joke on the back, now where is that address to post it to I wonder.

Regards

C-sip

[kimamey]

I know I will get ripped into pieces for this but not all women are gold diggers. Some really do want to help. Despite being given housekeeping money, which is more than enough to pay bills and have some spending money, many women are not satisfied with that and want to help bring in funds to the family through work or their own small business. There is also the issue of feeling useful and doing something worthwhile.

Obviously there are others who will take your money and as soon as you are away turn to a Thai boyfriend or falang one for that matter. However, I doubt that you know the OP or his missus so it is a tad unfair to pass judgement. Perhaps, your comments are based on personal experience. I really don't know.

Well said.

[Thaddeus]

In Thailand it's a bit more traditional; the man is expected to be the breadwinner.

I think I just coughed up my spleen.

[thaimite]

My wife has a business here (trucking) and one problem is that the locals do not understand the true costs of running a business. They think as long as there is money in their pocket at the end of the day then you are doing well. They forget about all the other costs (tax insurance, repairs etc). This not only means they never do well, but that you are competing against people who do not understand the cost of doing business. be very wary.

Staff are another problem. They usually make more money than you do!! (Honesty is a luxury many cannot afford)

I can confirm the low profits of an Internet business as I was friends with a local who had an Internet cafe for a year (opposite a large technical college). He only made enough money to feed himself and his family. Never allowed for the cost of PC's electric, phone etc.

Think of any business as a hobby for your wife with any income as a bonus and you will not be disappointed.

[torrenova]

The first thing you do is to ignore anything your GF says which she thinks will make money.

I'll give you an example. She goes to Bangkok and buys clothes which she sells for a mark up of 50%. The money she starts with did not come from her so it is never thought about. The money which comes from selling the clothes is spent, usually at the end of the day. When the stock is all sold, the business collapses or you fund it once again. To many Thais, sales income is not even profit, but just spendy money.

Now take this idea to an analytical level.

Cost to go to Bangkok and buy goods - 2000

Average price of product - 100

Average retail price - 200

Average discount - 10%

Cash available for stock - 5000

Market cost per day - 100

Fuel cost per day - 100

Assistant cost per day - 100

Food cost per day - 100

Sales per day - 5 units

What happens is that they think the price is 100 a unit (if they even get this far !) but it is not. The true cost is:

5000/100=50 units

2000/50=40 baht source costs

50/5=10 market days at 100=1000/50 units= 20 baht sales outlet costs

50/5=10 market days at 100=1000/50 units= 20 baht sales assistant costs

50/5=10 market days at 100=1000/50 units= 20 baht food at market costs

50/5=10 market days at 100=1000/50 units= 20 baht fuel costs

So, you have initial costs of 100, plus 40 for sourcing the product in Bangkok, 20 for sales outlet costs, 20 for an assistant, 20 for food and another 20 for fuel. Thus, your total costs are 220 baht and your maximum income, after 10% discount is 180 baht per unit, even if you can sell all of them. Thus, your "business" actually loses Bt40 on each and every item is sells.

Of course, some of these costs are fixed but lets look at it again with greater volumes.

20,000/100=200 units

2000/200=10 source costs

200/20=10 market days at 100=1000/200= 5 baht sales outlet costs

200/20=10 market days at 100=1000/200= 5 baht sales assistant costs

200/20=10 market days at 100=1000/200= 5 baht food at market costs

200/20=10 market days at 100=1000/200= 5 baht fuel costs

Total costs are 100+10+5+5+5+5=130 baht and with 180 baht income per piece, there is a Bt50 per piece income which on these volumes of 20 units per day, would be a profit of Bt1000 per day.

Thus, the market research which needs to be undertaken is to see whether there is a market for 20 units per market day and whether there are sufficient market days in the month to provide the required income.

Using economies of scale is almost unheard of to small businesses whether Thai or western because they are not business people. You can beat them if you can utilise such economies but the wheels can easily come off the truck if the sales income is not retained. If it is still spent, then you are still pissing in the wind.

[Svenn]

My wife has a business here (trucking) and one problem is that the locals do not understand the true costs of running a business. They think as long as there is money in their pocket at the end of the day then you are doing well. They forget about all the other costs (tax insurance, repairs etc). This not only means they never do well, but that you are competing against people who do not understand the cost of doing business. be very wary.

I can see that happening a lot, but would you say it's widespread enough that the average costs of some common products are artificially low because their vendors don't know that they're losing money? e.g. are the only successful som-tam vendors the ones who are unknowingly losing money because of their cheap, yet popular, price?

Using economies of scale is almost unheard of to small businesses whether Thai or western because they are not business people. You can beat them if you can utilise such economies but the wheels can easily come off the truck if the sales income is not retained. If it is still spent, then you are still pissing in the wind.

Thanks for laying out those numbers, but I don't see anything novel in the 'economies of scale' analysis beyond the self-evident truth that you need to know the costs involved in selling a product. Do you guys really think there's a significant amount of Isaan folk lightheartedly reselling products from BKK without concern for the gas involved driving there, time spent, etc? Maybe they don't lay it out as specifically as torrenova did, but everyone knows whether they have money at the end of the month or not- nobody keeps running a business if it's not profiting do they?

I agree that if we're talking about food stands, I better figure out how many sandwhiches she needs to sell a day on average to know whether the business is succeeding or not. There probably are indeed many stalls that just get started up and are quit when the vendor gets tired, no analysis ever being done.

[chopperbopper]

Listen if you are asking for business iades here. If i was you i would give up with a business idea. There are many ways of making money in thailand if you know a few basic things about importing or exporting. I have been living here for 8 years now and have never done a business with my gf. All business i do is on my own or with other local expats. Local Thai business can make enough money for thais to live on ok... but forget trying to live like that if your a farang. 80 % maybe more of all business in thailand fail and lose money.

eg a guy has a bar and the rent is cheap say about 8000 a month... ask the guy how its going and he will say great we take over a 1000 baht a day.... but then he forgets about the billls , staff costs , 1000 baht a day isnt a 1000 baht profit thats takings..... then then theres the key money . So really he will be making no money at all or more than likly losing money...

But that seems ok for many farang men who live here.... as long as they have there wife and trying to show her how rich he is ( or is not ) She will stay until the money runs out ! but after that ???? ask yourself

[Chaimai]

Do you guys really think there's a significant amount of Isaan folk lightheartedly reselling products from BKK without concern for the gas involved driving there, time spent, etc?

Svenn - YES !

IMHO I think that happens a lot.

Different example:- I go into local Internet cafe for 35 mins and take one bottle of Coke from the fridge.

"Check bin" I say.

"10 Baht" came the reply. "But I had a Coke", I said. "Yes, I know" said the proprietor.

I buy Coke for 6 Baht a bottle from the Coke truck and sell for 15 Baht (to achieve a 60% GPM) - how the h3ll can she make any real profit ?

[Chaimai]

In Thailand it's a bit more traditional; the man is expected to be the breadwinner.

I think I just coughed up my spleen.

Welcome back - Guaranteed to bring a sense of perspective to any topic

[prakhonchai nick]

Do you guys really think there's a significant amount of Isaan folk lightheartedly reselling products from BKK without concern for the gas involved driving there, time spent, etc?

Svenn - YES !

IMHO I think that happens a lot.

I would agree with Chaimai 100% It is very common especially in tourist areas, where everyone thinks they can milk the tourist!

My ex wife did exactly as torrenova set out. To restock she borrowed from loan sharks, and to repay them borrowed from yet more loan sharks. She did what she wanted -and never took advice from anyone not even me. Eventually she did a runner, and that is largely why she is my "ex"

Edited November 24, 2009 by prakhonchai nick

[Chaimai]

My ex wife did exactly as torrenova set out. To restock she borrowed from loan sharks, and to repay them borrowed from yet more loan sharks. She did what she wanted -and never took advice from anyone not even me. Eventually she did a runner, and that is largely why she is my "ex"

Not because of your philandering then.

[prakhonchai nick]

Thankyou for your kind words Chaimai

Perhaps they will one day come home to roost with you!

[sabang]

My wife recently opened a small 'shopette' out of our Home, in the most offhand way- for a hobby, something for her and the Mil to do. Total capital in has been a smidgin under 6000 bht- 5000 for a second hand chest freezer (decent buy) and 900 bht for two metal display racks. What little else was required we already had, basically unused. So far, it has surprised me- our local market is tiny (we are in a rural area, between small villages), but we are about equidistant from the nearest shop in three directions- 3km of dirt track. So the locals are happy for the convenience, and happy to shop there for the basics. There is a table to drink at if they want, and we've recently started a small food menu- which has done OK too, and we grow most of the required veges.

Now, to put this in perspective, the profit will impress no one- about 5,000 bht a month based on one months trading- but as I mentioned, our market is tiny- maybe twenty households. It is more than I expected frankly. So If you have a decent location- i.e no other shops within spitting distance- it might be a reliable, albeit modest earner. Your potential market size is certainly a lot bigger, but so is your competition. Our most profitable line by far is Lao Khao - outside a School, yours might be different. Just a thought, anyway.

Edited November 29, 2009 by sabang

[Gary A]

Business in Issan is tough. We had three Thai guys build a place that had a small golf driving range, a restaurant and beer and music. Actually quire a large place seating maybe 80 people. They had a good cook and a big bottle of beer was 55 baht. All the local farangs adopted the place and it looked like they may make it.

I counted the staff and found they had about 20 staff. They certainly didn't need three parking lot attendants and the waitresses were falling over each other. They didn't need any parking lot attendants and could have easily gotten by with maybe three waitresses.

After a month or so, the good cook moved on and the food quality got pretty bad. They raised the food prices so people stopped eating there. Then the price of beer went from 55 baht to 65 baht and people stopped drinking there. Even the farangs stopped coming.

The place went belly up and is now closed. They started our way over staffed and didn't wait to establish a customer base. Their overhead with a limited customer base caused losses and raising prices totally killed the place.

[MeMock]

My wife recently opened a small 'shopette' out of our Home, in the most offhand way- for a hobby, something for her and the Mil to do. Total capital in has been a smidgin under 6000 bht- 5000 for a second hand chest freezer (decent buy) and 900 bht for two metal display racks. What little else was required we already had, basically unused. So far, it has surprised me- our local market is tiny (we are in a rural area, between small villages), but we are about equidistant from the nearest shop in three directions- 3km of dirt track. So the locals are happy for the convenience, and happy to shop there for the basics. There is a table to drink at if they want, and we've recently started a small food menu- which has done OK too, and we grow most of the required veges.

Now, to put this in perspective, the profit will impress no one- about 5,000 bht a month based on one months trading- but as I mentioned, our market is tiny- maybe twenty households. It is more than I expected frankly. So If you have a decent location- i.e no other shops within spitting distance- it might be a reliable, albeit modest earner. Your potential market size is certainly a lot bigger, but so is your competition. Our most profitable line by far is Lao Khao - outside a School, yours might be different. Just a thought, anyway.

Hi Sabang, I have been wondering how your new business was going after we last spoke. To me, something as basic like that which has made 5,000 baht in it's first month is perfect for where you are. Build it up a little more and before you know it you will be the wealthiest business owner in the district!

[CTO]

Jumping Castle's.

At all the markets - markets rotate often - our village has 3 a week - others just one very big market.

I watched yesterday as I'd never seen one get inflated before.

Was great to watch - in first minute opening he had (two man operation) taken 150 baht. Stady trade all day.

Can't help but think that's a interesting little business.

Selling phone time I think I mentioned before.

[prakhonchai nick]

Our local Friday market has just introduced a trampoline in addition to the Jumping Castles. The kids love it.

[CTO]

Our local Friday market has just introduced a trampoline in addition to the Jumping Castles. The kids love it.

forgot that - we get them too - very popular no broken heads . . . yet