Analysis (2)

Staff matters, as told here before.

Although you are the "owner", you cannot work, because you have no work permit normally. Your wife/girlfriend has to act as "boss" in the bar. But, are you sure she can? Besides, sometimes you want to take a vacancy, travel around the country, see her parents etc. Who takes care when you both are away?

You need an old lady in the bar, called "mama-san". The mama-san should be the key person in the bar, taking care of all the ladies, customers, stock etc. If your lady happens to be not old enough, she cannot act as mama-san.

This was our big mistake: we had no mama-san. My wife was too young for routine work in bar, and all other ladies were very young, too. Nobody had adequate experience and this leads to anarchy. Sometimes the ladies just walked away, to the discotheques or with friends. Sometimes my own wife just made the same. Sometimes I was forced to sit in my bar together with few ladies and with no customers for hours. It's sad to tell now, but the initial mistake was made and there was no chance to improve the situation anymore.

Of course, we tried to hire a mama-san after a month or two after opening, but for this time the set of ladies was established already and a new person was not acceptable for anybody.

Analysis (1)

First of all, starting the bar business, you have to collaborate with local people. The money is coming from you, but in all the documents there appears another name, most usually, your Thai girlfriend's or your wife's. Futhermore, all the documents are in Thai, which means, you normally cannot read them.

For the beginning it seems OK for you, because you love your wife/girlfriend and you trust her. And obviously you think it will last forever. But there is no guarantee.

Your lady can cheat you, actually, in every minute. And so all other ladies working in the bar.

And here you can see your first mistake: too much trustfullness.

How to avoid this mistake?

When bying a bar or another business, let make the initial contract by a lawyer in English. Make sure that the contract is made for your name.

Don't worry about other paperwork: the licences, etc. This will not hurt you financically. Sure you have to pay for very many things after the initial payment, but this is just a small money for you.

If you can avoid the first mistake, you will be able to sell the bar anytime you like.

Yes I made the first mistake, but fortunately, the land lord (a Thai man) acknowledged my rights, mainly because I paid the rent to him, personally.

Sold

Yep, the bar is sold, at last.

It took only 6 weeks.

As a rule, the buyer is a Thai lady who is dreaming about bar business, but the money is coming from abroad, from her boyfriend/husband. In this case the money was coming from Japan.

Asked price was 500 thousand baht, but I was forced to make a discount, 50 thousand, because the buyer did not understand that she will be obliged to renew contract with the land lord in next January. It ment for her more 100 thousand. But, honestly, even 450 thousand was pretty good enough for me.

As told here before, I got the bar for 250 thousand plus the same contract fee, 100 thousand. Anyway, no win, no loose. Back to square No 1.

As promised, analysis will follow soon.

Finishing

Although the bar is now open, it's for sale. The main reason: separation between me and my wife, Lord. Yap, personal relations can affect business seriously sometimes.

It's not the best time for selling. High season is just coming; many friends are on their way, including visitors of this blog. Sorry about that, but there was almost no choice for me.

Right now the bar is running under the next bar's management.

The asking price is 550 thousand baht. For friends interesting in buying there are discounts available sure.

Conclusions and analysis will follow.

Ying

Though some of our ladies decided to take a short vacancy, the bar is closed for a couple of days at the moment. It seems to be good time to introduce our staff.



Ying is eighteen. She came from Nakhon Ratchasima district, or simply, from Korat, North-East region of Thailand, also known as Isan province.

Her family has rural background. Ying has one brother and one sister.

She is always in good mood, joking, smiling, and flirting.

Favorite drink: Bacardi Breezer Lemon.

English: very basic.

Statistics

Since June 2006 we have 1000 unique visitors in this blog. Where are you coming from?

Take a look: top 50!

1. Estonia-Tallinn
2. Thailand-Bangkok
3. United States-Chicago
4. Estonia-Tartu
5. Singapore-Singapore
6. France-Paris
7. Estonia-Peetri
8. Estonia-Pärnu
9. Australia-Ashfield
10. United Arab Emirates-Dubai
11. United States-Orlando
12. United States-Prince Frederick
13. United Kingdom-Foy
14. Estonia-Kohtla-Järve
15. Netherlands-Bergen Op Zoom
16. United States-San Jose
17. Hungary-Budapest
18. Australia-Perth
19. Estonia-Miiduranna
20. Estonia-Haapsalu
21. Australia-Melbourne
22. United States-Cincinnati
23. Estonia-Rakvere
24. Netherlands-Amsterdam
25. Netherlands-Rotterdam
26. Estonia-Nõmme
27. Ireland-Dublin
28. Finland-Helsinki
29. Belgium-Gent
30. United States-Churchville
31. Saudi Arabia-Riyadh
32. Russian Federation-Moscow
33. Estonia-Harkujärve
34. Estonia-Reiu
35. Malaysia-Selangor
36. Estonia-Kose
37. Finland-Kajaani
38. Germany-Hamburg
39. Japan-Tokyo
40. United States-Baltimore
41. Iceland-Reykjavík
42. Estonia-Ülenurme
43. Belgium-Lubbeek
44. United Kingdom-Lymm
45. United Kingdom-Milton Keynes
46. Hong Kong-Central District
47. Canada-Calgary
48. Estonia-Ämari
49. France-Clermont
50. United Kingdom-Staines

Cheating

It seems to be very easy. Just walk over a bar, ask phone number from a girl and call to her after she will finish the work. You will save the bar fine, correct?

No!

Think again, what are you doing?

You are cheating. Even worse, you are stealing something that not belongs to you, and the worst: the girl is stealing the same.

You can save some 300 baht, but you collect bad karma. Nobody wants to see you at this particular bar again. If the girl agrees, she will be lost her trustfullness for the owner. The worst case: she will be fired.

It was happened sometimes in our bar, but not very frequently. Of course, all the ladies in bar are free to go away anytime, but they don’t. If you met the girl in the bar, she cannot go with you even after the bar is closed.

It’s because the bar is their job and even more: their life. It’s a mix of loyalty, friendship, business, tradition etc. Thai people take care about each other. As long as the relations are good, you can trust them and they will trust you, too.

So, if a customer makes a proposal to cheat, it will be sometimes very difficult for the lady in bar. The most of the ladies just refuse.

- Why not take a seat, chat with ladies, have some drinks and fun?

If you’d like to save your money, go to Walking Street or Beach Road. There are always lots of freelancers waiting for you. No bar fine. But, if you are in the bar, you have to accept the rules.

Old jokes

If you are a bar owner, you find yourself in chatting with customers frequently. After „nice to see you” and „where are you from?” it seems there are no more topics.

That’s right in case of new customers sometimes, especially if the customer is not very much intended to talk with the owner rather than ladies in bar. But sometimes he wants to relax only and sometimes it seems he needs some sort of friendliness.

Old jokes would help.

Couple of weeks ago there were no customers in my bar neither in neighborhood. Suddenly a bunch of drunken farangs arrived to our bar. They ordered a lot of drinks, arguing, and then start fighting and then they run away, not paying for anything. Our ladies were running out to catch them. After ten minutes they arrived, satisfied. Thanks to police the bills were paid.

The next bar owner was watching the whole story. He had no customer for a long time at this particular night. I came to him and told:

“John, do you know the old joke: bad news and good news?”

“No, what it is?” replied John.

“The bad news,” I continued, “we have nothing to eat but shit.”

“Ok, but what about good news?”

“The good news is that we have shit a lot.”

That hits the spot!

If you have in your memory some old jokes for various situations, it may help you to make new friends, establish regular customers in your bar and much more.

Examples?

“What is better than beer?” – “Cold beer, indeed!”

“What is better than sex?” – “Group sex!”

The bottom line: what is better than customer? – A regular customer.

Birthday

It was my birthday in bar last Wednesday, not a big party, just some friends but lot of fun.















The staff is renewed again together with some new ladies. On the picture above there are only few of them. Right now we have seven ladies in bar, which seems to be a reasonable number.

The coup did not affect the business, everything is same as usual. Thai people don’t pay too much attention to these events.

Recalculations

As we considered:

We need to get at least 2000 baht in 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.

Is it reasonable? -- In the practice, no!

Ok, if you're just a customer going to your favorite bar every night in prime time, you may think that this is the permanent reality: lot of customers, lot of money etc. But this is an illusion. The truth is, that (1) not all the bars are favorable and (2) very long time there are no customers in any particular bar.

What it means? -- It means that you cannot sell another drink in every 20 minutes in your bar. Because, the most of the time you simply have no customers.

You have to make some corrections in your calculations.

The low season began in May and it lasts still now. During this period we actually had no profit. The balance was around zero.

Right now the high season will begin soon. Some of our regular customers are coming back and we have some new regular customers already.

In the bar business you need time. Nothing happens if you cannot wait. Anyway, this business is not for making big money in short time. Maybe it's not a real business but hobby or something like an art?

Yesterday

"...all my trouble seemed so far away..."

Indeed, it's not easy to run a bar sometimes, especially during the low season with heavy rains every day. There are very few customers in every bar. And, which is even worse, the ladies working in our bar tend to run away.

Yesterday, for example, we were forced to close the bar at midnight because all the ladies simply left. Lord was very angry and me too.

Fortunately, some new ladies will come soon and some of the previous staff is still loyal and coming back too.

So if you are planning to visit us in next couple of days, don't be surprised to see only few ladies or, for the regular customers, to find some new ones.

The bottom lines:

"And so hold on when there is nothing in you
Except the Will which says to them: "Hold on"."

Daytime activities

What are the bar ladies doing at daytime?

Obviously sleeping? Yes, but not always.
'
Nobody can stay active more than 24h, one might think. You can try to be happy and have fun permanently. I bet, you can't, but the ladies can.

A couple of days ago our staff took a day and visited Koh Larn, an island near Pattaya. As you can see, we had lot of fun.

Peoples

One of the advantages is learning. What do you know about Qatar? Probably nothing.

Believe it or not, this is a country and there are living some nice people. I met two men from Qatar in my bar yesterday.

Customers

Now you guess, which is the most important part in bar business?

Location? – Wrong!

Ladies? – Wrong!

Attitude? Music? Design? – Wrong, wrong, wrong!

The correct answer is: customers!

Because, everything is built up towards customers, indeed. Like in any business, the main goal is to make profit. And the only source of money is the customers.

It’s good to chat with customers sometimes. As an owner, you can make new friends; get some news, exchange good ideas etc. On the other hand, not very many customers are interested in chatting with strangers, despite their position. Anyway, getting new friends is a big advantage.

There are no good or bad customers in general. Even if something bad happens, it turns to good someway. Example?

One day some months ago a bunch of almost drunk young men came to our bar. Ordering many drinks, they started arguing, perhaps fighting about something and then suddenly were running away! Not paying for the drinks, of course. Our ladies were running to catch them. I was staying in bar alone. After some twenty minutes the ladies were coming back, very satisfied. Thanks to police, everything was solved and the bill was paid.

After a couple of minutes, two policemen were coming to our bar. Indeed, the same who helped us. What you think? -- Yes, you’re right! They enjoyed free drinks in our bar more than one hour. You bet, they could remember this particular bar for a long time after.

Human resource management

The staff is the most important, but also the most difficult part in bar business. In Thailand and in beer-bars, the staff almost always means ladies.

The location, design, music, lights or the cost of the drinks aren't usually arguments for the customer. Almost all customers are coming for the ladies and the ladies only.

But this doesn’t mean that the customers are only coming to take the lady away for the night; it means they are coming to chat, drink and play games with the ladies, and maybe, just maybe, decide to take a lady away for more intimate activities.

This also means that the success of the busyness largely depends on the ladies. They shouldn’t be too active towards customers, but neither should they be too quiet. They shouldn’t be too sexy, but neither should they be too casual. Focus on friendly atmosphere rather than hassle. Give time and space for the customers to have good time and make their own choice(s).

Yet another problem that could possibly arise is regarding loyalty. If the owners are too friendly with the staff, the ladies take it as a sign of weakness and run away; on the other hand if the bosses are too distanced, the ladies feel they are not cared for reasonably well and still run away. Maintaining the balance between distancing yourself from your staff while remaining close and friendly is the key in keeping your ladies together and happy.

Typically, every bar has a mama-san, an older and more experienced lady who takes care of the ladies and helps arrange things between a lady and a customer. The mama-san is the key person in such bars, since she helps maintain the balance between friendliness and distancing the owners – the mama-san takes care of the ladies, and the owner mainly interacts with the mama-san, making sure everything is working and everyone is happy.

Unfortunately, our bar has no mama-san. Why?

The thing is, when we started we had enough trouble trying to get any ladies to work in the bar in the first place; the idea of a mama-san was very distant and vague for us at the time. By the time things started to develop and we had a regular set of ladies working, it was too late to hire a new “boss”. The human relations had already developed by that time and a new boss was considered unacceptable.

Another thing that we learned was that it’s not good idea to have several ladies from same bar (or, god forbid, all of them) living together in same place. The rationale is simple – the ladies should work together, but not spend too much of their free time together to avoid too much bonding between them. If the ladies bond together too much (which is unavoidable in long-term, but still), when one of them wants to go work in a different bar, all of them would go and that would be a disaster. In short – every lady should live either alone or with other people, but not with ladies from same bar.

Location

There are three important issues in this kind of business: (1) location, (2) location and (3) location.

Location in the Walking Street area was the prime reason to buy. The dark side however includes the fact that the cluster of bars is not among the top ends in Walking Street area: poorly lighted, not too attractive for random customers. The whole cluster includes 6 beer bars, plus 2 bars besides the Walking Street itself. Our bar is located in the deep end of the area.

On the other hand, it is not a dead end. The pathway forwards to the Marine Plaza with a go-go bar, an open air seafood restaurant, hotels and Thai discothèques together with Thai food vendors, marketplaces and bars. These bars there are unfortunately oriented towards Arab people, which means extremely loud music.

The bars in neighborhood seem relatively friendly. However, we can feel a real competition sometimes.

Here is the situation:

Legal issues

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.

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.

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.

The bars

You can count the beer-bars in Pattaya almost one thousand altogether. Many of them are running with farang management, many with Thais. The ordinary staff includes a cashier, a mama-san and a bunch of bar-ladies. The customers usually sitting around the bar and the staff resides inside. Frequently a beer-bar has a pool table. We have one, too.

These bars are usually oriented to farang customers. I you are walking by these areas, you can never forget tens of exciting ladies shouting: “HELLO! WELCOME!” Every bar needs customers indeed.

The typical activities in such bars include consuming drinks, chatting with ladies, watching TV, playing innocent games etc. Additionally, you can ask some lady to go with you. None of the bar ladies are obligated to go with anybody. But yes, if the lady agrees, you have only pay the pay-bar and the lady will be free from the bar at this night. You may sit in the same bar together or go to another bar or to discotheque or to your hotel room, wherever.

Technically, this is not prostitution. Everybody can meet anybody and if they want to know each other more, so what? On the other hand, everybody knows that the ladies in bars are available for sex, too. This is highly tolerated in Thailand indeed, although the social status of bar ladies is not too much respectable.

Bottom line: the most important part in bar business is staff.

Beginning

This diary should be a story of a bar-business, as it is. But first at all, a short overview should come.

I am indeed in my mid-fifties. Born and living the most of my life in Estonia, Europe, if anybody knows that country. Have been married, having children etc. The last business was a bookseller-company, owned by myself and it was running quite well.

After several trips to Thailand, just arriving again, sitting in my favorite bar in Bangkok near Nana, I decided to stay here forever. I had no special relations in Estonia neither in Thailand. But I have been falling in love with this country, with this people, with this special attitude. I decided to fly back only for completing all my businesses, collect some financial resources and to arrive for the rest of my life.

I did not worry about finding friends or girlfriends here either; sooner or later I will undoubtedly find a good partner, I thought. Surprisingy, it happened in less than two weeks, when I met my dead Lord in Pattaya. Right now we are married and we have a baby named Lili.

The first and half year we were doing nothing. I mean, in terms of business. Indeed, there were some ideas, but we didn’t start anything actually. We had only plans, ideas and dreams a lot.

At last, the decision was made to buy a bar. The most suitable bar happens to be located near Walking Street, the always crowded and busy street in the town. The asked price was only 250 thousand baht.

Introduction

If you happen to be a male in your fifties and frequently visited Thailand, especially Pattaya or Phuket, you might be sitting in your favorite beer-bar, consuming drinks, chatting with ladies and thinking: why should I leave the Land of Smiles in next couple of days? Why not stay here, for rest of my life? And then, staring the sign on the next bar: „FOR SALE”, you realize, that exactly this will happen. Why not buy a bar, sit in your own bar, consuming drinks, chatting with ladies – and not pay for anything, on the contrary, your friends visiting your bar, paying to YOU. What a great idea, isn’t it?

For me, personally, it seemed to be the most stupid idea in the world, demonstrating only total lack of fantasy, and creativeness, and …

And so I am running a beer-bar in Pattaya.