Is it a good time to buy a beer bar in Pattaya?
The last year has been tough for most foreign investors in Pattaya. There are many reasons for this including the initial knee jerk reaction of many potential investors holding back following the Coup in May. Other reasons are changes in Visa rules and the general tightening up of visa laws. The most visible change is in the drop in tourism, particularly European and Russian. So is it a good time to buy a beer bar in Pattaya?
The answer to this question depends upon several things. Firstly is it your first business? Many retired ex-pats come to Thailand on an extended vacation and fall in love with the Pattaya beer bar scene, and often a bar lady too! The bar lady/girlfriend convinces the guy to buy a bar for him and her to run. The guy will be the ‘silent’ partner as he is retired and she will run the business. This normally goes one of two ways. The bar is a great success, the retired ex-pat gets to drink himself into an early grave and the extra income helps pay for his extortionate hospital bills when his health starts failing! Or, the girlfriend invites all her friends to drink for free at the bar and basically spends all of the retired guy’s pension pot. Then the authorities turn up and fine the bar for not having all the correct paper work and licenses, which the guy has to pay and then close shop because he is now pot-less! H’mm, is that why the bar was for sale in the first place? Could be!
It might be a better idea to buy the bar-girlfriend a more sensible business, hairdressing salons are the top choice here. This is a popular way for the foreigner to try and steer his lady away from the bar scene and hopefully other guys too!
Ok, let’s be sensible now. An ex-pat relocated in Thailand that has experience of running a bar, restaurant or similar entertainment food and beverage based business could do well by buying a beer bar in Pattaya. Here are some tips for anyone new to Thailand to consider first. It’s not a good idea to over stretch yourself financially with the purchase of your lease etc. It is recommended to spend well within your budget, enabling you to put money aside for ‘hidden costs’. Get the land lord/owner to agree fixed price rental agreement for 3 to 5 years. If your business does well these costs may well rise unexpectedly otherwise if you have a yearly renewable lease. (There’s ‘key money’ too, this a kind of commission that the tenant gives to the owner… Make sure the amount to be paid is agreed well in advance, some owner/land lords are greedy, some are just good at business.) Most importantly, if you do everything by the book and have all the correct paperwork and licenses it will help your business be a success; but it’s worth remembering, prostitution, drinks promotions, smoking cigarettes and shisha are all illegal in Thai bars….