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jonniebkk

Coffee Cafe Investment

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100+ metres down a small soi and there are major coffee chains at Sukhumvhit... why in hel_l would anyone go that far out of their way to this place?

If they don't find what they are looking for then they have to turn around and walk back. A treat in the BKK heat.

But a sandwich board out on Suk might be the marketing brainstorm that we are missing here, not to mention the saving of 10 baht compared to Black Canyon, Starfuc_ks and 94 Cent.

Location, location, location. The rest is just coffee.

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In my old job we had a cafe concept in an upmarket condo complex with a similar number of units and also probably 50% farang tenants (about 75% Thai owners).

A few observations, for what it is worth.

You could assume that something like 1/2 the units never drink coffee, and of the remainder, perhaps 1/2 will drink a cup every couple of days, and 1/2 will drink like a cup once a week. That is pretty optimistic, but there you have it.

Doing the numbers, would seem unless you have 500+ units, it would never work unless you also sell food and do room service. Which is what we did. And we also aimed to make it a destination branded restuarant using an established operator who needed to expand. You cannot make money from the units alone unless we are talking 500+ units in a complex almost fully occupied, like an LPN developmnt for instance...and even then the money will be in doing lots of things.

No point in undercutting Starbucks, Coffee World etc; there are few farang who think these places are too expensive that will therefore drink your coffee; those cheapskates are busy drinking their Birdy 3 in 1 crouched over their 14 inch telly with the fan on saving every penny they have for a night out at the Thermae. There are, however, MANY farang that will tell you starbucks is lousy coffee and would be willing to pay the same or more for a better cup, but in that case you BETTER have ambiance for them to enjoy; I'm thinking Starbucks Langsuan for instance. Bad coffee, but nice ambiance.

The idea of a concierge is a nice one, but Onnut is a mid market area; people Thai people aren't going to pay for something they can get themselves easily enough. The concierge concept works and is used in upmarket developments as a selling point - Sansiri, Sukhothai that sort of place.

100m, there is not a chance in hel_l I would walk 100m unless you have a pretty special ambiance. And I'll drive. If you have parking.

Most non branded coffee places don't succeed because they look and feel cheap and rubbish. Coffee is a nice little everyday luxury, if you cannot package it as this, then forget it.

Incidentally, take a look on the street, probably there is a coffee vendor already operating using BMA land in the neardby area (or would be if there is money in it). If you can run a lower cost structure than (assumed) 500b rent per day, everything else variable cost excluding depreciation, then I am impressed. And Thai people generally are happy to buy at such a place no problem if the coffee tastes ok; usually priced around 1/2 the price (or less) of Star bucks etc.

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At my school there are 5 UFM bakery coffee shops and five 7eleven's not to mention other shops selling coffee from 15 baht for the cheap stuff up to 40baht or so. They also have a lot of yammazaki style bakery stuff going from 10 to 30 baht a piece. The students spend. University students are leading the way with all the coffee and bakery stuff. Try one of the campuses that are growing by the day where the better students from wealthier families go. Bangkok University, Thammasat, Burapa have new growing campuses. Actually there are a lot more place to look around Bangkok and in Thailand. It's true that a lot of sellers don't make money but those with good locations and quality products can do well.

As you investigate, if you are pretty good at Thai don't be afraid to ask the counter staff what they sell per day. Most of the workers at chain shops just do their job. They'll tell you how much runs through their register with small talk.

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At my school there are 5 UFM bakery coffee shops and five 7eleven's not to mention other shops selling coffee from 15 baht for the cheap stuff up to 40baht or so. They also have a lot of yammazaki style bakery stuff going from 10 to 30 baht a piece. The students spend. University students are leading the way with all the coffee and bakery stuff. Try one of the campuses that are growing by the day where the better students from wealthier families go. Bangkok University, Thammasat, Burapa have new growing campuses. Actually there are a lot more place to look around Bangkok and in Thailand. It's true that a lot of sellers don't make money but those with good locations and quality products can do well.

As you investigate, if you are pretty good at Thai don't be afraid to ask the counter staff what they sell per day. Most of the workers at chain shops just do their job. They'll tell you how much runs through their register with small talk.

You hit the nail on the head ! :o

If I would to do business there I would open a top-of-the-bill outlet and completely different than anybody else. A bit of a pub-, warm (but A/C of course) and cozy style with many international news papers, magazines about fashion and gadget magazines...dozens of them. Have FREE wireless Internet installed and a few, also free access computers with Internet.

Also TV screens with MTV and Sports.

Offer top quality sandwiches, coffee and drinks only and Thai style bakery stuff as 'disgruntled' mentioned. Train your staff to be friendly, friendly and friendly with the famous Thai style smile; hire students (for students) to make an extra buck.

The moment they approach a client (student) have them tell the Client: "Hello, my name is .....what can I do for you?" (In Thai of course).

Give the clients service, service and service and once the drink is finished: "May I bring you a new one ?"

You will have a top shop.

Call it: Cafe & Coffee :D

LaoPo

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That last post sounds very similar to what Delibean have started in Pattaya. Maybe you should chat with the owner - he is farang but I forget his name - he is rarely in the shop but it seems to work fine without him. Last time I spoke to him he said they are expanding to 5 oulets in Pattaya - second being in Naklua and then Jomtien. No idea if its profitable but I suspect it must be as that store has been there for 3 years at least. Something about it makes it work - cant put my finger on it but it does.

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That last post sounds very similar to what Delibean have started in Pattaya. Maybe you should chat with the owner - he is farang but I forget his name - he is rarely in the shop but it seems to work fine without him. Last time I spoke to him he said they are expanding to 5 oulets in Pattaya - second being in Naklua and then Jomtien. No idea if its profitable but I suspect it must be as that store has been there for 3 years at least. Something about it makes it work - cant put my finger on it but it does.

Yes, more or less; didn't know about them but it looks very good.

http://www.delibeanthailand.com/home.html

LaoPo

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unless it became a little success and had 4 employees and qualified me for a WP

Not much to add ( it is 3am!) but thought I would mention, you don't need 4 employees to qualify for a WP.

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If I would to do business there I would open a top-of-the-bill outlet and completely different than anybody else. A bit of a pub-, warm (but A/C of course) and cozy style with many international news papers, magazines about fashion and gadget magazines...dozens of them. Have FREE wireless Internet installed and a few, also free access computers with Internet.

Also TV screens with MTV and Sports.

Offer top quality sandwiches, coffee and drinks only and Thai style bakery stuff as 'disgruntled' mentioned. Train your staff to be friendly, friendly and friendly with the famous Thai style smile; hire students (for students) to make an extra buck.

The moment they approach a client (student) have them tell the Client: "Hello, my name is .....what can I do for you?" (In Thai of course).

Give the clients service, service and service and once the drink is finished: "May I bring you a new one ?"

Some good ideas; there are places doing almost every idea here already, but mostly not all in one place.

Service is a funny one; the idea of the American style 'I'm XXX, can i take your order'type service will fly as long as you have American customers or Thais who studied in the States; otherwise the rest of the world doesn't like that particular aspect too much (as it is a bit OTT) however all the rest is good. Upsell is ALWAYS good. Staff who know what they are doing. etc.

You'd be surprised what works service wise for students; be prepared to pay a decent wage otherwise they won't do it i.e. you are not going to get by with 200b a day + tips for anyone good at a guess!

However, it ncessarily won't work near a university, as most students already have their hang outs and it is a very price sensitive market.

Only problem with a format like this (speaking as the landlord renting premises to a business operator with a plan like this) would be concern that people would sit there all day talking rubbish, meeting friends, and no one would buy much.

That's why this concept will work best in a more upmarket environment as True Cafe etc have been doing already. But a slightly different spin on it could work....

That's not a 500k investment however; but the right location and service and so on as outlined above is what it will take to get a successful coffee business working here.

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two more satang... 100 metres down the soi?

It will take a Thai 2 days to open up only 20 metres down the same soi and game over.

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Why do you think competition is bad?

Is there any kind of business in the world without competition?

and for the OP,if you're willing to put some hard work on the business live the business and ready for competition (as you want to open business means you are..).

Go for it.

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the metrics is the guy knows its a lousy investment. he needs help with his gf. i say give her an allowance, it would be cheapeer than buying an obvious moneyloser.

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two more satang... 100 metres down the soi?

It will take a Thai 2 days to open up only 20 metres down the same soi and game over.

Good point!

To paraphase that famous saying about the 3 most important things in having a good retail business:

1.Location

2.Location

3.Location.

Pick a better location - be prepared to pay more initially - but equally - earn more in the long-term.

Study where (and why) the 'Big Boys' have located their operations in certain areas - and learn from it.

Good Luck,

Bucklt :o

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I have been presented with the opportunity to buy a newly established coffee shop cum cafe in Bangkok. It has been open for only a few months and is an in-house operation at a residential building. The investment is not large (less than B 1/2M) and is a turnkey operation. I have never owned a retail shop of any kind before, but do have extensive experience in the financial markets.

I was wondering if anyone would cared to share some thoughts on the metrics involved in making a success of such an operation? It is a small cafe - only 1-2 staff required and there is no onsite cooking involved. Just coffee drinks and baked items.

Thanks in advance. Also, if there is anyone reading this who is a consultant or has experience in the food service area (any ex-Starbucks managers bumming around Thailand at the moment) who would be interested in some paid consulting work reviewing the operation and its viability and offering operating advice, please PM to me.

Thank you.

Is "Coffee" the only reason why one drinks "Coffee". I think it has more to do with the ability to sit down and watch people go by while sipping coffee.

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apart from all the "location, location" calls (which are absolutely valid!) make a spreadsheet with a calculation.....put in the variables and the fixes and play around with it. You will get very easy a feeling about how many units you have to sell to break even and how many to make a decent profit.

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