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.