How do they make a profit ?

Randy Cornhole · Posted: Sat Oct 27, 2007 9:40 pm Post subject:

I think the point to remember is that if they are making a profit at such a low price then how much of a profit are they making at any higher price.
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Guess · Posted: Sun Oct 28, 2007 2:27 pm Post subject:

It doesn't really take a financial genius to calculate how much a meal costs to prepare. What the real costs in the restaurant business in Hua Hin is decor, rent and staff.

These Thai places will, as already said, use cheaper cuts of meat, pay less for herbs and spices and other ingredients to bring the cost down even further.

Using my local restaurant as an example;

The rent is free as the upper floors are housing for the owner and his rent is about the same as a house with no business unit on the ground floor.

The furniture looks like it has been picked up from a tip and cleaned up a bit.

The service charges are picked up by the owner on the same meters.

The crockery & cutlery is the cheapest of cheap imports from China.

The staff are all brought down from Isan and do not get local wages.

The ingredients are good but they do charge a massive 30 Baht per dish including steamed rice.

The cost of ingredient amounts to about 40% of the price charged for the meal. The other costs are ice and gas which would lift it to about 50%.

So if they sell 50 meals per day and sell the same number of drinks (water & Pepsi) then they will have taken about 2,000 Baht with a cost of 1,000 Baht.

So this provides 1,000 Baht per day gross profit for a family of four adults and two middle school girls.

Compared to a laborers average wage of 200 Baht per day and no accommodation it doesn't sound like a bad deal.

However I am sure that there are cases of them not actually making money but reducing their own living costs to zero. That in itself could be the reson d'etre.

PS. What is the name of the restaurant in Soi 88?
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nightstalker · Banned Joined: 21 Nov 2007 Posts: 67 Location: hua hin

like all the places in the world, the locals know best,
no overheads, no farang rents, no excessivecharges at the market.

we all should support the locals and eat at there restaurants, unless its dirty or mai aloi.

why support foreign owned business's who send there profits back oversea's.

you cant make european profits in an asian country. unless your chinese!!!!

hogus · Posted: Wed Nov 21, 2007 1:36 pm Post subject: Re: eat local

johnnyk · Guru Joined: 02 Sep 2005 Posts: 993

I'm often amazed at how the 79 baht BBQ buffet places make any money.
But they obviously do as they stay open year after year and I'm happy they do!
I guess some or quite a bit of the profit is in the beer at 100 baht for a large Chang plus volume business.

skanasia · Novice Joined: 15 Aug 2006 Posts: 3 Location: sweden

I ll be in Thailand soon , i will try that , Thanks
for a good tip. Very Happy

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richard · Ace Joined: 18 Feb 2003 Posts: 1628 Location: Hua Hin

I often sukiyaki it and wondered how they make a profit

The place is always heaving 7 nights a week and sometimes you have to queue to get in. Not for long though as they go out of their way to find you a table

Cheaper cuts of meats, sure, but bulk buying in the 4am market will bring the cost down. Where I go you can even have a whole sea bass and as many giant prawns as you want. The variety of food available is incredible

Always packed with big Thai families and the odd farang

So high volume, low profit margins and make it it on the beers and colas

Repeat business pays!!!!!

Oh yes, and personal service. Got caught out in the rains on Monday and because we are regulars and the wife knows the Issan boss and Issan staff he drove us home free of charge

Imagine that in the UK Think not !!!!!!!!
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Takiap · Specialist Joined: 09 Apr 2006 Posts: 156 Location: Bo Fai

Burger 3 on the canal road serves good food at very realistic prices although the portions are quite small. Its a great setting and good value but if you're ordering western foods then don't expect much and you may have to order a second helping. The prices make up for it though so one can't complain. Another good bet is Baan Isaan, great value and nice setting.
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