Leasing a bar in Koh Chang

[qwertymerk]

I know you've all read this sort of thing probably a million times before, but hear me out please.

I'm planning to lease a bar in Koh Chang. It's a small venue on one of the main strips, which is ideal for regular custom but also bad because there's a couple of bigger bars to compete with. I am friendly with a few of the bar owners & staff on the main strip and they have told me it wouldn't be an issue if I leased a bar and it would be a good idea. I'm friends with a few other business owners who have said they'll help me with everything and told me not to worry about any trouble occurring.

The last thing I want is any trouble, so I'm guessing I'd need to have some tough and reliable staff working for me just in case anything did go wrong. Another thing that worries me is the ratio of farang:thai bar ownership. There's barely any farangs running bars in Koh Chang, I'm not sure if this is irrelevant or not but it just crosses my mind.

I've spoken to my good friend who is a Thai lawyer and he has also told me the same thing that I've read on here (97% of the people who open bars end up failing). Well, I'm not putting a lot of money into it and it's something I'm prepared to try, so I'm giving it a go either way.

Being new to this sort of thing, what would be a good list of things in order to do now to get this venture in process?

Example:

Step 1:

Step 2:

Step 3:

etc...

Serious advice would be much appreciated.

Thanks

[ubonjoe]

Moved to the business forum.

[robblok]

Question is.. have you any experience running a business or and more specifically a bar in your life ?

If not.. huge chance you will fail.

I am an accountant and even for people who start a business in their home country its hard with a learning period that can be more then a year. Now you are starting a business in a strange country.. and if you don't have relevant experience then it will be even harder as starting a business back home.

[impulse]

I'd be curious to know the following:

1) Your residence (visa) status, family situation and nationality

2) Whether this is intended to be a money making venture (like paying the rent and food and funding retirement money) or a hobby to occupy idle time.

3) Is this an existing bar that you'll be taking over, or a new business you'll be starting from scratch

4) Upfront fees and monthly rent. (Not including operating expenses)

5) Any experience you may have in retail, especially the hospitality business

6) Your plan for Thai participation in keeping with the 51% rule. (If you're not entitled to 100% ownership because of nationality)

Not that I'd have any advice anyway, but it's helpful to know a little more.

Edited April 29, 2016 by impulse

[qwertymerk]

I'd be curious to know the following:

1) Your residence (visa) status, family situation and nationality

2) Whether this is intended to be a money making venture (like paying the rent and food and funding retirement money) or a hobby to occupy idle time.

3) Is this an existing bar that you'll be taking over, or a new business you'll be starting from scratch

4) Upfront fees and monthly rent. (Not including operating expenses)

5) Any experience you may have in retail, especially the hospitality business

6) Your plan for Thai participation in keeping with the 51% rule. (If you're not entitled to 100% ownership because of nationality)

Not that I'd have any advice anyway, but it's helpful to know a little more.

1) I'm currently on a tourist visa, I'm British.

2) I'm not there to make money, just get by.

3) It's an existing bar.

4) 500,000 - 1M baht. 12,000 baht monthly rent.

5) I don't have much experience in that field but I have friends who own bars a few meters down the road who are willing to help me before I get the bar running.

6) 49% ownership for me, then 26% to my girlfriend and 25% to my other thai friend.

[OMGImInPattaya]

I'd be curious to know the following:

1) Your residence (visa) status, family situation and nationality

2) Whether this is intended to be a money making venture (like paying the rent and food and funding retirement money) or a hobby to occupy idle time.

3) Is this an existing bar that you'll be taking over, or a new business you'll be starting from scratch

4) Upfront fees and monthly rent. (Not including operating expenses)

5) Any experience you may have in retail, especially the hospitality business

6) Your plan for Thai participation in keeping with the 51% rule. (If you're not entitled to 100% ownership because of nationality)

Not that I'd have any advice anyway, but it's helpful to know a little more.

1) I'm currently on a tourist visa, I'm British.

2) I'm not there to make money, just get by.

3) It's an existing bar.

4) 500,000 - 1M baht. 12,000 baht monthly rent.

5) I don't have much experience in that field but I have friends who own bars a few meters down the road who are willing to help me before I get the bar running.

6) 49% ownership for me, then 26% to my girlfriend and 25% to my other thai friend.

Sounds like a rock-solid venture to me...good luck to you. ?

[maprao]

Good luck

Everyone says it will fail but give it a try

It is not your main source of income so you will not be stressed if it does not make money

Nothing ventured nothing gained.

I look forward to seeing your post to tell us that it is doing ok.

Nice location you have chosen

[qwertymerk]

I'd be curious to know the following:

1) Your residence (visa) status, family situation and nationality

2) Whether this is intended to be a money making venture (like paying the rent and food and funding retirement money) or a hobby to occupy idle time.

3) Is this an existing bar that you'll be taking over, or a new business you'll be starting from scratch

4) Upfront fees and monthly rent. (Not including operating expenses)

5) Any experience you may have in retail, especially the hospitality business

6) Your plan for Thai participation in keeping with the 51% rule. (If you're not entitled to 100% ownership because of nationality)

Not that I'd have any advice anyway, but it's helpful to know a little more.

1) I'm currently on a tourist visa, I'm British.

2) I'm not there to make money, just get by.

3) It's an existing bar.

4) 500,000 - 1M baht. 12,000 baht monthly rent.

5) I don't have much experience in that field but I have friends who own bars a few meters down the road who are willing to help me before I get the bar running.

6) 49% ownership for me, then 26% to my girlfriend and 25% to my other thai friend.

Sounds like a rock-solid venture to me...good luck to you. ?

Good luck

Everyone says it will fail but give it a try

It is not your main source of income so you will not be stressed if it does not make money

Nothing ventured nothing gained.

I look forward to seeing your post to tell us that it is doing ok.

Nice location you have chosen

Thank you both for your supportive comments. Much appreciated

If anybody else has any advice or things to be careful about, please share.

Thanks

[beano2274]

remember the work permit, do not get caught without one

[The Big Mango]

^^ also

company registration ,

Non B visa

2 or 4 registered Thai staff depending on company structure.

Tax and NI contributions each month.

Accountant fees.

Correct licences

Fees to BIB

Etc

Etc

[Paul944]

Does the place has a staff that stays? If not forget it. Getting reliable staff will be your biggest issue.

If your idea it to get by, forget it. It will cost you 2 million baht to stay 1 year in business. You will need about 100,000 baht a month to pay the wages/rent/electricity. Say you have 40 baht profit per beer bottle. You have to sell 2500 bottles a month

[phuketjock]

remember the work permit, do not get caught without one

Owning or part owning a business of any kind in Thailand doesn't require a

work permit unless you are actually working, mere ownership is not considered

as employment or work. So let the girlfriend run the bar and brief her and all the

staff that should anyone enquire that they should tell them you do not work there.

But don't be seen behind the bar, you can easily run the place from the punters

side of the bar without being obvious. It's not rocket science. I wish you all the very

best but unfortunately an old saying springs to mind "A fool and his money are soon

parted" Good luck.

[BritTim]

Before going ahead, find a foreigner who has owned a small beer bar anywhere on Koh Chang for 5 years, and is still in business, and ask them how they did it. Usually, such individuals will be very proud of their achievement and happy to recount how they succeeded when almost all others failed.

I have known smart people with extensive experience in the hospitality business, including managing large bars here in Thailand, who have had a hard time turning a profit in their own small bar business. Local owners have a huge advantage, and you need to be much smarter than them to successfully compete

I do wish you luck. I understand why the idea is appealing. However, the venture only has a chance of success if you approach it from a hard-headed business perspective. You must develop a detailed business plan in advance that itemizes all your expenditure down to the last baht and is realistic about income (especially in the low season). You then need a way to make the numbers work. When, and if, you go ahead, you need to track actual income and expenditure (daily) against plan, identify the reasons for discrepancies, and continually tweak your plan to achieve and retain positive cash flow.

[Asiantravel]

OP how familiar are you with Koh Chang in terms of the tourist numbers now compared to say five or six years ago? how many times have you been there to KC and how well do you know the island?

I know it may not be an easy thing to do but try to get to know a few Thai's that are in business there as opposed to just foreigners and you will find out there are a significant amount of businesses on the market. I'm not just talking about bars I'm talking about resorts and restaurants also.

Ask a few of these people why they are selling up and what kind of future they see for the island's tourism business.

there are now so many Koh Chang resorts being offered for sale on the market that the business brokers on the mainland show very mild interest in taking on yet another listing to add to the many they already have.

I don't think you will need to talk to too many Thais to realise many have given up on the place.

Edited April 29, 2016 by Asiantravel

[bwpage3]

Did you have any idea how many customers you will have in the LOW season? Actually zero.

That is why so many businesses on Koh Chang fail.

The three months the tourist are there you can survive, the rest of your time, try to understand who you customers will be?

The locals?

Do you think the Thai's are going to standby and watch a farang cut into their profits? Really? Then you have already failed.

There are not enough customers in the low season to make 12,000 thb a month.

Have no honestly seen any business making good money sold in Thailand?

If the business was good it wouldn't be for sale now would it? It isn't like there is a boat load of jobs on Koh Chang to support the locals.

Your GF has your head all wound up in fantasy land when you might as well piss that money off because it will all be lost.

You will be the one bar paying the police every month. If you don't understand this, you soon will.

Too late after you already invest your cash and find out you cannot make it.

[qwertymerk]

I understand what a lot of you are saying in terms of paying off the police and surviving low season etc.

However, as for the girlfriend, she has never mentioned the idea of moving to Koh Chang, she is quite happy doing whatever she wants, she has been a hairdresser all her life and hasn't even pushed me to make the slightest decision in running a business.

I will speak to some more friends on the island and try and get in contact with some farang business owners over there. Every time I have been there, I have noticed a South African guy running his bar every time successfully, and his bar is located in a quieter area than I plan to run mine.

[bluesofa]

^^ also

company registration ,

Non B visa

2 or 4 registered Thai staff depending on company structure.

Tax and NI contributions each month.

Accountant fees.

Correct licences

Fees to BIB

Etc

Etc

To me, the post above seems to have a very sensible approach.

My qualifications to offer any opinion? When I moved here eighteen years ago, I bought a bar and ran it legally for seven years, making decent money every year.

But there again, I didn't do it because it was a dream. It was purely a business opportunity, nothing more.

I think too many people come here with the dream of a bar, the reality is different. I always remember back in the UK a lot of people used to say how they'd love to run a pub when they retired. For me it was the last thing I'd want to do, I enjoyed being a customer,

[blackcab]

Running a successful bar is hard work. It is also very time consuming.

Is that what you or your partner want?

[mgjackson69]

Some cash flow figures from the current owner would be interesting to see....taken with a grain of salt, of course.

[impulse]

I'm only interested in easily traded paper investments that carry little risk and require no effort from me, apart from keeping an eye on them and buying/selling if necessary.

Problem with that plan is that it's a non-starter unless you already have a significant nugget.

Most of us had to first make the money we can passively invest... For us, a little sweat is the only way we could get any equity (not to mention food and rent money).

I salute the OP for wanting to try. I'm not saying it's a good idea, but it's a better plan than resigning himself to the inevitability of being a bitter, old, broke SOB sitting on someone else's barstool, paying for someone else's beer, complaining about being left out of opportunities in Thailand.

Edited April 30, 2016 by impulse

[iamjack]

It really depends, I don't believe the fact that there's a sure fail business. It's all about planning, marketing, managing and profit making.

1. What makes your Bar stands out ?· Price / music / atmosphere

2. Planning & Market research. When is the peak and what to do during Low season with no tourist.

3. 1 common mistake i realize about Farang Bar Owner is that they do every thing just to Earn money from Farang. * Don't forget about the Thais, During Low season you'll see Thais Traveling from Bangkok to Nearby Province on weekends. Your business should attracts both locals and foreigner.

4. Last but not least Think Twice if it's worth the risk and do you really need the Bar? I'm sure it cannot offer you a work-permit. A tourist should do what a tourist do take the 1M you are going to invest and think of what you can do with these money. Although to some people out there it might not be a huge sum of money, but it can really someone's life. Won't want to see anymore Homeless Farang sleeping on the beach because his wife took all his money.

OH and i forget this important part. If you are going to lease a bar and the Last thing you want to trouble? I'm telling Trouble is the first thing you'll get into

Edited April 30, 2016 by iamjack

[mgjackson69]

Question is.. have you any experience running a business or and more specifically a bar in your life ?

If not.. huge chance you will fail.

I am an accountant and even for people who start a business in their home country its hard with a learning period that can be more then a year. Now you are starting a business in a strange country.. and if you don't have relevant experience then it will be even harder as starting a business back home.

Pray tell, how would one go about getting experience running a business, other than to run a business?

Sure, it is much lower risk to go run a business for someone else, but again, where would you get the experience to convince someone to hire you for that job?

Some people have some inherent ability to "be a manager"...my stepfather has no formal education, and barely made it through high school (by his admission, "I was one of the dumbest son-of-a-bitches to ever come out of there"). Yet, he has been his own boss since age 20, and has been successful in any number of ventures. At age 78, he currently has nobody working for him for the first time in 56 years.

Stating that you are an accountant gives no particular credibility to business advice you might give.

What you have said is absolutely true...it is a very large percentage of businesses that never make it past the first year. Many are undercapitalized; they have startup money but nothing to keep them going until the business starts making a profit.

Another post mentioned this, but I will say it again, it is important:

How is my bar better?

There was a photo posted of a row of bars, similar to any number of places throughout Thailand. At first glance, they all look about the same...so think about what you can do to differentiate your bar. Lower prices? Daily specials/promotions? Nicer wait staff? Better music? Live bands?

Does the place currently sell food? If not, consider doing so. Yes, it is a lot more work, but it will increase your traffic and profits, especially for a year-round business that has to depend upon locals for part of the year.

[qwertymerk]

Change of plan.

One of my Thai friends who owns a bar in Koh Chang has told me I can buy into partnership with him for 150,000 baht (for refurbishment). He's been running the bar for 15 years but hasn't got that kind of money lying around to refurbish the bar and make the bar better at the moment so that may be why. He's also getting old and would prefer a bit of help running the bar.

I've spoken to my lawyer at AAA Legal Advisors (based in Bangkok and been running for 27 years) and he has said he thinks it's a great idea. Profits will be split 50/50 and the agreement is that if I walk out, I'm not entitled to anything in the bar. Little money lost if anything goes wrong and I can see what it's really like to run a bar and get some experience from it.

[The Big Mango]

^^ oh dear ,

15 years running the bar and does not have 150kthb saved .

Must be a popular and profitable bar don't you think ?

[impulse]

Change of plan.

One of my Thai friends who owns a bar in Koh Chang has told me I can buy into partnership with him for 150,000 baht (for refurbishment). He's been running the bar for 15 years but hasn't got that kind of money lying around to refurbish the bar and make the bar better at the moment so that may be why. He's also getting old and would prefer a bit of help running the bar.

I've spoken to my lawyer at AAA Legal Advisors (based in Bangkok and been running for 27 years) and he has said he thinks it's a great idea. Profits will be split 50/50 and the agreement is that if I walk out, I'm not entitled to anything in the bar. Little money lost if anything goes wrong and I can see what it's really like to run a bar and get some experience from it.

Great starter plan as long as you look at the $5,000 as tuition. Look at it as a bonus if you get it back.

Gotta wonder why a guy who's been in business for 15 years doesn't have $5K for what appears to be routine refurbishments.

Also, keep in mind that "running the bar" requires a significant deviation from the work permit laws, and any of his competitors can use that against you. Which they probably won't do unless it becomes a success. See the conundrum there?

[qwertymerk]

Change of plan.

One of my Thai friends who owns a bar in Koh Chang has told me I can buy into partnership with him for 150,000 baht (for refurbishment). He's been running the bar for 15 years but hasn't got that kind of money lying around to refurbish the bar and make the bar better at the moment so that may be why. He's also getting old and would prefer a bit of help running the bar.

I've spoken to my lawyer at AAA Legal Advisors (based in Bangkok and been running for 27 years) and he has said he thinks it's a great idea. Profits will be split 50/50 and the agreement is that if I walk out, I'm not entitled to anything in the bar. Little money lost if anything goes wrong and I can see what it's really like to run a bar and get some experience from it.

Great starter plan as long as you look at the $5,000 as tuition. Look at it as a bonus if you get it back.

Gotta wonder why a guy who's been in business for 15 years doesn't have $5K for what appears to be routine refurbishments.

Also, keep in mind that "running the bar" requires a significant deviation from the work permit laws, and any of his competitors can use that against you. Which they probably won't do unless it becomes a success. See the conundrum there?

I think it may be to pay off a bit of debt or give towards his family, I'm not exactly sure but I'll find out first. I think it's mainly down to the bar struggling at the moment and him losing money, because other bars in the area are a lot bigger and taking more of the islands customers.

Yeah the permit laws are something I'm gonna have to think of.

[The Big Mango]

OP can you not see how daft this is ???

Please tell me your not gonna give him the $$$ and think you'll be half owner of the bar .

[qwertymerk]

OP can you not see how daft this is ???

Please tell me your not gonna give him the $$$ and think you'll be half owner of the bar .

I think I'd be more daft to take advice from a random guy on a forum rather than a guy who's been a business lawyer in Thailand for the past 27 years. Of course he's not gonna sign me 50% of the bar, that's not what I expected.

Edited April 30, 2016 by qwertymerk

[impulse]

Yeah the permit laws are something I'm gonna have to think of.

Look at them more as an impediment than a brick wall. Nothing ventured, nothing gained.

If it was easy, you wouldn't have any customers. They'd all be drinking at their own bars.

[impulse]

Follow your dream buddy , and let me know when you take them rose tinted glasses off

If he can take his learning lumps for $5,000, he's $$ millions ahead of a lot of business geniuses people who've left Thailand Asia with their tails between their legs. And anything he learns running a bar in Thailand will serve him running a ___________ (fill in the blank) in Thailand.

I wish my Chinese learning lumps had only cost me $5,000.