Hi.
I live in the UK but I spend maybe 3 months of the year in Indonesia, where I have some family and friends.
An Indonesian friend, who lives in mainland Europe, has offered me to start a bar/restaurant with him. He owns the venue, for which he paid $6,000, and he is offering me half for $3,000 and then we would both put around $7,500 (this number is an estimate at this point) into the business.
Specifics that I have identified are:
although there is mains electricity, the supply is unreliable, and some days the power could be off for 12 hours. On top of that the power is poor quality (sometimes short on volts)
there is GSM internet, but it's about as unreliable as the electricity.
my friend already owns a similar business (a guesthouse/restaurant). I perceive it to be a vanity project, which has no chance of ever making back his investment. He is a company owner in Europe, so this isn't a problem for him.
I am in a somewhat similar position in the sense that the proposed investment is less than I have spent on some vacations to Indonesia, but on the other hand I think that unless the business is profitable it's not a very good vanity symbol, so profitability is very important. He, for instance, suggests that we sell luxury items such as steak, and I pointed out that the profitability on this would be poor, and we should stick to simpler dishes like spaghetti, or in the first instance just beer and Coca-Cola, which don't require any kitchen.
Theft and corruption are basically de rigeur among Indonesians. On top of this, there are virtually no rules, forms and certainly no such thing as an employee handbook. So in other bars I would expect not only for a significant portion of loss due to theft, sometimes from guests (refrigerators placed in the open), sometimes from staff (no accounts kept, no cash system, no cash registers anywhere in the village). I want to change this and operate according to Western standards of business, operating stock control and POS systems.
Wages are very low. The minimum wage, officially, is $125/month. But locally many staff are not paid at all and just 'help' for food + board, and those that are paid would be paid less than that. People do make more money than this, but by establishing their own business.
I also have a tour business in Indonesia, in the same place. This makes a profit, and there would be good synergy between the tour business and the bar (restaurant).
There are no taxes to be paid, electricity runs around $0.10/kWH, natural gas costs either $1/kg for 12kg tanks (unsubsidised), or around $0.50/kg for the 3kg tanks (subsidised), diesel/petrol is around $0.60/litre, wages are up to $10/day for day labour, and maybe $100/month for an unqualified staff. I am not completely sure about educated management wages
Risks include: land confiscation, higher-than-average-for-the-West fire risk, flood. There would be no possibility of insurance, so I would self-insure.
Anyway does anyone have some tips for getting the systems such as forms, paperwork, manuals and processes in place, and also specific POS and inventory systems that would work well in this kind of environment?
Submitted February 17, 2015 at 08:10AM by indosnooze http://ift.tt/1L4XJID smallbusiness
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