If you want to buy a bar or whatever business in Thailand, you have to take several specific issues into account.
First of all, you cannot work without a work permit. Secondly, if you are not able to neither speak nor read in Thai, you need a local partner.
Typical business for farang involves two persons: the farang himself and his wife/girlfriend. Furthermore, officially all the business has to be made on his spouse’s name.
So we did. For me personally the guarantee was our marriage. If you are not married with your business partner, the risk is much higher indeed.
Buying (handling the key money) involved a correct document made by the seller and approved by the land lord.
The next act was registering our business at local authorities in Banglamung. Required licenses include license for selling alcohol etc. They asked even for insurances for all the staff, but somehow we could ignore that. The paperwork took some month or so. The last license came after four months from starting. The total sum of fees exceeded up to 20 thousand baht.
As mentioned above, all the documents were in Thai and the authorities spoke only Thai.
All the licenses are valid for one year. It means we will renew these again and again.
Actually we started without any licenses. This is Thailand and here is nothing to worry about too much.
Monday, July 17, 2006
Tuesday, July 11, 2006
Opening
Our bar was empty of any staff. The first challenge was to hire ladies to work. What the problem, I thought. Pattaya is full of beautiful girls looking only for a job in bars. But no. Looking around more, we discovered that almost every bar has an ad in Thai: STAFF WANTED.
Ok, why not look around the Beach Road. Long sea side of this road has always a line of ladies waiting for a job in any bar, seemingly. But no, again. They are not looking for a job, on the contrary, they actually had left from their bar jobs. They are freelancers.
Actually we had a lady, a good friend of Lord, coming from the same countryside near Korat. Namely, Kai. So we started with a single lady in the bar. Lord was acting as a cashier, which left me with “general management”.
The first night - and we had a customer! A middle-age Finnish-Swedish. He was sitting in the bar, chatting with Kai and drinking a lot. At last, it was around 4 a.m. we considering about closing. But our dear customer refused to pay the bill. It seemed he was too drunk to understand where he is or what is happening around him.
We called to the police, watched the customer and waited. After an hour the policeman came. The man opened his wallet, paid the bill and walked away.
Two days later he came back with a huge bunch of roses. Completely sober, ordering only Coca-cola for himself and drinks for Kai. He becomes to be our first regular customer.
Ok, why not look around the Beach Road. Long sea side of this road has always a line of ladies waiting for a job in any bar, seemingly. But no, again. They are not looking for a job, on the contrary, they actually had left from their bar jobs. They are freelancers.
Actually we had a lady, a good friend of Lord, coming from the same countryside near Korat. Namely, Kai. So we started with a single lady in the bar. Lord was acting as a cashier, which left me with “general management”.
The first night - and we had a customer! A middle-age Finnish-Swedish. He was sitting in the bar, chatting with Kai and drinking a lot. At last, it was around 4 a.m. we considering about closing. But our dear customer refused to pay the bill. It seemed he was too drunk to understand where he is or what is happening around him.
We called to the police, watched the customer and waited. After an hour the policeman came. The man opened his wallet, paid the bill and walked away.
Two days later he came back with a huge bunch of roses. Completely sober, ordering only Coca-cola for himself and drinks for Kai. He becomes to be our first regular customer.
Sunday, July 02, 2006
Calculations
This initial investment 250 thousand is called “key money” in Thailand. Actually, this means you rent the bar from the land lord, but you buy the right to rent (and run) the bar from the previous owner. Naturally, you can sell it the same way.
Comparing with the same type of bars around us we discovered that the asked price was quite good. The seller was a Thai lady who had been running the bar for some six months. As she told, the key money for her was 400 thousand. Why did she want to sell the bar? Apparently, she was a little bit disappointed about this business, maybe she needed money, who knows. Bar owners in the neighborhood told me, that the lady was just too lazy, nothing else.
The monthly rent was set on 20 thousand baht and there was an additional charge for one year contract, 100 thousand.
Additionally, we should pay almost 20 thousand every year for various licences.
It means, for the first year running we will pay 610 thousand altogether. Ok, if we consider that we can get the key money back if selling the bar in the future, the initial investment is 360 thousand.
The regular expenses include salary for the staff. If we have six ladies and a cashier in work every day, we have to pay for each people 3000 baht every month. This is the normal salary in beer bars. It means 252 thousand in a year.
Electricity costs some 2000 baht per month, thus roughly 24’000 baht a year.
Together with the initial payments it makes 636 thousand. Adding unseen expenses, various improvements etc, we can see something around 700…800 thousand baht expenses for one year i. g. 60 thousand for every month approximately.
The profit from selling one beer is around 40 baht.In case of liquors the profit may be a little higher, but most of the customers prefer beer.
If we want to get 800 thousand in one year, we need to get at least 2000 every single day. We can get this amount if we sell 50 beers every day. The bar is open from 5 p.m. until 3 a.m., 10 hours. It means the customers should order minimum of 5 drinks in every hour. It seems to be very reasonable, isn’t it?
Theoretically, yes, but what about practice? Let’s see.
Comparing with the same type of bars around us we discovered that the asked price was quite good. The seller was a Thai lady who had been running the bar for some six months. As she told, the key money for her was 400 thousand. Why did she want to sell the bar? Apparently, she was a little bit disappointed about this business, maybe she needed money, who knows. Bar owners in the neighborhood told me, that the lady was just too lazy, nothing else.
The monthly rent was set on 20 thousand baht and there was an additional charge for one year contract, 100 thousand.
Additionally, we should pay almost 20 thousand every year for various licences.
It means, for the first year running we will pay 610 thousand altogether. Ok, if we consider that we can get the key money back if selling the bar in the future, the initial investment is 360 thousand.
The regular expenses include salary for the staff. If we have six ladies and a cashier in work every day, we have to pay for each people 3000 baht every month. This is the normal salary in beer bars. It means 252 thousand in a year.
Electricity costs some 2000 baht per month, thus roughly 24’000 baht a year.
Together with the initial payments it makes 636 thousand. Adding unseen expenses, various improvements etc, we can see something around 700…800 thousand baht expenses for one year i. g. 60 thousand for every month approximately.
The profit from selling one beer is around 40 baht.In case of liquors the profit may be a little higher, but most of the customers prefer beer.
If we want to get 800 thousand in one year, we need to get at least 2000 every single day. We can get this amount if we sell 50 beers every day. The bar is open from 5 p.m. until 3 a.m., 10 hours. It means the customers should order minimum of 5 drinks in every hour. It seems to be very reasonable, isn’t it?
Theoretically, yes, but what about practice? Let’s see.
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