Business failure rates in LOS?

[jaideeguy]

We see them all the time.......new shop open for 5 or 6 months [if lucky] and then suddenly closed. I've had a couple of failures myself and have come to the conclusion that Thailand is not the best environment for small businesses.

Anyone care to venture a guess or have real statistics on business failure rates here??

[kannot]

They build a row of shops they all sell food and then 7-11 or tesco moves in and they all close.

[theblether]

Aha!! A chance for me to tell a Thainess story.

A friend of mine was looking at taking over a business. She spoke to her brother who recommended that she should go get a spiritualist to check out the premises as the business had a habit of changing hands. Anyway, she duly turned up with the spiritualist and was told that the Angel of the land didn't want that type of business there and it would always be destined to failure.

So she pulled out of the deal, cos a spiritualist told her the Angel wasn't happy.

I've noticed that many Thai new starts don't seem to have the first clue of what they are doing. I watched a business just along the road from me putting up a sign probably back in January, and it took until September before it opened. It's only a small cafe, not exactly a multi national headquarter. When I decide I want to open a shop I want it open and earning as fast as possible. My fastest ever opening was two days after the lease was signed, and the shop was beautiful. That's because I put a day shift and night shift team in place. Get the money in !! I earned enough on the first day to pay for the entire opening costs.

I can think of at least three business within 100 metres of my hotel that are lessons in how not to do it. people over paying when they buy, people putting businesses in slow footfall areas that need high footfall, and businesses that seem to think they can open and shut when they please. That's a sure way to annoy your customers.

Maybe I should start a business consultancy and hire in a few spiritualists. That might do the trick.

[soi41]

As for the farang failures: If you never have done business in your homecountry, what makes you think you will succeed here??

As for the high rate of Thai failures:

1) Forgot to include the overheads in the businessplan.

2) Some rich familys wife/kids decide to "play business", get bored quickly!

3) If someone against the odds are successful, their idea will be copied=3 simular shops in the same street!

[Heng]

Business failure rates for new business are supposedly high period... anywhere. At least that's what they seemed to want to get the point across about in college.

I have had 2 crash and burns and about a dozen 'still puttering along with mild profit' and a nice 'bread and butter; laughin' all the way to the bank' or two as my Thai business history. In that order, too. If you can get past the crashes and learn your lessons...... of course that's the same anywhere.

Edited October 20, 2013 by Heng

[HeijoshinCool]

It usually makes me sad when I see it. Some of these people really want to work, are willing to work, but because of, in great part, the crap educational system, as well as their total lack of understanding anything not Thai, they are doomed to failure.

People across the street, in a one year period: noodle soup (already dozens here); selling used tires; selling fruit juice; doing laundry; grilling fish. None lasted more than a month or two. I rarely saw customers. Now they're back to cutting rubber trees and making more kids.

If you do come up with a new idea, even patent it, others will quickly copy it, competing with you.

With a population of 3000, Rhek Thum has over 50 hair salons, dozens of noodle soup stands, a million guys who can't repair a motorbike, but say they can, and a dozen internet shops that are used solely for playing video games. There is not one innovative business here.

ASEAN will make zero difference for Thailand.

[chrisinth]

IMHO, the failure rate of small businesses here in Thailand is the lack of long term (or in some cases medium term) vision or planning. For some reason, a lot of people tend to think that opening a business only involves buying/renting a premises, stocking, staffing and away you go. Sit back and watch the money pouring in............. This is what I have seen on numerous occasions.

When we my wife had the bar & restaurant; this was open for 12 years and 8 months, the general life of a new business where we were was between 3 and 6 months. This is what I called the honeymoon period. Let me explain my logic on this.

A new business would open. Thais being the curious people that they are would visit the new business to check it out. Because of the number of visitors, the sales would naturally be good and the owner and staff happy. Somewhere else new opens, and the previous customers go to check out the new premises, leaving behind a few. Sales go down from what they had been and the management start to panic. Regardless of what the investment was, they see the drop of custom as a failure, pull pegs and move on.

Again IMO, anyone who opens a business (anywhere) and doesn't give it at least a year to assess, doesn't deserve to be running said business.

[chiangmaibruce]

Yes there are some stats available here on start-ups versus wind-ups, though won't give you the complete picture.

Don't have the page URL's for the exact tables with me, but these are cited somewhere in Chapter 7 of this book should you wish to snap up a copy

Edited October 21, 2013 by chiangmaibruce

[NeverSure]

TheBlether, I have to tell you that I have gotten filthy rich by being a spiritual consultant. I always tell people the spirits are against their idea. Then they pay me handsomely and don't open the business, so my predictions are 100% accurate so far. I am becoming very famous for always being right.

[thailiketoo]

Maybe read, Fool's Gold?: The Truth Behind Angel Investing in America (Financial Management Association Survey and Synthesis Series

Overall, the number of UK companies that collapsed during the month fell to 1,271, down from 1,376 a year ago and the lowest figure since June 2007.

What is the rate of restaurant failure in the civilized world? 80% FAIL RATE: Meet 13 Of The Many New York City Restaurants That Closed Last Year http://www.businessinsider.com/new-york-restaurants-fail-rate-2011-8

[mrtoad]

The best business is becoming a politicain in Thailand, but that's a restricted profession.

However, I doubt there is much difference in Thailand , than many other countries when looking at failure rates. The key is to find something original, and also not stay complacent or think that money is going to roll in without putting the work in. You also need a bit of luck.

I think there are plenty of success stories out there as well, although beer bars don't seem to be a very stable investment.

[swissie]

I venture to offer an explanation: Market forces (SUPPLY AND DEMAND) are not being understood by the Thai-Populace. Not to this very day. Especially not in rural-Thailand. Even my stepdaughters with university-degrees are not able to understand this mechanism (Supply and Demand).

So, what magic is it, that the Thai-Economy is alive and well and growing every year ? I SIMPLY DON'T KNOW !

Anyone in the know: Tell Us !

Cheers.

[Heng]

I stick with buy for 1 Baht, sell for 2 Baht. I don't think one professor mentioned that one in school. IMO blaming education is a cop out. Business is more discipline and tradecraft than academics.

With cut orchids for example it's around buy/produce for .XX satang and sell for X-X Baht. That's not a suggestion by the way, it's a no-go unless you have a stake in the various plantations, a refrigerated truck fleet is also somewhat capital intensive.

[oogster8]

Open a business consultancy- You model is just say NO to anything. Statistically you will cum out way ahead. Many happy customers. And a never ending supply of them.

[Wimbledon]

BUY LOW SELL HIGH ! There is no better EQUATION