BUYING YOUR BUSINESS:

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THE BAR:

As you will see many Realties in Thailand do not sell bars. The reasons are simple. Bars do not make money and those that do are sold via word of mouth just like the West & cost min 3 - 50m baht. "Thus why should Realties be blamed for something that does not work-- bars are it?

Many bars are run by Thai girlfriends whose money comes from retirees or boyfriends wanting to do something different. The old saying" I've always wanted to own a bar to tell the folks back home"- only trouble is many make nothing!!!!!! but relieve the pressure from their own countries to relax knowing they have a bar. Those who try can have a partnership but looking at any bars here; do not go on any bookkeeping as basically thats a complete waste of time. If a partnership, most of the income is under the table & if a company Ok then normally there is a work permit available and the books have had yearly audits but still many are underwritten. If you buy a business without a company then forget looking at the monthly take period. Most bars that do work are owned by expats who have lived here for years---they succeed as they know the whole environment and most GOOD bars sell by word of mouth not advertised. Some will even resort to loading up customers as a front eg. one place on the river we know that has since gone bust?? did this. Also rents can be high eg Loi Kroh 25-35,000 baht and Thapae Rd 40,000 baht a month.Moonmuang Rd 50,000 baht a month.  Add over double this and thats what you need just to cover your costs per month =100,000 baht a month at the least.

WHAT HAPPENS:

When a foreigner comes to Thailand they forget that they must have income over and above all the "slow period" which is April thru to November. Its not easy now when you think of say Pattaya with over 1200 bars and ChiangMai with around 700 plus bars & restaurants all competing for the same baht & the prices for beer, food & services increasing. If you have 500,000 baht then you can run a shoe box in a Bar centre with 50 others blaring out separate music for maybe 1 year before your money runs out or your brain dries up. You need twice this amount or even more just to survive the off season and the girlfriend?? To have a business in Thailand now you need money, real money? not just dreams

WHAT YOU ARE UP FOR: BARS & RESTAURANTS

1/. Cost of the business. This is usually key money and can vary. The key money will depend on the income this biz makes if any but usually covers the chattels and alterations AND WHAT THE SELLER THINKS HE IS WORTH. Normally just forget about the key  money ---try and think what it would cost you to do the place up from bare (scratch) and now you have the listed price.

2/. Signed contract with a lawyer preferably and not the other person's lawyer but once you pay a deposit you are committed unless the seller breaks the contract. This is binding so forget coming up with stories if other places around the vicinity say your buy makes nothing??? Remember if you have done your homework then theres no need to talk to others around town --anyway how would they know what skills and theme you are about to break into!!!

3/. Make sure the business belongs to the seller & check chattels etc & if the bills are paid.

4/. Leases in some areas are down to year by year which means if you make any money next year the lease could increase. In ChiangMai around the night bazaar some bars have month by month leases but 1 year leases are more common now and if youre lucky maybe a 3 x 3 year lease or even 5 year lease then youre doing well. Watch our for leases with 3 year contracts and some in Changklan Rd want 20,000 baht plus for shophouses empty and 6 months paid up front; 3 months deposit. In Nimmanhemin Rd a good shophouse near the Amari Rincome will be up to 50,000 baht per month & more and 3 year contracts. Remember Changklan Road floods every year and places to stay away from are night bazaar ground floors & Nong Hoi.

5/. You need a partnership if you have a Thai partner but remember if you need a work permit & you believe your business will work go for the Company and work permit. You have more protection than a limited partnership but its up to you as you know best.

6/. Licenses: The holder of the property (Thai) must hold the cigarette, liquour & food licenses in their name. Therefore the premises leased are in the name of a Thai or a Company. You can protect yourself with a contract written up by a law Office. ( Essential )

7/. Talk to the neighbours about flooding, power & water cuts & music or factories. If you have girls then expect to pay tea money to the local constabulary & don't sell viagra unless you hold a pharmaceutical license.

8/. Make sure power etc is paid up and bills clean & the power isn't being used by the neighbour.

9/. Most of all you need good luck? as in Chiangmai owning a bar is a lifestyle not a money making business but with the right PR and hospitality skills there have been success stories. It is entirely up to you.

10/. Once you are happy to buy then you will be asked to pay a deposit. This can be anywhere from 10-30% down. Read it carefully as after you sign there is no going back --you are committed. If either party defaults then the other receives the deposit but the terms of the agreement are plain. We are talking about a business now so don't try to ask for 1/2 back if you are at fault or say your mama is sick and needs urgent medical care. This is Thailand and a binding contract & you alone are the signee not your mama.

Good luck.

WHATS THE MOST IMPORTANT THING:

1/. Yes one would say location but no its management. If you are not running your business yourself be prepared to get ripped off. Management is the key to success in Thailand. Only those with charisma & a flare for the business they run, succeed and then thats hard work. If you have a good front person who speaks English, can interact with foreigners and government departments then you are half way home but this is hard to find especially someone whom you have little faith & trust in.

2/. Location is second. Good parking & lots of foot traffic are important and prime but rents can be as high as 50,000 baht a month or more. Justify your committment but formulate your biz plan.

3/. Your business: Theme: what do you want to do? will it make money? Decore: have you got the money to make your business comfortable & successful without over expenditure. Will you be able to afford the running costs in the low season and will you have enough money to survive.

4/. If you have an attitude problem then don't even start here. You need hospitality skills essential here & theme but watch out if you do good the landlord may increase the rent or even want to be a partner in your business. Even more so to find and buy land and building in the first place as rents increase after every term and you will kick yourself when you should have bought the building in the first place..

5/. Ability to service your never ending bills. Remember having a company you must pay monthly  taxes around 7500 baht a month, social welfare tax, withholding tax, accountant fees and other expenses plus but you are far safer than a partnership. Just to keep staff etc 50-70,000 baht per month

6/. Your girlfriend & if you have met in a bar then expect to look after her every day payments and those of her extended family including medical & tea payments. DO NOT have joint bank account.

7/. Never think for any reason coming to Thailand spending 1m baht on a bar and succeeding. Chances are you will last a year and not have any more customers than the previous owner.

8/. Analyse the business for your competition and check them out and whats happening in town as against 5 years previous. Everyone pads up a sale but its up to you and your skills. Remember we have seen success stories and yours could make the difference.

9/. Remember bars, restaurants and guest houses are 7 day events 30 hours a day??. If you want to work 7 days then OK but believe me after a year you will get a clear message in your brain: "why did I buy this"??????????????headache. We new a Kiwi couple who bought a Guesthouse: after one year they realized the rent was too high; all the staff ripped them off and guests stole their towels etc. They thought they could have it easy but ended up costing them and working 18 hours every day. Another UK friend had the same issue & he was glad to sell out as all the staff ripped him off.

10/. But done well and properly you can win eg Mikes Burgers are a total success. Money spent well.

RESTAURANTS & GUESTHOUSES:

1/. Yes we sell restaurants but if your'e interested you can only view books with the owners. We do not send over the Internet any more as have found this is a complete waste of time. If your'e serious then so are we so best come to Thailand and view and talk to us.

2/. Guesthouses run 7 days 18-24 hours a day so be prepared to work. They can however make good money depending on size, location, what they offer. If new you can get commissions from everything including treks, car, bike hire, cooking schools to adventure tours and site seeing but remember the season only runs for 4 months and the other 8 you will freeze..

3/. Most good restaurants have a company. This makes for a  viable and sound business but if in Chiangmai we can advise you. But you still must employ Thais and pay  taxes no matter what business you want to start..

4/. Normally the outgoing owner will have staff for the incoming owner. Be aware that good cooks require good wages and they will leave if approached by another restaurant. Basic salary for workers starts @4500 baht per month with cooks 7500-10,000 baht per month. Pay them a petence and they will leave without telling you. However watch the till as you are the one that they will watch--if not there how do you expect your business to succeed. It won't.

5/. Restaurants may be better buys then bars but one needs to have a flair for cooking, able to interact with customers & have hospitality skills. Without this do not even start unless youre not worried about paying out money & have money all year round.

6/. Recently a nice Restaurant changed hands for 2.5m baht fully loaded. The outgoing owner had a flair but the incoming owner had nothing. His wife is even worse and now they have instantly lost customers. The worse thing is when you raise the prices thinking you will recoup their loss ---a big mistake.If places have regulars then look after them??

7/. It pays to advertise and have what no others have right to the food, website, themes, specials etc. Too many places have dear beer for sale and outrageous food prices.. eg specials, free food, snacks etc

8/. If you need help we do offer excellent advise on what you should have when you buy a GH, restaurant or other business but not bars.

9/. We can assist you with Company setup cheaper than most and also put you on the right road. We charge for a company 27,000 baht but please make sure you have 7 shareholders before you start. Your Thai nominees will be interviewed and there bank accounts checked. We require an up front fee of 10,000 baht  ( balance on completion) and if you change your mind half way thru then you forfeit the deposit.

10/. As with 9 the same goes for accountancy work or lawyers.

OTHER BUSINESSES:

Good businesses that have a company are the way to go. Make sure they have audited books and use a lawyer to help. Ask us.

OUR ADVICE: 

2008: Buying into a Business in Thailand: If you want to work in Thailand then you need a work permit, Office & staff.  This means you need a Thai company. To set up you need to show 2m baht for share capital and have enough money for your business setup and 4 Thai employees ---- not nominees; wages, tax including VAT, Office, social welfare and withholding tax etc. Be aware this will cost around 1-1..5m baht the first year of business so buying into a new or existent business expecting a work permit take this into consideration on the asking price. Being a partner in a business with a work permit will cost min 3m baht if there is goodwill in the business and the books are sound. This includes 2m baht for the company change and 1m baht goodwill costs. For each work permit you must have 4 Thai employees on your books and they will be interviewed by the labour office so make sure you have proper workers not nominee workers given to you by a friend or the business that forms your company---it is you that will get the blame if you are caught.!

    If you have the money and plan worked out then buy the land  with a company & build or buy existing property and renovate. This way you eliminate any problems with landlords and you have full control of your business and land via a Thai Company. We will help those with excellent advice on locations to even obtaining the right manager for you if you use our services. Having your own property will also provide you with a better resale value should you decide to sell later or even lease and the fact you will sleep at night. We do assist all buyers of property and we have our own builders, architects and staff on hand to help you..