Taking Over a Business in Pattaya: The First Few Months

I've bought a lot of businesses in Pattaya. Here's how I handle the handover and the first few months.

Hold back at least 10%

I never pay the full price up front. How much I hold back depends on what I can negotiate, but my rule is at least 10%, paid a few months later.

There are two reasons. The first is that it keeps the seller interested in a smooth handover. Plenty of sellers say they care about the legacy of something they've built, but once they have all their money, people tend to wash their hands of it. Money still to come three months later keeps them involved.

The second is leverage if problems come up. Some of these businesses are badly run, and things are going on that even the owner doesn't know about. A new set of eyes often finds them.

How long should the old owner stay on?

It varies. With some owners you're better off with a clean break, so they're not coming back in and confusing things. But I usually stay in touch. Once you're deep into the business, questions come up, and I'll often call or meet the previous owner for advice, usually about staff, because they know those people far better than I do. That lasts a month or two, three months at most, and then I gradually step away.

Change nothing for the first three or four months

I don't change anything straight away. I spend the first three or four months working out what works, what doesn't, and above all who does what. Who's key to the business and who isn't. How things are done, well or badly, and why they're done that way. After that I make small changes slowly, and only once I understand everyone's role do I bring in the systems I've learned from my other businesses.

Keeping the staff

I've never lost a key member of staff because of a takeover. Part of that is that staff know I own several businesses, so they're curious to see how things will go. The bigger reason is that I've grown pretty much every business I've been involved in. Growth means the small maintenance jobs that have been on hold finally get done, the things that made their jobs harder. More customers can also mean more tips and a better case for higher wages.

The biggest mistake: going in like a bull in a china shop

The biggest mistake I see foreigners make is the opposite of all this. They go in like a bull in a china shop and change everything to put their stamp on it. They undermine the way people have done things for years, don't explain what they're planning, and don't involve the staff in decisions.

Is buying a bar for a hobby a mistake?

Plenty of people buy a bar here as a retirement dream. It can work, but the odds are against you. More businesses fail than succeed anywhere, and you're also in a different country with a different culture. If you treat it as something to keep you busy rather than a proper job, the odds get even worse.

The businesses I'd never buy

I've never bought into the entertainment side of Pattaya, meaning Walking Street, go-go bars and nightclubs, and I never would. From what people tell me, the risk is very high, and you can be at the mercy of the authorities. People who make it work can make life-changing money, but the most I'd ever do is take a 5 or 10% stake with money I could afford to lose.

Where to find the best businesses

The businesses advertised on Facebook or through agents usually aren't the best ones. The best ones sell quietly. The owner mentions to a few friends that they're thinking of selling, and word gets round. Of the last five or six businesses I've bought, other business people told me afterwards they hadn't even known they were for sale.

If you're new and those opportunities aren't coming your way, get to know other business owners. Friends you play padel with are great for other reasons, but if you want to buy a business here, the people who hear about the quiet sales are other owners.

This is part of my series on buying a business in Pattaya: why buy rather than start, how to value a business, leases, landlords and paperwork and taking over: the first few months. For the basics, including foreign ownership rules, read starting or buying a business in Pattaya.