The biggest mistake we see with expats opening businesses in Thailand is that they often open a business with an idea they need to make money to be able to stay and live in Thailand.
The majority have zero business experience or business education.
Lacking this, the common tools to determine the viability of a business, like a market survey, are often overlooked altogether.
Short of a market survey and a professional business plan, there is no way to estimate the probable financial success of a new business.
Therefore, many new business owners get into trouble right from the get go. Not understanding hidden costs, over-runs, over-estimating potentional customers and so on. Also dealing in a foreign language and culture, where nothing seems to be completed on time.
Another issue is understanding the impact of labor, finding reliable labor that will show up and stick around. Being able to actually perform the job they were hired to do.
CDB – The cost of doing business. What much exactly does the item cost you are selling for 100 baht? Did you calculate 100 baht profit? No, no and No. Each item whether physical products or food has a cost. This cost, minus the selling price should give you a total profit per item (not counting in the cost of overhead such as rent, utilities, labor, etc.)
Many expats come to Thailand, are not yet retirement age, and have no way to earn a living. Many arrived as tourists, met a Thai woman, got married and want to settle down in Thailand but have no way to get a job.
So they have a wild, and it is wild, (short of any business research), idea to start a business.
Most of these expats are driven with the thought of earnings and earnings only. They seem to think they have this business all figured out, even though the majority have never owned a run a business in their lives?
None ever seem to ask for expert advice or expert help, they have all the answers already and failure is never a forethought.
What we do see happen though is many businesses do not make money or make anywhere near the amount the new owners had expected.
Now what?
Many expats are forced to go back and work in their own countries, to earn enough money for 6 months to shore up the finances of their under-performing Thai businesses.
The second option which we see alot, is that these businesses go out of business due to lack of money. This can create havoc on the family, with many forced to take their Thai families and move back to their home countries.
A business plan or market survey would have told 99% of these new owners that their business idea had no chance at financial success. But with no business experience or education, many have no idea such business tools are available.
The dream of living in Thailand with their teerak is simply to great to pass up. The dream becomes more important than common sense.
There is a giant reason why Universities teach business and masters of business degrees.
There is a real science to business that requires an education.
Simply having a dream isn’t going to get you there.
If you think moving to Thailand and opening a business is going to support you until death, you better do your homework first or get a professional to determine the financial viable of your idea.
BEFORE you spend and waste all your money foolishly.