So You Want To Start A Business In Thailand?

I read this post on a Thai forum the other day:

“I currently live in Viet Nam and am thinking of moving to Thailand. I have approximately 3 million baht and want to start a business in Phuket, maybe a guest house or a restaurant/bar. What do you think of this idea?”

I wanted to just scream at my computer screen “No, you idiot! If I thought for a week I couldn’t come up with a worse idea, or a better way to lose all my money.” Hey, if the guy wants to throw his money away, throw some of it this way.

So maybe now I should tell you what I really think about Expats starting businesses here in Thailand. Pick out 10 Expats who have tried to live out their dream of starting and owning a business here and I can show you at least 9.5 of them who have lost everything.

For example, I have a friend who had a great business plan and a good mind for business. About ten years ago he started his dream company. And it was doing OK, for a while. Just last week he told me that he would not be able to make payroll for his six employees this month. His savings and investments here are all gone, some through fraud perpetrated against him by his partner/girlfriend (I can’t think of anything worse than having your heart broken except maybe having your bank account emptied at the same time, by the same person.) and some due to lack of payment for services rendered (mostly by other Expats who cannot pay their bills either).

I don’t give advice to people about how they should live their lives. But I do have stories to tell and some thoughts on the subject.

1. I am retired, and I am going to stay that way. If I wanted to live a stressful life like I did before I quit work, then (as they say in New York) “I should’a stood at home.”

2. Maybe I might need some extra income. Instead of laying all my retirement savings down on an iffy endeavor, how about doing something like eBay or Craigs list or something that doesn’t require locking up all my savings.

Before I retired here permanently I bought Thai handicrafts in Chiang Mai, shipped them back to Seattle, and sold them at outdoor fairs for 4 summers. Best summers I ever had. Didn’t get rich but I made enough to live in the U.S. for the summer and then buy my plane tickets back here.

3. If one just gets bored and can’t find anything to do with yourself, and you think starting a business will make things better, then think again. If you can’t find anything to do here and are bored then you probably have had the “bored” problem all your life. You’d probably be bored anywhere. If you start a business you’ll just be exchanging stress and worry and 16 hour days for bored.

4. Occasionally you might meet someone who proved successful.

I did meet a man who just needed to make himself busy. He opened a resort/spa and has been quite successful. He had been a hotel owner back home for 30 years and had loads of money and he knew the business and had the cash to survive the first difficult years before his business took off and all you see is your money going out the door. He had all the prerequisites to build a successful business, which he did. His problem now: He is in his seventies and is having trouble keeping up the pace of running a popular resort. He’s tired and would love to slow down, but can’t (picture Rick in Casablanca) or he’d lose everything. So success can also have its drawbacks too. That is something many retirees looking to start a business here often overlook – How long can they keep up the pace of owning a business?

Although it is rare, I do know a few Expats who have had successful businesses here. They all have the same things in common though: In depth knowledge of their business, lots of money, a really good marketing scheme. Here are a few that work and are run by people I know.

Selling URLs and Pay-Per-Click (PPC)

One business owner I know buys domain names (URLs) with catchy names that he later resells to people who think these names will attract people to their sites. Right now he is concentrating on Chinese URLs. He also has a number of pay-per-click sites that you end up at when you have mis-typed the address you really wanted to go to, like (not owned by my friend): thaivis.com instead of thaivisa.com. You end up at a site with a list of other websites, usually similar to the one you wanted to get to in the first place. The website owner pays my friend a few cents anytime someone clicks on one of these. It’s a one-man business and takes almost no investment but he needs to keep quiet since he is working without a work permit.

U.S. Pet trade

I know someone who sells to the pet trade in the U.S., mainly for dogs. He has opened a fabricating plant here and ships the completed items back to the U.S. with quite a savings to what it would have cost to make them there (It’s called “outsourcing”.). He also owns the distributorship back home so he has no problem selling what he makes. Big time investment costs but almost a guaranteed sale on the other end.

Specialized Furniture

A friend got the idea of making large, one-piece wooden conference tables. He scourers the rice fields nearby and when he comes across a big tree (usually a Rain Tree) he negotiates with the farmer who is happy to sell the tree as it sprung up on its own and now it taking up lots space in his rice field. He brings the tree to a saw mill and has it made into large slabs (6′ to 12′ long). He then finished them beautifully, puts on stainless steel legs and voila, an executive, one-of-a-kind-big-corporation conference table. Reasonable investment cost. Most sales are to Europe and other parts of Asia and are done through the Internet.

Note: I know of almost no bar, restaurant, or guest house owners who have really made it. In fact, they are usually looking to sell the business (Don’t believe me? Take a look here. ).

5. Keeping her busy. This is something I hear from older Expat men who are with younger women. Even though they use the words themselves, they don’t seem to know that “Keeping her busy” is just a euphemism for “Keeping her away from ….. (fill in the blank old man).”

Say I want to buy a business to keep my girlfriend/wife/mistress/paramour busy (this is usually a restaurant, bar, beauty/nail salon, or massage parlor, or maybe a 7/ Eleven for the big time spenders). Here the percentage of failures is more like 10 out of 10. If your girlfriend/wife/mistress/paramour knows they have you to take care of them, why go to work? They might be young but they’re not stupid.

6. Real estate is probably just as bad an investment here (if not worse) than anywhere else in the world given the present economic climate. In Thailand, the Thais look at a pre-owned house or condo just as they would a used car – better to buy new. You’d probably be looking at selling to another Expat if you could. If I said that resale of property is an iffy investment I would be severely understating the situation.

Want to be a business owner? Here is what people say.

Know your business. If you haven’t ever run a bar or restaurant or a guest house or 7/Eleven, or invested in real estate, now is probably not the time to start. Do what you know and have an air-tight business plan.

Have loads of money. The money you invest here should be money you could throw away and still be able to live at the level you want.

Know about the business climate in your area. Things are quite different in different parts of the country. Bangkok is different from Chiang Mai, and Pattaya and Phuket are different from just about anywhere else in the world. Here is a book that might be of some help How to Establish a Successful Business in Thailand, by Phillip Wylie.

Know how to market what you want to sell.

Speak Thai; at least enough to speak to your workers and customers and with the various government officials you will need to communicate with.

Know your workers. In Thailand, many of your employees might be Thai, or they could very likely be Burmese, and in the south they might be Muslims. The more you understand their culture the better employees they will be. I just went to a business grand opening in a Muslim neighborhood. The men were in sarongs, the women in head scarves, and they served goat curry for lunch.  A Buddhist opening would have been a different world – and I am sure pork would be on the menu.

Play it by the book. If you try to cheat, say on taxes, or business licenses, or work permits, or hiring illegals, you are in for lots of trouble, with unscrupulous officials, mafia types, shakedown artists. The people who follow the rules, however convoluted they may be, have a much easier time of it. Get a reliable, and if possible honest, lawyer.

So, What to do with that 3 million baht?

A better answer to that person who wants to invest 3 million baht here in Thailand would be: If you lived simply but comfortably, say on 25,000 baht a month, you could live for 10 years on that amount of money.

That’s what I would do.

Happy 2012 from Thailand

I would like to wish all my readers (we just passed the 30,000 hit mark) a happy holiday season and a much better 2012 . I hope that your retirement plans are coming to fruition and that you will be happy wherever you end up.

The year 2011 will long be remembered here in Thailand as the year of the “Great Flood”. In fact, there are still some wet areas even in this last week of the year. And the next rainy season is only a few months away. Will 2012 be another wet one? Let’s hope for the best.

One thing that happens when you retire abroad is that you will usually be far away from loved ones. And at this time of year that can be hard on some. We dealt with it this year by having a nice Christmas Eve dinner at our house with some of our closest friends. Then on Christmas we got a Skype call from our son in Afghanistan and as we were talking our other son called from Phuket. So the whole family was together on Christmas for the first time in many years. Later we got a Skype call from our daughter-in-law in Washington and saw our two grandchildren.

Being away at this time can be hard, but technology has taken the edge off. Blessed be the person(s) who invented Skype. May they live a long and happy life and may Skype forever remain free.

Here are some Questions that our blog readers have sent in during 2011, and my attempts at trying to supply them with an answer.

Q:        I found your website very informative. We are thinking about retiring in Thailand (Nakhon Pathom) in 2 – 3 years.

As the $ keeps going down and the Thai baht keeps getting stronger every day, I’m wondering if we should start putting some money into a Thai bank account before it’s 25 baht per dollar.

What is your take on this? Is it advisable?

A:       I never give financial advice – especially considering the state of my own affairs. And when it comes to exchange rates even the experts don’t know what they are talking about. I can only tell you that anything might happen in 2 -3 years and I know that I would want my money as liquid as possible and somewhere I could get my hands on it. You being outside of Thailand, and your money being inside of Thailand would not make for good liquidity or easy access.  Sure the baht might be 25 to the dollar, or it might be 49 to the dollar – I have seen both ends of the spectrum.  And I am not smart enough to know what the baht will be in 2 – 3 days let alone 2 -3 years.

Long story short, when in doubt, I usually decide to not make any decisions.

Q:        First, I want to thank you for your always interesting, informative blogs. – My Thai wife and I have been living in the USA since we married 18 years ago, but plan to move permanently to Thailand within the next couple of years – to either หัวหิน (Hua Hin) or เชียงใหม่ (Chiang Mai). So, I have two requests:

1. Please compare and contrast the two places we are considering for our home

2. Please give more details about your newly built house, size, total cost, etc. (See Why and How We Built a House in Thailand ). We plan to rent initially, but may consider building later.

A:        1. Good luck on your retirement plans. I haven’t been to Hua Hin in many years. But a good friend is moving there soon so we will be visiting. It is a nice seaside resort area but prices there may be a bit higher because of that. I hear that it has grown from a sleepy village, what I remember, into a bustling place full of Expats. Chiang Mai is a large town but still has retained its charm. In the cool season CM is much colder but it is probably hotter in the hot season. Hua Hin being in the south will probably have more rain and a longer rainy season.

For more info check out this page from my website.

My advice is to take some time, visit both places for as long as you can to get a feel of what it would be like to live here.

2. The house we built is about 82 sq meters (that’s how the insides of houses are measured here). Quite small for a family but for a single retiree or a couple it would be really nice – especially if they only live there part of the year – which many retirees do. We probably could have built it for 2/3 of what we did but we wanted a nice place to rent out, attractive and a place that would last for a long time. So we went with stronger building materials.

For building cost, I have heard estimates of between 8,500 baht – 15,000 baht per square foot depending on quality of materials and how much your contractor is taking off the top. Our costs were closer to the smaller amount.

But… It is not necessary to build. Renting is always a good option. Of course if you have lots and lots of money then who cares, right? But if you live off of a fixed income you are probably better off renting and not locking up your money in Thai real estate.   You’ll thank me for that advice later I guarantee.

P.S. Both my children are Thai citizens being born here. They also hold U.S. citizenship. Any real estate that we have will go to them when we go off to our next existences. So we feel OK about having money locked up in Real estate here as we know that we will be able to leave it to them.

Q:        Two things that I can’t find good answers for;

1. The best way to get my monthly checks forwarded to me in Thailand.

2. It seems Thailand does not want Americans as permanent residents. Constantly having to renew visas or leaving the country for a visa run is not a good thing.

A:        1. The only bank I know that will take an automatic deposit from a foreign bank is Bangkok Bank, and not every branch. Go to the largest branch in town and see what they say. What I do is get automatic deposits into my U.S. bank and then twice a year I write checks on that account and deposit them into my Thai bank. Not slick, but it works.

2. If you were a foreigner and wanted to live in the U.S. permanently how do you think Immigration would treat you? Lots worse than you are treated here. I find the regulations here a little bit of a bother but not enough the bend me out of shape. I just bring a good book (now it’s my Android Tablet) to read when I go to Thai Immigration. I’m retired, I have lots of time.

Another reader added the following:

In answer to the best way to automatically transfer funds from US to Thailand:

– Open a Direct Deposit savings account with any branch of Bangkok Bank in Thailand that will open one.

– Have your payor in the US make a direct deposit into the New York City branch of Bangkok Bank, ABA routing Number: 026008691, referencing your Bkk Bank, Thailand, Account number. New York will then get the deposit credited to your Thailand account within 1 business day. You will receive SMS message on your mobile phone when funds are available in your account. Go to any branch of Bangkok Bank with your savings passbook and passport to access the funds.

Q:        Thanks for the update. Are there any fees for this banking service?

A:        I believe there is about a $5.00 charge on the New York end. Hard to tell exact cost because of the exchange rates, but cheaper, quicker and safer than any other method I have found.

Only downside is you must personally show up at a branch to get or transfer the money. No internet or ATM or sending your wife. However, once when I was in the hospital my wife took a letter from the hospital to the branch which established the account and got the money.

Hugh’s note: Can’t do anything about the exchange rate except maybe making the U.S. stop printing money. My checks twice a year are charged $20 each and take 6 weeks to clear. Really it takes about 2 days to clear out of my U.S. account and the rest of the time to finally appear in my Thai bank account. Everyone should find what works best for you.

Q:        I have read that Chiang Mai being a basin surrounded by mountains, the fog and other pollutants do not get easily blown away, and it hangs around forever. Also that such an environment is very bad for people with Asthma and other lung diseases – records show that incidence of these diseases are increasing every year by leaps and bounds !!

So the question is…Is there any place within the outskirts of Chiang Mai, may be 10 to 20 miles away, that can be called pollution free. And how convenient, and safe, will it be to live in such areas ? Considering that I do not need any great entertainment or crowded markets nearby to make me happy… All that I need is a hospital within about 30 minutes drive.

A:        The short answer to your question about pollution free areas is No. The problem goes all the way from Burma to Laos to central Thailand. Interestingly enough, this year (and mostly last year) we haven’t really experienced a serious pollution problem. Here is a website where you can follow the air quality .

My advice, come here in March – May and see for yourself.

Also, there are some really good hospitals in Chiang Mai

Also, I personally would not live 10 – 20 miles away from Chiang Mai, You would be either in the Jungle or way out in the countryside. Try it for a week. I know I would go bonkers.

Take a test drive of life in Thailand and see what you think before coming here permanently.

Royal Flora 2011

My morning walks in Chiang Mai take me by the site of the 2006 International Horticultural Exhibition, aka Royal Flora. For the past few months there has been all kinds of activity there with hundreds of gardeners getting the old site spruced up. The Royal Flora redux for 2011 is almost upon us.

The entrance to the Royal Flora 2011

Officially known as the International Horticultural Exhibition Royal Flora Rajapruek 2011 it is known by the locals here in Chiang Mai as Puet Suan Lok (World’s Fair of Flowers and Plants) and by most foreigners as the Royal Flora. It runs from 14 December 2011 – 14 March 2012 but if its popularity is anything like the 2006 version they will have to extend it for at least a month or two

The official reason for the exhibition is to celebrate His Majesty the King’s 12th cycle (84 years), Her Majesty the Queen’s 80th birthday, and His Royal Highness the Crown Prince’s 60th birthday. But I think another reason is that they just want to give the Thai people a really good time.

I heard from a number of foreigners that they weren’t that impresses with the last Royal Flora – “It was just flowers and crowds.” But every Thai I heard from absolutely loved it. There is nothing Thais enjoy more than flowers and plants and big noisy crowds. And the Royal Flora had an abundance of each. It attracted over 3 million visitors last time, Thais from all parts of Thailand making up probably 99% of the crowd. They usually came in large groups and families. Attendance had to be limited to only 30,000 people per day and people who didn’t have tickets had to queue up from about 5am to get the few tickets on sale for that day.

This time, as was true last time, there will be exhibits and floral displays from many foreign countries (30 at last count) and lots of corporate sites too.  This year I saw them erecting a large Ferris Wheel and other fun stuff, and each evening there will be entertainment and at 8pm a big fireworks display. I watched the fireworks last time from my balcony and after 4 months of fireworks every night the Fourth of July doesn’t do much for me anymore.

Chiang Mai will be packed and the roads will be jammed.  But after all the Thais have been through this year they deserve a little fun time. So even though the crowds and noise will be a headache, I am happy that they will have this respite from all the problems of the last year.

Here is a photo gallery of what the last Royal Flora 2006 looked like. From my walks past the latest version it looks like it will be even more spectacular than before. It will probably be even more crowded too judging from what I saw today. This morning I was doing my exercises on top of the hill with the Rajapruek tree (Raja = king or anything royal, Pruek = tree, plant, flora. So Rajapruek literally means the “Royal Flora”). I watched as four huge tour busses pulled up to the entrance and hundreds of tourists piled out running around and taking group pictures as Thais are want to do. There were also lots of other people, family groups, couples, walking around taking pictures and trying to get a peek inside the gates. And the exhibition won’t open for 3 more weeks.

The Rajapruek Tree Hill

If you are coming to Chiang Mai better have your hotels booked and your tickets bought. Come as early in the morning as you can and one suggestion I have is before coming, stop by one of the local markets and buy some sticky rice and sai ua (Chiang Mai sausage), and some Kap moo (pork rind), and some naam prik ong (a salsa-like dish something like marinara sauce) and have an authentic Chiang Mai style picnic at the Royal Flora. And enjoy.

Updates

NFL Football on TV:

Right after I recommended True Vision TV for NFL Football it looks like they dropped the ball and did not renew their contract with the NFL. So, for now, there is no NFL on TV in Thailand. But wait… The torrents that can be downloaded, the ones that carry TV shows and movies, also have NFL games that can be downloaded. They are usually available by Thursday and are in .mkv format, which will show on your PC in HD.

Our Tortoise Sanctuary:

Our tortoise girls have begun laying eggs again and we are hoping for a nice bunch of babies in about 7 months. The Chiang Mai Zoo is preparing to offer us a jungle enclosure on the zoo property as a staging area for the pre-release of the tortoises back into the wild. It will contain our tortoises (Indotestudo Elongata, or yellow tortoise) and the zoo’s (Manouria emys or giant Asiatic black tortoise), both native to Doi Suthep Mountain. The black tortoises are huge weighing up to 25 kilos. So they are giving us a sort of “halfway house” to get them back into Nature. Looking forward to releasing them into a safe area where no one will catch and eat them. Any babies that were born in our garden sanctuary (close to 20 so far) will be kept and not released as we aren’t sure whether they can live on their own, never having been out in the wild world.

Places to retire:

Just saw this link on Facebook, 6 affordable Places to Retire. Seems like I chose the right place.

Living with (and on) Thailand’s Creepy Crawlies

One thing a person from a colder climate discovers when they move to the tropics is that much more stuff here seems to be alive. Touch a tree and your hand comes away covered in ants, some biting like crazy. Smell a flower and you stir up bees, wasps, butterflies and moths. Walk through the grass and insects, frogs, birds, and snakes (hopefully) jump out of your way. The tropics is like a great big, living soup.

I’ve had cobras, lizards, turtles, giant snails, huge rodents, bofo toads, and lightening fast monitor lizards in my garden. Scoop up some pond or stream water and it is teeming with insect larvae, small fish, tadpoles of a dozen varieties, and who knows how many parasites. The nights are a cacophony of living noises. And in the mornings the bird songs and rooster crows will make “sleeping in” impossible.

Termites are our current nemesis. Any wood in your house, your furniture even a simple door frame, is fair game.  If tomorrow all the people in the world disappear it won’t be the lion that will be the king of the world. It will be the termites.

There are over 800 species of birds and another 800 species of butterflies living in Thailand alone. I once identified 50 species of birds in one morning while sitting on my front porch when I was living in Samutprakarn. That same garden was the inspiration for one of my first articles for the Bangkok Post, “Cobras in My Garden”.

It is inevitable that all these creepy crawlies will become part of your everyday life.

One thing they often become is food. There is a saying here that if it moves and has legs and it isn’t a piece of furniture, then you can eat it. In some parts of Thailand insects, something Westerners usually don’t consider edible, are an everyday part of the diet. There are lots of YouTube videos and pictures on the Internet of people (Westerners) eating crickets, grasshoppers, scorpions, and other 6 and 8 legged creatures in Thailand as if this were the height of bravery. Check this out to see some examples of brave souls. When the Thais see this they just seem to think that we are being a bit quaint in the excitement we get by putting something this strange into our mouths. For them it is normal stuff.

I have to admit though that it took a bit for me to learn to consider insects as food. Here is what happened.

The curator at the reptile department at the Chiang Mai Zoo, a person who helps us with our endangered tortoise sanctuary (mentioned before on these pages), told us that he was having trouble getting really small crickets for his tiny South American poison arrow frogs to eat. So we said we would look into seeing if we could raise some ourselves. We asked the lady selling crickets at the local market if she could help with some advice. She gladly agreed since we weren’t going to be her competition. In fact she said that her crickets were so popular that she always sold out and usually never had any left, but today (lucky for me) she had a few extra.

So she offered us some of these crispy delights to taste for free. I try to be as polite as I can in cross cultural situations so I couldn’t turn her down but I didn’t let my face show the expression that my mind was thinking. The cricket was deep fried and fat. She chose the fattest ones for us, the ones with eggs since they are tastier. I popped one in my mouth and, interesting, it didn’t taste bad. I didn’t like the crunchy parts so the next one I pulled off the head and feet and tried again. It was sort of like a rich tasting potatoe chip or a flavorful pork rind. So those videos showing all those tourists saying “Not bad” after braving that first taste, that was the same thing I was thinking.

I just heard this on National Public Radio (NPR):

“Nate Erwin, manager of the Insect Zoo at the Smithsonian’s Museum of Natural History, says grasshoppers are 60 percent protein and about 6 percent fat, while beef is about 18 percent protein and 18 percent fat. For 100 pounds of grain feed, he says, you’ll get 10 pounds of beef, but 45 pounds of crickets. Plus, crickets are high in calcium.”

So if you are a “green” thinking person you might want to consider a change in diet. Here to help you is a page from a Thai cooking website – “Snacking on Deep Fried Bugs in Thailand”.

You may never develop the habit of ingesting our insect friends. But Nature and its children will soon become an intimate part of your life here in Thailand in many other ways.

The following is taken from a chapter in my eBook Retired Life in Thailand.

Uninvited Houseguests

If you have gotten to the point of setting up house here in Thailand then you have probably already experienced some uninvited houseguests. No, we are not talking about your cousin Bubba dropping in unexpectedly. The houseguests we are referring to are the creepy crawlies that invade our homes here.

Some while ago a medical lab technician came to work in a hospital here from the US. A few of us helped move her in to a nice dormitory room on the hospital campus and, as it was late, we told her we would be by early the next day to check on her.

As we entered her room the next morning we noticed a peculiar sight. Her walls were covered with red splotches. “What happened”, I asked. “I was invaded in here last night,” she said, “there were dozens of these lizard things crawling all over the walls. It was horrible. But don’t worry, I got rid of them with my shoe.”

I guess she’d never seen a house gecko before. “ching chok“, as they are called in Thai, are the common reptile mosquito control agents that live in all Thai houses. Please don’t kill them. They are good guys, except for the tiny droppings that fall into our noodles as they scamper across the ceiling or the occasional egg laid in your shoe.

A relative of the house gecko, the tokay gecko, is about as long as your forearm, green with red or yellow spots. Late at night you may be shocked out of bed by a loud “tokay, tokay” repeated many times over. Although they look like something out of Jurassic Park they also are good guys. They help deal with some other really nasty critters. Like flying roaches.

When I lived in a wooden house, every night, in the few seconds from the time I turned the light off, to before getting under the mosquito net, I would be attacked by flying roaches. They probably had been waiting all day for this opportunity. These guys are about 3 inches long, and they fly. They would fly in the dark straight for my head and get tangled in my hair. I live in a concrete house now and don’t have that problem.

Centipedes sometimes get in the house. For most westerners a centipede is no big thing. Well, they certainly are “big things” here. They can get as long as eight inches and they have a bite that can put you in the hospital.

Flying termites will swarm during the early rainy season nights. There are 20,000 species of ants in the world, 3,000 live in bamboo alone. I think there are at least as many as that living in and around my house. You’ll get used to the bites of red weaver ants. Their nests in the mango trees are filled with their white larva, a gourmet delicacy. Then there are the tiny itchy fire ants whose bites once almost put me into shock. And of course there are the ants that seem to love living in my toothbrush.

Forget about trying to kill them all or even trying to keep them out of your house. That’s a lost cause. Just keep your house clean and don’t leave any left over food out. If all goes well, you’ll soon learn to live in harmony with all of god’s creatures; like huge hairy spiders and 6 inch black scorpions. You’ll know you have really adapted to life here when even that occasional cobra in your garden won’t bother you.