What kind of income can you expect from a tourist-driven SME in Chiang Mai?

[Bananaman]

Yes, I know that this depends on a multitude of variables but I'd like, if possible, to try and gauge a ballpark figure for a monthly income from, say, a small but successful eatery in a reasonably decent location in the old city, or any other tourist frequented area for that matter.

If the specs are too vague and it's an impossible question to answer, then I apologise in advance, but any helpful advice would be greatly appreciated.

[taotoo]

A guaranteed billion baht per month, at least according to the owners when they try and offload them.

[Bill97]

Pie in the sky.

[naboo]

0B to 100,000B (very successful businesses may take more).

A standard, long standing business may take 1000B to 5000B depending on the season. Low season, breaking even after bills is successful.

All my guesstimates.

[MadMac]

If everybody sells noodles you would not have enough to eat. Forget it.

[mamborobert]

I think for a lot of SME hospitality related businesses such as bars, restaurants, tour agents, etc you also have to look at how good teh season is and how long. You cannot extrapolate one month for all months.

Up until maybe two years ago (when there were a lot more tourists with spending money) my wife worked as a cashier in one establishment that in high season often net 100k Baht a month. Trouble is that there were also a handful of months where the owner had to kick in to cover salaries, rent and utilities.

SME in tourist related businesses at the moment appears to be more of a gamble than an investment.

The (Thai/Chiang Mai) economy itself is not looking good on a local, national ASEAN, or worldwide basis. At the moment there are many factors outside of the control of any proprietor that will have a detrimental affect running from arbitrary and new policing initiatives, junta smell test, another gruesome murder, constitution referendum,initiatives under bringing happiness back to the people, upcoming significant court cases, etc etc etc all which will not paint Thailand in a good light despite he best wishes of TAT.

A good idea even five years ago...maybe a good idea in five years time......but now????

[NeverSure]

Maybe you'd do better by asking a mod to move this to the business section.

[Suradit69]

Maybe you'd do better by asking a mod to move this to the business section.

"Maybe you'd do better ..."

Depends on what you mean by "better."

This sort of question is posted several times a month and the responses are pretty much the same. Anyone thinking of opening a business and asking such an unanswerable question on Thai Visa in any forum is almost certainly headed for disaster. As he himself admits there are countless variables, so what sort of a meaningful answer would someone expect?

As a mental exercise, ask yourself what you would do to sell your proposition to a bank so that they would lend you 75% of the cost of setting up. I expect announcing that you want to set up a tourist driven restaurant and you collected data from random posters in Thai Visa would provide the loan department some comic relief on a busy day.

Naboo's response of Baht 0 to Baht 100,000 is probably the most accurate, although the lower number should probably include negative amounts.

[naboo]

Naboo's response of Baht 0 to Baht 100,000 is probably the most accurate, although the lower number should probably include negative amounts.

Sorry, my figures were daily revenue, not monthly which the OP asked for.

[Dante99]

Bananaman,

Don't do it.

[asdecas]

Maybe you'd do better by asking a mod to move this to the business section.

"Maybe you'd do better ..."

Depends on what you mean by "better."

This sort of question is posted several times a month and the responses are pretty much the same. Anyone thinking of opening a business and asking such an unanswerable question on Thai Visa in any forum is almost certainly headed for disaster. As he himself admits there are countless variables, so what sort of a meaningful answer would someone expect?

As a mental exercise, ask yourself what you would do to sell your proposition to a bank so that they would lend you 75% of the cost of setting up. I expect announcing that you want to set up a tourist driven restaurant and you collected data from random posters in Thai Visa would provide the loan department some comic relief on a busy day.

Naboo's response of Baht 0 to Baht 100,000 is probably the most accurate, although the lower number should probably include negative amounts.

Yes, succinctly put.

I'd add, though, that the sheer number of foreign males looking for ways to stay in Thailand with their partners and generate an income sufficient to sustain an at least partly Western lifestyle has grown exponentially over the last 15-20 years.

Personally, I would avoid anything tourist-related; sure, there are successes, but there are far more cases of people going bust in an overcrowded market, losing their capital investment and having to retreat back to their home countries.

For what it's worth, my advice is look for a niche market far away from anything tourist related.

[Ricardo]

As an accountant, I'm probably a bit of a pessimist by nature, although we prefer to call it being conservative.

I see plenty of new businesses start-up here, and a lot of them close again fairly quickly, so I'd say the answer to the OP's question is "a negative income", unless you're exceptional !

I've also seen some good well-run businesses give up, when the property-owner saw that they were doing well, and doubled their rent.

Never forget the old maxim, you don't bring money into Thailand, which you're not prepared & able to afford to walk away from.

Edited January 30, 2016 by Ricardo

[ianf]

Bananaman,

Don't do it.

Some people opened successful small restaurants here in the past few years. A good example is Nic's in Hang Dong who offered play space for kids and decent food. Little Italy on the same road is also going in the right direction with excellent Italian Food cooked by his Thai wife. These restaurants attract local expats as welll as Thais and so there is a possibility of developing a business. Another great example, again in the same road is Swiss Origin. Starting from scratch Alan baked bread and croissants, offering light lunches and snacks. Open from 7am until 6pm every day he attracts some Thais and many local expats. The ne'er sayers here tend to be dismissive, but like anywhere in the world, if you have a great idea, a good business plan and a realistic attitude, then you can make a go of it. My only word of caution is to ensure that your Thai partner understands the nature of Thai bureaucracy.

[MaeJoMTB]

Number of successful foreigner run eatery in cm .......... Three.

DELETED

Number of failures ........ Thousands.

Edited February 1, 2016 by seedy
libel / defamation

[gemguy]

And to add to all the advice and speculation.....If and when you do become successful, it is near guaranteed you will start of have a variety of problems ( some unexpected and some expected ) coming down on you because of your success.`

Cheers

[Dante99]

Bananaman,

Don't do it.

like anywhere in the world, if you have a great idea, a good business plan and a realistic attitude, then you can make a go of it.

The OP lacks those three things, if he had them he would not have posted.

[1FinickyOne]

Best to walk around the area and look at all the competition - check out the vast menus in the successful ones - see how busy they are on a whole...

restaurants are a lot of work - good luck if you go ahead, yes it can be lucrative, though surely not for most.

Try and find a way to make your establishment stand out from the crowd.

[alant]

Really tough to answer, the well established places, tour retailers, car and bike hire seem to be quite busy at the moment but location, what you offer and how you present the offering will make all the difference. I agree with all of the sentiments that air caution due to circumstances beyond your control. The no alcohol lobby may still implement the non sale within a 300m radius of an educational establishment and that would close a lot of businesses, maybe the bulk of the old city. Once businesses close in an area there is a danger of the ghost town critical mass being reached where both new operators and customers shy away from the area. Combine this with the possibility of bad press from any one of a large number of possibilities any your market may be small.

One tip, employ Chinese speakers.

[TheSiemReaper]

Your business is doomed to failure. You wouldn't be asking this question here if you knew how to run a tourist-facing business or had the experience in that industry. It also means you have no business plan and have done no market research at all. The best businesses make money because they're run by talented, experienced people with serious passion for their craft. You lack the passion too... or again you wouldn't be asking this question. Save your money and do something else.

[Briggsy]

How many meals/plates will you sell a month at how much. Add any ancilliary income.

Now you have your monthly revenue.

Calculate your monthly fixed costs.

Decide on your profit margin.

Et voila you can calculate your monthly profit or loss.

You can thank me later with a free bowl of noodles.

[Mr Money Bags]

How long is a piece of string?

It's pretty much the same question......

You're Welcome!!

[Shiver]

I do not know the answer to this, but it is something on my mind also. I have an idea that the GF can do very well, is hard to copy, and (relatively) inexpensive to buy the hardware for. If my numbers are realistic then she can earn a fair amount more than me, and I'll suggest that I will then be a kept man (I'd do that to test the relationship since I'm the provider for everything at the moment). She wants to go and do training for insurance sales in BKK and I'm shaking my head. Everything about it says "no no no no". I have a plan here where you can own your own business (it's only street food, but heck, you'll be doing better than 99% of your peers, and me also, and lightening my load to boot!), and take a week off once in a while when we go on holiday, which an employer wouldn't tolerate, but in this case you'd be your own boss. I can report back on this if it happens, but it would likely be months away at least.

[lordblackader]

Bananaman,

Don't do it.

Some people opened successful small restaurants here in the past few years. A good example is Nic's in Hang Dong who offered play space for kids and decent food. Little Italy on the same road is also going in the right direction with excellent Italian Food cooked by his Thai wife. These restaurants attract local expats as welll as Thais and so there is a possibility of developing a business. Another great example, again in the same road is Swiss Origin. Starting from scratch Alan baked bread and croissants, offering light lunches and snacks. Open from 7am until 6pm every day he attracts some Thais and many local expats. The ne'er sayers here tend to be dismissive, but like anywhere in the world, if you have a great idea, a good business plan and a realistic attitude, then you can make a go of it. My only word of caution is to ensure that your Thai partner understands the nature of Thai bureaucracy.

This.

If you can find a good niche and do it well you might have a chance of building a decent enough business, at least by Thai standards.

I live around the corner from L'Opera, a French bakery at the end of Sridonchai Rd, run by a French guy and his wife, there are always people in there and they make great food. I don't think he's making millions of baht but off season and high season he'd definitely be covering his costs.

That said there are soo many failing businesses in CM it's insane. So many of the same same type places that struggle to attract anyone at all. When I lived at the Chiang Mai Gate I walked around the SE corner of the moat (in the old city) day and night and there are business over 3 years that I've never seen one person in no matter what time of day or night, high or low season.

[onni4me]

Shouldn't really answer anything this vague of a question but since I have little time while drinking coffee and looking out of the window to my garden I'll try.

1. Where are you going to have the business? What type?

I would not care to gamble on just tourists or expats as customers. I would be looking something that Thais would like. Food probably being the easiest option. I know a lady that prepares 3 different soups in big cooking pots and sells them at the local market put in bags. Carry away. She averages 3000 Baht a day from that and it only takes morning to prepare them and she goes to market and sells them in short time, few hours, so she doesn't have to be there all day.

You can rent a place from shopping center/food center which will make money if you are popular and rent/cut is reasonable. The downsize is that it is very regulated.

Recently there has been new evening markets that seem to attract customers. Downsize is that rents are high. Few make much profit.

I am looking the town I know most and I only know 3 street side "restaurants" that are popular and make good money. They also employ quite a few people, a dozen or so, serving the customers. They sell 'kau man gai' and sort of pork noodles cooked from bones and meat. Good taste, affordable with 40 Baht prize tag and lots of customers - and dishes...

Your own restaurant would be the last thing I would recommend. High rent/dependency on the owner (= unpredictability) and the fact that Thais generally don't like foreign places/owners if it is not some food chain when it is not an issue.

2. Customer base

I have had several businesses in Thailand last 15 years. Some failed, some succeeded. My mistake was also concentrating on the tourist/expat business first. There are, after all, 67 million Thais or so. Nowadays my customers are 90% Thai and some tourists. It means the income is slightly lower but I have customers every day.

One of the regular mistakes is to come here as a tourist, spend money in a bar or restaurant and think that one can do that himself. If you have no previous experience, it will take a lot of time and money to get things right. Expect to fail at least couple of times. Knowing your market is something you really need to know very well.

Also, knowing how much everything costs is vital. Many also make the mistake that they belittle the costs and compare them to wherever they come from. This is Thailand so look at the local prices. As a rule of thumb, from the sale price 50% is profit from which you need to pay rent, and salaries and other costs.

3. Finances

Prepare to take loss for the first year or two if you are making anything bigger. Shop or permanent business. There are no sudden success stories without a lot of work and thinking.

In my opinion you cab expect average 7-12 % return on your investment. So, a million brings back 70000 - 120000 Baht a year. 10 million 0.7 - 1.2 million. Most guys don't have that kind of money. If anything, now knowing how things work here, I would put a real investment in. I was too cautious in the early years but that time I really didn't know enough about running a business here so maybe it was wise in a sense. I would say that 10 million investment - wisely used - you can make enough money to live here. I bet there will be guys saying that one can success with much less but I have very strong doubts about it.

Good luck. You are going to need it.

[SGD]

The concept of investment in Thailand is changing away from the mom and pop shops to much higher and more long term investment with clear goals and objectives. Selling crud to the public from a shack was ok 20 years ago, perhaps even 10 years ago but look around you now and see where the business is - it is brand names, good quality fitments and not bargain bucket start ups.

If your business plan is so poorly developed as to ask strangers on an internet forum then you are not even at the point of starting your market research, let alone cash flow forecasting.

[bazza40]

I live around the corner from L'Opera, a French bakery at the end of Sridonchai Rd, run by a French guy and his wife, there are always people in there and they make great food. I don't think he's making millions of baht but off season and high season he'd definitely be covering his costs.

That said there are soo many failing businesses in CM it's insane. So many of the same same type places that struggle to attract anyone at all. When I lived at the Chiang Mai Gate I walked around the SE corner of the moat (in the old city) day and night and there are business over 3 years that I've never seen one person in no matter what time of day or night, high or low season.

Think the food at L'Opera is overpriced for what it is. Suspect it would mainly attract falangs, not Thais.

The big problem with any business in CM is if it shows any sign of success the landlords hike the rent. So the people running the business either shut up shop, or move elsewhere. Very intelligent.

[jacksam]

The OP is out of his depth. You come up with your own business plan based on kudos and observation. Not saying I'm clever with the following little tale. Just giving an example. I live bkk steps to Chinese embassy. Ratchada. Anyway like most areas there are lot of scrappy internet cafes. I had been thinking someone should do a complete makeover in a shop fit it out with new good computers and printers/photocopy. Maybe even good quality cafe next door doing good coffee. Not food. Then yes you guessed it. Flash makeover in existing internet cafe. All these thai guys sit outside with their wads of visa applications. There is farang style cafe across the road. Many thai esp the 30 down group are into these. Both businesses seem to be doing very well.

No offence op, but if your testing the water asking advice from thaivisa then your done before you start

[shirtless]

Just remember the demographics of the tourist market has changed , You really need to think carefully at this point in time.

[SantiSuk]

In my local regional Thai city (not Chiang Mai):

Most successful (by footfall) falang restaurant - I estimate has less than 200 customers a day

Most successful Thai restaurant - I estimate has well over 2,000

The Thai restaurant is maybe twice the size of the falang one but is open for less than half the hours of the falang one. The Thai restaurant is quality food so the average rev per customer is probably not that different.

If you have an idea or have copied one to be applied in a different location, start small, start basic, experiment around the edges, see what flies, rent-not buy where possible, adapt, expand on the back of some confidence not a whim. The number of businesses that falang start that I have seen in many different towns and resorts it makes my (retired) accountant's eyes (yes - I'm another one!) water and my tummy rumble at the impending disaster when watching so much expensive kit and decoration being proudly thrown into a whim of an idea by an enthusiastic expat.

[bangmai]

It's going to be hot as Hell in a month....coffee? really? It's not hard to see what is missing from the farang ghettos, besides soap...but people don't consider the very high costs/taxes on wine/cheese/beef....or do they consider how high rents are in those areas.