Starting A Small Business: Training Institute

[GuntherBKK]

Hi all,

I am a Belgian who is interested in starting a business in Thailand, not for fame or glory but simply because of the challenge and interesting economy.

I've been in contact with the Belgian Embassy in Bangkok, Flanders investments & trade counselor in Bangkok, Thailand Board of Investment, The Belgian Embassy in Brussels and the Office for Commercial Affairs and although I am getting bits and pieces together from all of them which are helpfull I still feel there is no real structure in that information so that why I decided to adress myself to people who have experience with starting and managing businesses in Thailand in the hope everything gets more structured and fundamented on facts rather then 'mights' and 'ifs'.

I started out with the idea of opening a shop with extra facilities in training and offering people a drink but the BOI told me that even when it remains possible to do that, the BOI will not approve a business plan with those commercial activities in it as they only wish to support / guide business who come to benefit the Thai economy. There are too many shops already and as for they are not considered a god investment in the Thai economy.

I have ears to this and their advice to forget about a shop and re-direct my focus to the training part of the idea would get me the support of the BOI...this does not mean the case will be approved at once as it still needs to be explained in detail in a business plan that will be send to Hannover, Germany for evaluation and the Thai administration of Economy.

The advantages of getting the support by the BOI are the following: "it is an official quality label, 100% ownership, several tax exemptions, etc..."

The 100% ownership alone is already appealing to me but although I am not sure, I believe I would not be able to apply for a corporate loan. Does anyone know if this applies as the BOI itself did not gave me a clear answer to that and directed me further to The Offoce of Commercial Affair here in Brussels and they, on their turn, direct me to the Belgian Embassy in Bangkok so I am starting to chase my own tail which is not helping or informing me at all.

So, if anyone knows the advantages and disadvantages of being 100% owner, please share!

The other option is to follow a path without the BOI which immediatly means I have to start thinking of a business with share holders. Is this advisable and what do I have to keep in mind with a company based on such structure? My first idea would be my GF and her family but how many share holders I need to search and what do they legally have to bring in the company?

Also, what is the difference in starting capital between those 2 types of businesses and how is this starting capital being treated? Does it need to be on an account or can it be used to build up the company (renting a place, decoration, equippement, etc).

Now, a more practical question which may be a bit too preliminary but nevertheless of importance. How would you all recommend building the business? I mean in terms finding a suitable office, decorate it and get it ready for its opening day. I can imagine this is time can be stretched and weighs heavy on expendures without income...this initially is the reason why I would consider to apply for a corporate loan to bridge the time and costs of setting it up

Thank you,

Gunther

[jamescollister]

May be I am reading this wrong, but first idea was a shop and next is a school; of some type. Sounds all a bit airy fairy and pie in the sky stuff. Do you have a business plan with projections of clients etc, or let me quess. First plan was an internet shop, come coffee shop and you were going to teach Thais about using a computer etc.

Back to the drawing board I think, new plan needed. Jim

[GuntherBKK]

Hi James,

I have a quite advanced business plan which included an hierarchy, a fully detailed description of the business, a detailed market strategy including a list of already interested existing companies, an operation strategy but two key elements are still lacking from it, namely a financial strategy and a design and development plan.

I did not think about a cheap internet shop at all as what I was aiming for is far more advanced and too specific and because of that the BOI already noticed there is opportunity in it. They just asked me to work out the training institute more in detail and for now forget about a shop-based business. I wasn't planning on teaching Thai to use a computer...they are perfectly capable of that themselves. My idea goes to other companes who wish to train their employees in several advanced fields of software...going from website design to software programming using todays modern techniques which I took classes for most of my life.

The problem of the Thai educational system is the lack of modern know how and this resuls in alot of foreigners getting expat jobs where I believe Thai's are perfectly capable getting those jobs themselves with the right training and support. Does this means I wil ignore the normal end-user who just like to take a regular 'course' on a short term basis? No, but they will not be the core activity of the training institute.

I am just looking for information about the advantages and disadvantages of certain business types from people who know what they are talking about as setting up a business in Thailand doesn't at all look similar to having one in Belgium...which I had btw but decided the Belgian economy and financial pressure are not worth it anymore and so I shut it down to invest in another region in the world.

So, if you have some constructive information I am always happy to hear about it

[jamescollister]

Hi James,

I have a quite advanced business plan which included an hierarchy, a fully detailed description of the business, a detailed market strategy including a list of already interested existing companies, an operation strategy but two key elements are still lacking from it, namely a financial strategy and a design and development plan.

I did not think about a cheap internet shop at all as what I was aiming for is far more advanced and too specific and because of that the BOI already noticed there is opportunity in it. They just asked me to work out the training institute more in detail and for now forget about a shop-based business. I wasn't planning on teaching Thai to use a computer...they are perfectly capable of that themselves. My idea goes to other companes who wish to train their employees in several advanced fields of software...going from website design to software programming using todays modern techniques which I took classes for most of my life.

The problem of the Thai educational system is the lack of modern know how and this resuls in alot of foreigners getting expat jobs where I believe Thai's are perfectly capable getting those jobs themselves with the right training and support. Does this means I wil ignore the normal end-user who just like to take a regular 'course' on a short term basis? No, but they will not be the core activity of the training institute.

I am just looking for information about the advantages and disadvantages of certain business types from people who know what they are talking about as setting up a business in Thailand doesn't at all look similar to having one in Belgium...which I had btw but decided the Belgian economy and financial pressure are not worth it anymore and so I shut it down to invest in another region in the world.

So, if you have some constructive information I am always happy to hear about it

OK here's my two bits worth, keep away from the BOI, as you will be buried under reporting requirements etc. BOI is good for big players who can deal with the paper work. If you are sure of your girl friend and are not putting up a large some go for a Limited Partnership in some form or other and work through the SME department.

We [ wife ] went that route and the SME department, were to say the least great.

Use an accountant not a lawyer, lawyers seem to know a lot about many things , but little about specific things. Accountants deal with business. You don;t see an accountant when you get done by the police, so why see a lawyer about business. Maybe of some help, best of luck. Jim

[GuntherBKK]

Any difference in the amount of money one needs to have as starting capital?

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[jamescollister]

Any difference in the amount of money one needs to have as starting capital?

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Gunther, any difference to what as starting capital. From what you have said so far you could rent a shop call it a noodle bar, pay 200 Baht license and you are off and running. Still sounds like an internet shop to me.

If companies are interested in your training package, train at their location, you don't need a place of your own, or rent conference rooms. If you are to small for that then you are too small for BOI or setting up Limited companies.

Sorry Gunther you sound like another guy with a dream and no money. Best of luck. Jim

[GuntherBKK]

The reason of a having a location is actually simple. The software, the equipment needed is better kept at one location. Certainly because there are several fields that will be trained. This from short-term courses to courses that will take 6 months, 12 months and 24 months.

I am not the one who will give the lessons. I already know qualified persons and all I will do is give them the chance to keep developing by letting them attend official training courses by the major software companies. Something I did myself.

The reason I ask of the amount of money is because it was thrown at me. Some say 1.000.000 baht and others say 2.000.000. When asking what the deal is about that, the official agencies give me different information as well. I would bring in 2.000.000 baht. I only need to know what licensing, registration, etc costs. Doing it without the BOI will require more control by myself and the Thai market and business structures are a bit...uhm...different to say the least.

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[GuntherBKK]

I will try to give a better view on what I did here in Belgium the last 9 years as it this similar to that what I was thinking about to do in Thailand

The training institute I worked for was a Microsoft and Adobe certified facility where companies sent their employees to to learn faster and more structured techniques in publishing and advertising. The software we used covered 3 methods to get to an end-product which included a full package that existed out techniques to plan, manage all the different part of the concept into one product and attach commercial channels in it. This was done by database software, design software and a bit of own programming to connect everything as a whole.

However, this was too much of a niche to take it in that format to Thailand so I thought of breaking the pieces down and offer courses in each of the different software fields so more people / employees can benefit from the taken lessons...either persons who are of the beginning of their careers to already seasoned users who still can use a view on the latest techniques or just wish to progress through to a more skilled and thus for a more attractive possible pick for a job they wish or the positions they wish to obtain.

End-users are a whole different ball-game. They prefer short-term courses with much more practical excercises and most of them aren't interested in the whole idea of how a certain software package can get you somewhere...they wish to do why they bought a computer for and within the least amount of time. That is why I also need to break the packages in different pieces...so it becomes more easy to put something together that suits the different markets.

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[jamescollister]

I will try to give a better view on what I did here in Belgium the last 9 years as it this similar to that what I was thinking about to do in Thailand

The training institute I worked for was a Microsoft and Adobe certified facility where companies sent their employees to to learn faster and more structured techniques in publishing and advertising. The software we used covered 3 methods to get to an end-product which included a full package that existed out techniques to plan, manage all the different part of the concept into one product and attach commercial channels in it. This was done by database software, design software and a bit of own programming to connect everything as a whole.

However, this was too much of a niche to take it in that format to Thailand so I thought of breaking the pieces down and offer courses in each of the different software fields so more people / employees can benefit from the taken lessons...either persons who are of the beginning of their careers to already seasoned users who still can use a view on the latest techniques or just wish to progress through to a more skilled and thus for a more attractive possible pick for a job they wish or the positions they wish to obtain.

End-users are a whole different ball-game. They prefer short-term courses with much more practical excercises and most of them aren't interested in the whole idea of how a certain software package can get you somewhere...they wish to do why they bought a computer for and within the least amount of time. That is why I also need to break the packages in different pieces...so it becomes more easy to put something together that suits the different markets.

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OK can understand what you want to do, but am no computer person and have no idea whether it is viable. Maybe you should post on the computer section to see what they think of the idea.

As for type of company set again no idea really, think you may want to look at how people set up schools to teach English, after all you are in the end teaching not making chairs or selling goods.

Take it slow and best of luck. Jim

[harrry]

You may also have to find out if it counts as a "school" and hence must be licenced and staff must have teacher's licences and the proprieter be a Thai

[GuntherBKK]

@ Jim

Thanks, will surely do that. Working on this with a 3 year time-window

@ Harrry,

That remark is indeed an interesting point. I was already looking into that as there indeed exist a big difference between a 'training institute' and a school.

Thanks

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[harrry]

@ Jim

Thanks, will surely do that. Working on this with a 3 year time-window

@ Harrry,

That remark is indeed an interesting point. I was already looking into that as there indeed exist a big difference between a 'training institute' and a school.

Thanks

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are you sure

1. Principle

The Teachers Council of Thailand shall have the authority to certify

professional knowtqe und experieJWe. including expertise in the practice of the

profession (Section 9 (8». Teaching profession is a licensed profession under the

Teachers and Educational Personnel Council ActB.E. 2546 (2003), and licensed

profession practitioners shall conduct themselves in accordance with the professional

standards and ,ethics as specified' by the Teachers CO\UlCil of Thailand (Section 48).

The professional standards include the. standards c of professional knowledge and

experience. The Teachers Council of Thailand Board has. specified that teachers shall

have minimum qualifications with Bachelor's degree in education or equivalent or

any {)ther.-edueationalqualification.asaccredited..by_t1le-T.eachcrs CouIlcilof Thailand.--

and shall have the knowledge in the f

[tombkk]

GuntherBKK, I am not convinced of your business idea. Fair enough, you don't need to convince me, but I think you missed some of the steps before opening a business in Thailand:

1. Have experience in this business (you seem to have it)

2. Be here, make contacts, and see whether you could get customers. In Thailand, business is much more relationship-based than in Europe. If you invest all this money without having a feel for the business environment here and without having any customers to start with, you might struggle to make ends worth.

3. Market analysis. I don't know about the market for IT training, you might want check this out first. Is there any unsatisfied demand for your services? If so, who are your competitors and why do you think you can get business as a new entrant in the market?

You will want to make a SWOT analysis as well as take a good look at Porter's Five-Force Model. In fact, since you say you have a business plan, these should be part of it.

With regards to your question about start-up capital, kindly note that the BOI regulations have no minimum. Neither is there a minimum for opening a company in general. However, if you want to work in your company, you will need a work permit. Under normal circumstances this requires the company to have a capital of 2 million Baht and four Thai employees, but I don't know whether the same is true for schools or for BOI-promoted companies.

As for BOI, their idea is to attract companies, preferably in the manufacturing industries, to create jobs. If your only reason to apply for BOI promotion (which takes a long time) is that you want to own the company 100%, I would advise instead to get an active Thai partner. Someone who knows the industry and has contacts, not a nominee. You will be grateful for all the insights you can get, and the things you can learn from him or her about doing business in Thailand. This is especially important since you appear to be coming to Thailand as a new expat.

This is just my opinion.

[GuntherBKK]

Hi TomBKK,

I quit being active almost 4 years ago and followed some peoples advice to first check out Thailand and also spend time there with my GF and her family. I've been in Thailand for 3 years (language schools...so easy to have no Visa worries) and have some connections through people from IT-City and graduates who finished their IT studies. Most of these guys need to go abroad to find decent jobs as there are alot of expats taking their jobs with more on-the-level knowledge and skills while the knowledge of these graduates should be more then suffice to be tweaked to Western levels and standards

I value your input quite alot and will surely take a deeper look into the things you wrote down

Thanks

[tombkk]

Good luck, and please let us know if you have further questions.