Patong - The Wake

[Destiny1990]

5 hours ago, xylophone said:

The fat profits, if there are any, are usually made by the wealthy landowners here who have built on the land that they either inherited or bought with their family wealth, and they make their money from the fact that there are so many everyday Thais who want to own/run a business that they willingly enter into lease agreements with these people, only to find that things don't work out for them, but also that they lose their original deposit/lease money.

 

This is very obvious in a Soi like Soi Freedom (bars, I know) where the bars are leased from the owner on a three or nine year lease and when the bar fails, the lessee has to just walk away. I have also seen this in small shops and shophouses in various parts of Patong, where the lessee just has to walk away because business is bad.

 

The landlords of these places don't really care if these shops/bars/whatever go bust, because they have had the lease money paid upfront, in fact they would rather this happened because they can then re-lease the place to some other hopeful. 

 

And it is these hopefuls that I have often posted about, because there are so many of the lower socio-economic Thais who would love to own their "own business" and are drawn to these small lease type businesses. 

 

Just to keep the balance, and I have mentioned this before, so many Thais go into these small businesses with absolutely no idea of how to make it work, or indeed never investigate why the previous business failed, so one cannot blame the landlord for that.

 

I personally know of 12 such businesses, and have seen many, many more go this way and I feel so sorry for these folk, but then again, very often they are the architects of their own demise, and the landlords just happily keep collecting upfront lease payments and so the vicious cycle goes on.

Thais with an 7/11 in Patong usually make good income especially if they own the building. Most building owners in Patong will likely make good returns one way or another so yes not everyone is loosing money.

But yeah renting an pricey place for another small restaurant or hair salon or bar  in a smaller soi will likely to go tits up.

 On a positive note Thais are very expert in avoiding costs so with that skill they can substain years longer before having  to close down.

farangs usually faster accept their loss and  walk away. Farangs also have higher costs such as staff,visa ,work permits, accommodations etc.

[Richard Kuklinski]

8 hours ago, AJBangkok said:

It’s not that Thai’s prefer new, it’s the system that forces them to buy new. When you buy a new apartment the developer gives you 2 plus years to pay the 10% down payment. They normally have a deal with banks to provide a 90% mortgage which the buyer benefits from. 

When you buy second hand the maximum mortgage you can get is 50 to 60% and most Thais don’t have 40% or 50% cash so their options are limited.

Thus my words, Thai's prefer to buy new. 

[Richard Kuklinski]

3 hours ago, Destiny1990 said:

Thais with an 7/11 in Patong usually make good income especially if they own the building. Most building owners in Patong will likely make good returns one way or another so yes not everyone is loosing money.

But yeah renting an pricey place for another small restaurant or hair salon or bar  in a smaller soi will likely to go tits up.

 On a positive note Thais are very expert in avoiding costs so with that skill they can substain years longer before having  to close down.

farangs usually faster accept their loss and  walk away. Farangs also have higher costs such as staff,visa ,work permits, accommodations etc.

The Thai's may be expert at avoiding costs, but that comes at a price, and it's called "products and service."  

[Richard Kuklinski]

Also, wealthy Thai's, using 300 baht a day Thai labor, in a major western tourist destination.  Cha-Ching. 

[Destiny1990]

24 minutes ago, Richard Kuklinski said:

The Thai's may be expert at avoiding costs, but that comes at a price, and it's called "products and service."  

I satisfied with the majority of Thais their products and services and prices. Their weak point remains their lack of English but most Thais i find skilled in their specialism.

If its some farang owned establishment its often simular service but for a higher price.

[ChasingTheSun]

1 hour ago, Richard Kuklinski said:

Also, wealthy Thai's, using 300 baht a day Thai labor, in a major western tourist destination.  Cha-Ching. 

 

A large amount of the “unskilled”(restaurant staff, labourers) workers in Phuket appears to be from Myanmar. 

 

Out of curiosity, I wonder what percentage of Myanmar workers have legal work permits in Phuket?

 

Does anyone know if the same minimum wage applies to Myanmar people on work permits vs minimum wages for Thais?

[Olmate]

10 hours ago, ChasingTheSun said:

 

A large amount of the “unskilled”(restaurant staff, labourers) workers in Phuket appears to be from Myanmar. 

 

Out of curiosity, I wonder what percentage of Myanmar workers have legal work permits in Phuket?

 

Does anyone know if the same minimum wage applies to Myanmar people on work permits vs minimum wages for Thais?

Don’t think unskilled is correct, willing to work these jobs yes. Majority here legally I would suggest on agreed wage,accomodation arrangements.

[xylophone]

3 hours ago, Olmate said:

Don’t think unskilled is correct, willing to work these jobs yes. Majority here legally I would suggest on agreed wage,accomodation arrangements.

My experience here is that those that do come from my Myanmar are not paid any more than a very basic 300 baht a day, and sometimes not that, however they are prepared to work for that sort of money, so that's their decision.

 

From my perspective I do believe that some business owners here take advantage of the fact they will work for a lot less/are desperate for the money, and many of them do work in the hospitality/restaurant business.

[xylophone]

19 hours ago, Destiny1990 said:

Thais with an 7/11 in Patong usually make good income especially if they own the building. Most building owners in Patong will likely make good returns one way or another so yes not everyone is loosing money.

But yeah renting an pricey place for another small restaurant or hair salon or bar  in a smaller soi will likely to go tits up.

 On a positive note Thais are very expert in avoiding costs so with that skill they can substain years longer before having  to close down.

farangs usually faster accept their loss and  walk away. Farangs also have higher costs such as staff,visa ,work permits, accommodations etc.

If they do own the building, then they can make money, but as I have mentioned previously the majority of them don't and those who do would have to be classed in the fairly wealthy bracket and that's not the demographic I'm posting about.

 

Indeed two Mini Marts have closed near me in recent times and IMO that is because they have been in the wrong location and far too close to other similar stores, which seems to be a Thai trait!

 

Of the 12 businesses I mentioned that have closed, nine have been Thai owned and thinking about it yesterday, there are a few more that have closed that I know about, but didn't remember when posting.

 

Lack of experience, lack of planning, lack of knowledge and lack of any business sense whatsoever appear in a lot of those places that have closed and I will give you a few examples: –

 

– A lady (and her friend) I know wanted to open a small restaurant/takeaway food place in a track leading up to an elephant camp and nearby there were just a few workers huts....... absolutely no passing traffic, so I asked her where the customers were going to come from and the answer was, "if we cook good food then they will come". So I asked again where will they come from and she repeated the same thing time and time again. It opened and closed within two months because there were no customers.

 

– A bar girl I know managed to get a farang sponsor and she opened a "beauty salon" (more like a hairdressing salon) when she had absolutely no idea of how to run one and anyway it too was off the beaten track and it closed due to lack of business.

 

– A Thai restaurant in a side street closed and a lady who worked in a massage parlour nearby decided to approach her family so that they would donate money as a group to open it up again, which they did, and it closed (again) within five months through lack of business.

 

– A lady I knew through a friend worked in her sister's hairdressing salon and one day asked if I would lend her 5000 baht to help her sister pay the rent. I pretty well knew that I wouldn't get it back and it was not a loan, more that I was giving it to her, but I thought she was a rather lovely girl and deserved a break, so I willingly gave it to her and said not to hurry to pay it back. Well the business went bust within two months and they moved out of Patong.

 

– Caught up with a friend of a friend about a year ago and she said that she had found a sponsor and opened a beauty salon and she told me where it was, so I said I would come along to get my hair cut. Didn't go for quite a few months, then decided to call in and it was closed due to lack of business according to the new owner.

 

– The former wife of a guy I know opened up a bar with her new partner and I noticed that bar has now closed, and according to friends, she had no idea how to run the place and basically ended up owing quite a bit of money, hence the reason the bar has closed.

 

– A farang friend owned a bar with his Thai girlfriend and was shocked to find that the landlord wanted to close the bar down because the rent had not been paid for a few months, which was news to the farang because he left all of that handling of the money with his girlfriend, only to find that she had been spiriting the money away. She had no idea about handling the finances of this little "business" and thought that dipping into the till as and when, would be okay, but it is now closed.

 

And I could list quite a few more instances and they all have one thing in common – – – that Thais might dream of owning a business, but they have absolutely no idea how to run one and as if to back that up, just yesterday I was talking to a lady I have known for a few years, who currently works in Jungceylon and we were chatting about one thing and another, and she said that eventually she hoped to get married and that she would then open a fashion shop business. I asked her what experience she had in doing such a thing, and the answer was, in a nutshell – – zilch!

 

It is these Thai "dreamers" who often keep the landlords in funds, but having said that, some farangs aren't much better and I would suggest that the number of farangs who currently "run/own' bars here would be way down on the good old days back in early to mid 2000!

 

 

[Destiny1990]

11 hours ago, xylophone said:

If they do own the building, then they can make money, but as I have mentioned previously the majority of them don't and those who do would have to be classed in the fairly wealthy bracket and that's not the demographic I'm posting about.

 

Indeed two Mini Marts have closed near me in recent times and IMO that is because they have been in the wrong location and far too close to other similar stores, which seems to be a Thai trait!

 

Of the 12 businesses I mentioned that have closed, nine have been Thai owned and thinking about it yesterday, there are a few more that have closed that I know about, but didn't remember when posting.

 

Lack of experience, lack of planning, lack of knowledge and lack of any business sense whatsoever appear in a lot of those places that have closed and I will give you a few examples: –

 

– A lady (and her friend) I know wanted to open a small restaurant/takeaway food place in a track leading up to an elephant camp and nearby there were just a few workers huts....... absolutely no passing traffic, so I asked her where the customers were going to come from and the answer was, "if we cook good food then they will come". So I asked again where will they come from and she repeated the same thing time and time again. It opened and closed within two months because there were no customers.

 

– A bar girl I know managed to get a farang sponsor and she opened a "beauty salon" (more like a hairdressing salon) when she had absolutely no idea of how to run one and anyway it too was off the beaten track and it closed due to lack of business.

 

– A Thai restaurant in a side street closed and a lady who worked in a massage parlour nearby decided to approach her family so that they would donate money as a group to open it up again, which they did, and it closed (again) within five months through lack of business.

 

– A lady I knew through a friend worked in her sister's hairdressing salon and one day asked if I would lend her 5000 baht to help her sister pay the rent. I pretty well knew that I wouldn't get it back and it was not a loan, more that I was giving it to her, but I thought she was a rather lovely girl and deserved a break, so I willingly gave it to her and said not to hurry to pay it back. Well the business went bust within two months and they moved out of Patong.

 

– Caught up with a friend of a friend about a year ago and she said that she had found a sponsor and opened a beauty salon and she told me where it was, so I said I would come along to get my hair cut. Didn't go for quite a few months, then decided to call in and it was closed due to lack of business according to the new owner.

 

– The former wife of a guy I know opened up a bar with her new partner and I noticed that bar has now closed, and according to friends, she had no idea how to run the place and basically ended up owing quite a bit of money, hence the reason the bar has closed.

 

– A farang friend owned a bar with his Thai girlfriend and was shocked to find that the landlord wanted to close the bar down because the rent had not been paid for a few months, which was news to the farang because he left all of that handling of the money with his girlfriend, only to find that she had been spiriting the money away. She had no idea about handling the finances of this little "business" and thought that dipping into the till as and when, would be okay, but it is now closed.

 

And I could list quite a few more instances and they all have one thing in common – – – that Thais might dream of owning a business, but they have absolutely no idea how to run one and as if to back that up, just yesterday I was talking to a lady I have known for a few years, who currently works in Jungceylon and we were chatting about one thing and another, and she said that eventually she hoped to get married and that she would then open a fashion shop business. I asked her what experience she had in doing such a thing, and the answer was, in a nutshell – – zilch!

 

It is these Thai "dreamers" who often keep the landlords in funds, but having said that, some farangs aren't much better and I would suggest that the number of farangs who currently "run/own' bars here would be way down on the good old days back in early to mid 2000!

 

 

Sure but these shop owners as u say with a lack of planning, lack of experience, lack of common business sense, Lack of knowledge etc those folks will fail with their company everywhere in the world its certainly not limited to Patong.

 

[Lashay]

2 hours ago, Destiny1990 said:

Sure but these shop owners as u say with a lack of planning, lack of experience, lack of common business sense, Lack of knowledge etc those folks will fail with their company everywhere in the world its certainly not limited to Patong.

 

Main difference here is generally cost of entry is small (even smaller when someone else's money, aka the sponsers) This allows lot of people who have no business starting business a chance to "live the dream"

 

14 hours ago, xylophone said:

I would suggest that the number of farangs who currently "run/own' bars here would be way down on the good old days back in early to mid 2000!

 

 

When i first came vast majority of bar owners were farang (especially Bangla), and even if they seemed to be thai there was a farang boyfriend/sponsor behind the scenes. These days its less than 30%.

[Forest75]

Xylophone, enjoy reading your posts, thanks for taking the time.

From a business gold mine I have seen its the 7/11 on nanai  road opposite p bar... always steady stream of customers, although the woman in charge not so nice, have to watch your change/ note you have given her apparently.. 

 

[xylophone]

11 hours ago, Destiny1990 said:

Sure but these shop owners as u say with a lack of planning, lack of experience, lack of common business sense, Lack of knowledge etc those folks will fail with their company everywhere in the world its certainly not limited to Patong.

 

What you say is true, however firstly we are talking about Patong, and secondly nowhere have I ever seen as many small businesses start and go bust within such a confined area, anywhere in the world I have lived and worked.

 

And as Lashay has pointed out, the cost of entry to start such a business is low so the dream of owning a business is only a few thousand baht away for many, however it ends up being a broken dream, and if the money has been borrowed, it can have far-reaching financial consequences.

[xylophone]

7 hours ago, Forest75 said:

Xylophone, enjoy reading your posts, thanks for taking the time.

From a business gold mine I have seen its the 7/11 on nanai  road opposite p bar... always steady stream of customers, although the woman in charge not so nice, have to watch your change/ note you have given her apparently.. 

 

Thank you for your feedback Forest75, much appreciated.

 

I know the 7/11 you mentioned and indeed it is a busy shop so the owners are probably making good money there, as indeed do others who own similar franchises, but here's the key – – in well-positioned areas/streets with easy access, good parking and a fair amount of foot and road traffic, and without another similar franchise operating next door!

 

That is one thing that I have never been able to understand here, where you would get several of these "minimarket" type stores open up within metres of one another? It was the same with pharmacies a while back when the new middle road was being populated and I counted something like five pharmacies in 100 m stretch of road – – why?

[Olmate]

1 hour ago, xylophone said:

Thank you for your feedback Forest75, much appreciated.

 

I know the 7/11 you mentioned and indeed it is a busy shop so the owners are probably making good money there, as indeed do others who own similar franchises, but here's the key – – in well-positioned areas/streets with easy access, good parking and a fair amount of foot and road traffic, and without another similar franchise operating next door!

 

That is one thing that I have never been able to understand here, where you would get several of these "minimarket" type stores open up within metres of one another? It was the same with pharmacies a while back when the new middle road was being populated and I counted something like five pharmacies in 100 m stretch of road – – why?

Agree, I’m nearby, I think 3  pharmacies there have changed hands in the last 2 months! Chinese love them for some reason and prices are good if you know the price beforehand. The lady owner of one I used became quite ill, had to sell.

[Richard Kuklinski]

On 3/21/2019 at 11:51 PM, Destiny1990 said:

I satisfied with the majority of Thais their products and services and prices. Their weak point remains their lack of English but most Thais i find skilled in their specialism.

If its some farang owned establishment its often simular service but for a higher price.

That may be true of simple Thai establishments, but I refer to Thai run establishments catering for foreigners?  

 

They know the product and level of service foreigners expect for the money they are paying, but they cut corners to save every baht and it effects their business.

 

Nothing really to do with the level of English of the staff.   

[Olmate]

30 minutes ago, Richard Kuklinski said:

That may be true of simple Thai establishments, but I refer to Thai run establishments catering for foreigners?  

 

They know the product and level of service foreigners expect for the money they are paying, but they cut corners to save every baht and it effects their business.

 

Nothing really to do with the level of English of the staff.   

Such as? Can’t think of a business catering to farang exclusively that fits with that scenario. High end retail, resorts, spa?

[Destiny1990]

41 minutes ago, Richard Kuklinski said:

That may be true of simple Thai establishments, but I refer to Thai run establishments catering for foreigners?  

 

They know the product and level of service foreigners expect for the money they are paying, but they cut corners to save every baht and it effects their business.

 

Nothing really to do with the level of English of the staff.   

I leave the business establishments to the thais and indians in Patong and enjoy my freetime being a consumer.

 

[DrDave]

On 3/23/2019 at 12:22 AM, xylophone said:

Thank you for your feedback Forest75, much appreciated.

 

I know the 7/11 you mentioned and indeed it is a busy shop so the owners are probably making good money there, as indeed do others who own similar franchises, but here's the key – – in well-positioned areas/streets with easy access, good parking and a fair amount of foot and road traffic, and without another similar franchise operating next door!

 

That is one thing that I have never been able to understand here, where you would get several of these "minimarket" type stores open up within metres of one another? It was the same with pharmacies a while back when the new middle road was being populated and I counted something like five pharmacies in 100 m stretch of road – – why?

The reason you see 7-11s so close to each other is the parent company, CP All, recognizes that they can make a slight bump to their total revenue in the area. Unfortunately, this comes at the expense of the franchisees. When another 7-11 opens 100 meters from an existing store, the existing store will most certainly see a significant decline in revenue. But in total, across the 2 stores, there's a slight increase. From the research I did on 7-11 and CP All a few years ago, it appeared that the franchisees were being played for suckers. It seemed that the franchising program was setup to make the franchisees more like employees who were funding CP to expand their business.

 

Some of the 7-11s may be good earners for their franchisees, but I suspect the majority are not. Going back a few years, there was a TVF member who operated a business that involved buying shophouses and renting them out exclusively to 7-11 and Family Mart. Apparently, it was fairly profitable.

[phuketrichard]

Quote

Going back a few years, there was a TVF member who operated a business that involved buying shophouses and renting them out exclusively to 7-11 and Family Mart

Are u sure about that?I have been under the impression before they will grant you a 7/11 franchise you must own the land/building as a thai friend of mine that had a 30 year lease on land in Kamala on the main road was unable to gain the franchise cause they told him he did not own the land,

This is before there were any 7/11's in Kamala

 

Every thai figures that if shop A does 100,000 baht/business/month and he opens the same shop he will also make the same

They dont look at it as they each will split the the total ( give or a take a bit)

 

Recall decades ago all the photo shops on the island?

[Lashay]

2 hours ago, phuketrichard said:

Are u sure about that?I have been under the impression before they will grant you a 7/11 franchise you must own the land/building

7/11's and FMs on Bangla most definatly don't own the land they are on.

 

Same with ones in jungceylon and other shopping malls

[Joe Mcseismic]

Just now, Lashay said:

7/11's and FMs on Bangla most definatly don't own the land they are on.

 

Same with ones in jungceylon and other shopping malls

I've heard that the only stipulation is that the owner must have a degree from a Thai university.

[madmitch]

18 hours ago, phuketrichard said:

Are u sure about that?I have been under the impression before they will grant you a 7/11 franchise you must own the land/building as a thai friend of mine that had a 30 year lease on land in Kamala on the main road was unable to gain the franchise cause they told him he did not own the land, 

This is before there were any 7/11's in Kamala

Certainly not near me, where the land is owned by Kata Temple. In fact they can't have more than six years remaining on the contract as that's roughly when the land reverts to the temple from those with the master lease.

 

 

The below quote seems spot on and that's why you see a whole section of fruit sellers, all selling exactly the same product, next to each other on Thai highways. I have spotted this phenomenon in other developing countries as well, in fact I fist noticed it in Latin America, so it's not exclusive to Thailand

 

18 hours ago, phuketrichard said:

Every thai figures that if shop A does 100,000 baht/business/month and he opens the same shop he will also make the same

They dont look at it as they each will split the the total ( give or a take a bit)

[Joe Mcseismic]

2 hours ago, madmitch said:

Certainly not near me, where the land is owned by Kata Temple. In fact they can't have more than six years remaining on the contract as that's roughly when the land reverts to the temple from those with the master lease.

 

 

The below quote seems spot on and that's why you see a whole section of fruit sellers, all selling exactly the same product, next to each other on Thai highways. I have spotted this phenomenon in other developing countries as well, in fact I fist noticed it in Latin America, so it's not exclusive to Thailand

 

All sounds logical, but........

This is called clustering and is actually beneficial for all the business owners.

If there are a bunch of businesses all selling roughly the same thing, then those wanting to buy that thing will go there instead of somewhere where there is only a single shop. Not only does this provide the buyer with more choice, but, it also attracts more buyers to that area. It may well be that the total number of customers exceeds the total if all businesses were spread out.

That's the clustering theory anyway.

 

In the case of convenience stores, I don't think it works, but, it certainly works for bars and restaurants.

[Richard Kuklinski]

On 3/26/2019 at 12:07 AM, Olmate said:

Such as? Can’t think of a business catering to farang exclusively that fits with that scenario. High end retail, resorts, spa?

What about a simple sports bar for foreigners? 

 

Ever seen one of them run successfully by a Thai?  

[hansgruber]

10 hours ago, Richard Kuklinski said:

What about a simple sports bar for foreigners? 

 

Ever seen one of them run successfully by a Thai?  

All bars in Thailand need a face of the bar. Someone who knows your name, has a personality and drinks with his/her customers. 

 

This is what makes a successful bar in Thailand. 

 

[Olmate]

3 hours ago, hansgruber said:

All bars in Thailand need a face of the bar. Someone who knows your name, has a personality and drinks with his/her customers. 

 

This is what makes a successful bar in Thailand. 

 

Yes, and one where staff remember what you drink is a real bonus!

[Olmate]

14 hours ago, Richard Kuklinski said:

What about a simple sports bar for foreigners? 

 

Ever seen one of them run successfully by a Thai?  

Good point, think that’s part of the reason Oz bars work is love of sport!

[xylophone]

HELP!!!

 

Know this is not the right forum but getting very frustrated looking for the answer to my problem here..........tried to contact Merijn but he doesn't appear anywhere, then tried to locate a message I sent to him a while ago, but my messages cease after page 2 ?????, then tried the search feature but no go. 

 

So, can I get my old passport details changed into my new passport at Patong Immigration, or is a trip to Phuket Immigration necessary???

 

Why the hell does this new format make things so difficult and why do my post and message numbers stop after 2 pages???????????

 

Grrrrrrrrrrr..........

[schlog]

12 minutes ago, xylophone said:

 

So, can I get my old passport details changed into my new passport at Patong Immigration, or is a trip to Phuket Immigration necessary???

 

 

Have no answer to your question xylo. I always kept new and old passport and took both for travel till the immi guys at the airport did the job. So there was no need to go to immigration in town or patong.