Venture Sponsorship – 2

In Part 1 I had intended to write about a little-discussed subject – the farang sponsorship of Thai ladies in business – but got sidetracked into an over-long introduction.

We have all encountered stories (or taken part in ventures) of farang sponsorship of, for example, the Thai building industry, or at least, of the lady’s relatives who are keen to exhibit their abilities to lay building blocks in something resembling a straight line…

We have heard about the pig farm, that the lady and her parents try to operate without any knowledge of livestock, or animal husbandry, intended to make the family self-sufficient… with a need for occasional injections of additional capital, of course, for feed… or something…

And there are several other more prosaic schemes. I overheard a naive ‘new’ farang ask his girlfriend of two weeks, after they had been sitting in a restaurant, unable to speak to each other: “So… what you think best… the salon, the travel agency, or the motorcycle rental…?” The lady didn’t answer, apparently not understanding the question.

The point of this is to illustrate the naivety of approach. In the West I have encountered guys almost desperate to run a bar, or ‘pub’… and why…? Because they spend so much time in bars (in the West), they feel they might as well have their own… but they never consider their ability to run (any kind of) a business – just order the booze, sell it, and drink it – what could be simpler…? Perhaps we shouldn’t be surprised that many Thai people also have a blind faith in their innate abilities.

Think of ‘cowboy’ builders who, after working for a boss, decide they can do just as well on their own, and pocket the profits themselves – they are rarely successful, usually having little idea how to finance such a venture, and having to take money up front, to pay for materials, and then working for a week or two before asking for wages. An easy check for budding entrepreneurs is to seek a bank loan to get started. More often than not it will be refused. It is probably also true that if a young lady with no business experience wants to start an ostrich farm Thai banks will also be less than enthusiastic… so these ladies try elsewhere – with naive farang.

Venture capitalism has numerous opportunities to fail but, when successful, can provide huge profits. ‘Venture Sponsorship’, coupled with naivety, inexperience and limited business acumen, is probably even more likely to fail… but even if successful it never realises vast profits – if profits exist at all they will be mysteriously spirited away… The sponsor will see none of the profits nor any return on his investment. By all means make a gift to your beloved, but don’t think of it as a business venture.

At this point please don’t think I’m being overly negative. As I wrote before, if you want to give your girlfriend a present, no strings attached – an iPhone or a 3-bed, 3-rec., 2-bath, house – by all means do so – no problem. But, if you expect to be able to use the phone as well, or to live in the house, ensure it is not a gift. For every man who can point at ‘his’ home, and claim: ‘But I still live here’, I could ask: ‘But for how much longer…?’ Nobody knows how long these things can last.

Thus, if you want to ‘help’ your lady, and also her family, by providing them with their own income, ensure they know how to run the business. My wife, for example, before I met her, had acquired sponsorship to open a hair salon. She was equipped with the furniture and huge wholesale jars of consumables. Within months her stocks of shampoo etc. were at zero so, without cash to replenish, she started buying small bottles in the local 7/11. Maybe she lied about her assets but it seems she was still living day by day, and not saving for future expenses. I made a small donation but, six months later, declined, and the business (that never really was) went belly up.

As a child my mother pressed upon me the adage: Never throw good money after bad..

A very good friend in Thailand met a bar-girl in her early 20’s (allegedly) who was determined to have her own bar. She found the premises and informed my friend she had to take a 1-year lease, and the first year’s rent had to be paid up front. He paid. The bar was a success, much more so than it had been with the previous owners. The girl’s possessions steadily increased, as perhaps did her bank balance but at the end of the year she didn’t have the money for the next year’s rent… Thus, this was NOT a viable business. It could have been but, either through mismanagement or dishonesty it was not.

As far as the farang was concerned the business was a flop, quite apart from seeing nothing of the profits, not a red cent of his ‘investment’ returned to him (as promised), and he pulled out. Unable to quickly find another sponsor the girl also left town.

I mentioned in Part 1 that my wife and I bought land and built a house. The land was 40-rai and had been farmed, with sugar cane and corn. I decided, with no farming experience of any kind to see what we could do. My wife, who was a ‘townie’, like myself, assured me she could run it. She couldn’t…!

After the palaver with ‘buying & building’ [see part 1] we jointly supervised a crop of sunflower seeds. It was a new venture in the area and we were unknowingly used as guinea pigs. As not even the neighbours knew what was happening, the local council sent officers to help. It was a success, and surprisingly we made a decent profit (even after I reimbursed myself for my investment) which was ‘ploughed back’ into a second crop. I was made very aware that my wife had expected to spend the entire income on ‘presents’ – she had no business sensibility. Her attitude was: I put up all the investment to run the farm, she took all the income, and I put up the money for the next crop. It might have been a good game but… It would not have been a business…!

The second crop I took a back seat and allowed my wife her head. As we hired all the labour locally the seeds were sown, fertilised and weed-killed by people who knew what they were doing – supervised by somebody who obviously didn’t have a clue but who thought she knew it all… and the know-alls of the world remain dumb, being innately unable to learn – because they think they know it all.

When we came to harvest, the neighbours were suddenly all busy, and my wife had to import labour. Some only stayed a day or two and left, disenchanted. My wife said it was Thai custom that nobody was paid until the harvest was in, to prevent such problems. Maybe it was her open declaration that, “All Issan people are stupid…!” which didn’t go down well…

In the end she laid on a little ‘feast’ / party when everyone arrived for their money, which she obviously had to borrow from me until the wholesaler had paid her. I suggested we should go to the bank to get smaller denominations – she thought the harvest-pickers would have change…

Then came the final reckoning – everybody knew exactly how many sacks they had filled, and my wife had kept scribbled notes of this, daily. The problem came when she tried to multiply these figures by the price / sack – everybody disagreed with her figures and even started to think the ‘townie’ and her rich farang were trying to cheat them. One woman slipped away, by which time I had felt obliged, at the risk of my wife’s loss of face, to step in. By the time the woman returned, with the village headman, all had been resolved.

In the final analysis our profit was down from an 87% return on investment from the first crop, to 19%. It wasn’t technically a flop but… for all the headaches, the venture had been a complete waste of time. For the next six months I let the land stand fallow…

During that off-season my wife disappeared – just left one morning while I was asleep. Perhaps I was lucky to wake up at all. Later, the headman informed me it was time for the next crop, and would I like him to arrange it for me. On my own, and a tad bored, I accepted. I supervised the entire season alone. I received help and advice when I asked, or when it was thought I needed it. My wife’s absence wasn’t discussed. When it was time to harvest, all the neighbours returned. I have to admit a slight feeling of vindication, especially when my wife had been blaming my ill-humour and miserable disposition for turning the locals against us.

As with the supposedly deaf builder, my wife was never slow in blaming others for her own shortcomings…

The only drawback was being subsequently conned by the wholesaler. The headman urged me to prosecute, but I suspected he wanted me to fight an old battle of his own. Even so I made an 83% profit – it should have been 103%.

I have to repeat, I had no farming experience, and I’ve never been a businessman – but I’m not entirely stupid.

As before, I should stress that I do realise not all wives and girlfriends (and others) are the same – there are some who are talented in some areas (including my ex-wife) and who can run a good business…

To be continued…