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Buying a Beer-Bar?
This feature might make you think again.
The facts below may be hard to accept and it is fair to say that the
majority of the star-struck potential bar owners will totally ignore
everything here, to the detriment of their financial and mental state.
However, here goes:
Firstly there are a few facts that must be born in mind:
1. You can’t buy a Beer bar, at best it can be leased for a period of about
three years.
2. You will have to pay, in most cases, a large sum for key money depending
on the location, the size and the greed of the owner or agent. Thereafter
you will be required to pay a monthly (ground) rent which, depending upon
your contract (for want of a better word) will be revised upward, normally
every year.
3. At the end of your term of lease if you are lucky, an option to renew
will be offered, the key money will be dependant upon the length of the
option and on whether you have built up a good business or not. There is
also the possibility that the owner might want you out—in that case the key
money might well double or even treble and so could the monthly ground rent.
The chances are that your bar will need re-furbishing from top to bottom
and, whilst the fixtures and fittings may remain your property in law, the
owner can always find a flaw in the contract to lay claim to these.
You should also bear in mind that if you do anything through an agent, you
will be paying between 20% - 30% over the odds, this includes leasing bars.
It would be worth doing a costing exercise to establish just how many
bottles of beer have to be sold every day to cover your overheads. Remember,
this is not to make you a profit—just covering your costs. Here is a list of
monthly overheads you will be faced with in addition to your key-money and
monthly rent. Salaries, water (tap & bottle) electricity, telephone,
maintenance, (not to be sneezed at) food & television.
| Here is an example of accounting: |
| |
|
Monthly |
| Average key money for 3 years |
800,000 |
22,222 |
| Average Ground Rent |
15,000 |
| Electricity (no girls living in) |
2,000 |
| Water (no girls living in) |
660 |
| Telephone (personal use only) |
350 |
| Television |
350 |
| Salaries (Based on 5 girls at |
| Baht 1,800 per month each) |
9,000 |
| Mamasan |
|
9,000 |
| Depreciation: Based on an average |
| spending of 100,000 with selling price of |
1,400 |
|
| 40% of the cost new after 3 years |
| |
Total |
59,982 |
Explanation:
If your Thai girlfriend or Thai wife has never run a bar before, it does not
count that she might have worked in a bar all of her working life, she will
not be able to run one now. The running of your bar will be totally in the
hands of your Mamasan.
Fact: You are not allowed to work in your own bar or anywhere else for that
matter, at least not without a work permit and you stand more chance of
being struck by lightning than getting one of those in the beer bar
business. Even sitting talking to a customer can, and has, been classed as
working and as such is liable to a fine of between 20,000 and 100,000. A
second offence and you will be packed off to your country of origin never to
return, wife or no wife, family or no family, business or no business. This
after a spell in the Monkey house (jail) whilst the funds for your
plane-ticket are obtained, either from you (via your bank account) your wife
or girlfriend (very unlikely) the British Embassy (equally unlikely) or your
family or friends in the country of origin. In some cases this could result
in a prolonged period of incarceration, an experience not to be relished as
any short-stayer will tell you.
This all means that your Mamasan will be running your business lock, stock
and barrel, possibly and most advisable with the exception of the accounts.
Do keep the accounts yourself, this does not mean you wont get cheated, you
will, by just about everybody including your Mamasan, but it might limit the
extent of the cheating a bit. Good Mamasans are very hard to come by and so
by the law of supply and demand their salary is accordingly high.
Ladies: Well three years ago you could get all you need for between 1,000
and 1,200 Baht each per month. But there is a growing shortage of reasonably
good looking and reasonably young ones in Pattaya, so the salary is now at
least 1,800 Baht and their charge to their clients has gone up from 350 Baht
to 500 Baht or higher. Against these costs, the only return you are likely
to get is from sales of beer.
So many bars sell food now that most only do it to attract customers to
drink and do not make a profit on the food itself. The overall 100 Baht
commission per girl/per client/per night barely covers the girl’s salary and
is not worth considering.
So what are we left with? With costs of 59,900 per month, even allowing for
months with 31 days, this means your overheads are 1,932 Baht per day. At
the current buying and selling prices of bottled beer this means to say that
you will have to sell 121 bottles of beer a day just to cover your
overheads! Not allowing for losses by crafty theft, breakages, customers
walking off without paying and so on. This in a city literally bursting at
the seams with every imaginable type of bar, go-go, restaurant, hotels with
bars, beach vendors and Karaoke bars. If you think you can do it
successfully, why do you think you are any better than the other 300 or so
bar leasers?
It totally amazes me that otherwise sane, sensible, logical people—and even
businessmen invest—sometimes their life savings in such a dead-end project.
Finally, do bear in mind that you will not be doing all of this for
yourself, you’ll be doing it for the greater benefit of the owner or agent,
because if (and its a very big if), you manage against all the odds to build
up a good business, at the end of your lease the owner can just take it all
away without a bye your leave, silly isn’t it?
Good luck, believe me you are going to need it.
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