Saigon at night is quite a sight….
Recently, I met with a local Saigon man about purchasing one of many bars he owns on Bui Vien street in the famous backpacker ghetto of Pham Ngu Lao.
The man’s name is *Scotty (changed) and on the telephone he had a heavy Scottish accent, so I expected to meet with a white fellow.
I arrived at the agreed upon meeting place and was greeted by an Asian man with a thick Scottish accent and stereotypical Scottish mannerisms (spastic facial movement, like the characters in the Scottish movie Trainspotting).
After getting over my bewilderment at the Thai-Scotsman (his nationality and birth was Thai) we got down to doing business in Vietnam.
First thing he asked me if I will run the bar myself or if I will have staff. I said I will have staff. He said but can you trust them? I said no.
He said you need to really trust them, man, or you need to watch them all the time. It’s very hard to find someone to trust here, he said.
He said “is your girlfriend going to get involved?”. I said no.
He said “Good, it’s bad business to get women involved. When they get their foot in the door then everyone becomes about them”.
I said “I know. She’s staying home. She will not be joining any business ventures, ever. Her place is at home”.
We went to go look at the bar. It wasn’t much. I took out my $1,000 iPhone 5s 64GB to snap a quick photo.
(Note: I am not going to publish the photo because the bar sign embarrassingly and out of place says “Potato” in bold yellow).
He said “Be careful with your phone man, this isn’t Thailand. They’ll snatch it up and run away”. I said “I’m bigger than them”. He replied “Doesn’t matter, man, they’ll be on motorbikes”. Fair point, I thought.
We got to talking about the bar business in Vietnam. The bars at this time of night, 8pm, were dead but the restaurants were all full.
He said right now all the foreigners are eating dinner. The bars really pick up about midnight.
He said the trick to getting customers is to let the working girls work the door. The working girls will lure men into the bar and men will buy the working girls “lady drinks” and the bar pays nothing to the working girl.
(A typical salary for a non prostitute bar girl in Ho Chi Minh City is $140 USD per month + whatever they can steal).
Lady drinks are normal drinks marked up at a high rate. The bar will keep 70% of the cost of the drink and the lady of the night will keep 30%. Over the course of the night a lady, and the bar she sits at, can make some money.
The trick to getting customers, it seems, is having many girls at the bar. I’ve been through Southeast Asia enough times to know how persuasive Asian ladies of the night can be. In fact, persuasion isn’t the right word. Persistent comes closer.
On to the bribes, a big part of doing business in the Wild East…
The police have already been paid off, he assured me, and there will be no hassles there. Once per month the police will send a boy calling to collect about 1.5 million Vietnam dong. And that’s all there is to it.
(In my own upscale neighborhood I pay the neighborhood watch 600,000 Vietnam dong for them to patrol the area on their motorbikes every day).
The rent for the bar is $900 USD per month. The landlord lives above the bar so there’s free security. Hoods don’t typically break into occupied homes.
Regarding the lease of the bar…
Some quick notes: You can’t really own property in Vietnam, you can only lease. The lease would be mine for five years if I signed off on the deal. I could either have a local I trust put the lease in their name or we can keep the lease in the Thai-Scot-Vietnamese man’s “sister”.
I’d choose to have the name on the lease stay in the name of the Vietnamese “sister”. It is better to not inform the police of a new owner, so I do not get shaken down for more bribes from the police. I see white skin in the mirror, Vietnamese see my skin as green.
It is better to “hide” myself as the owner. I will have a side contract with the Vietnamese lady whose name is on the lease. The side contract will say “Yes, her name is on the bar lease but I own the bar”.
The less you can do with the police, the better off you will be. They forgot to mention that in WoodEgg.
(WoodEgg is a company that sells idealistic books about doing business in Asia).
If anything naughty happens I prefer the police to come calling for the name on the lease, her, and not me.
The bar will cost basically nothing to buy, and I could flip it for a profit with a little work, and the monthly requirement is also basically nothing.
So will I buy the bar?
Undoubtedly, no. The profit potential seems to cap at $10,000 USD per month. I’ve been able to make that much money in single days before.
(Though in the next couple of weeks I will investigate the bar several times, at several different times of day to see how well the bar is run, to see if there is any potential, to see if they even get customers. I will, of course, not inform the owner any time I go there to investigate.)
The stress of running a bar where everyone is stealing from you seems a little silly when I could type some buttons and the same amount of money would appear in my bank account overnight.
I also don’t like bars, I don’t like staying up late, I don’t like drunks, I don’t like the filthy people who populate Pham Ngu Lao, I don’t like staff embezzling from me etc..
There’s also the curious case of the single repeated phrase.
Each time, every time, all the time when I think of getting into a brick and mortar business and meet with a local businessman (actually, when I meet with anyone) they all say the exact same thing.
“I wish I could do what you do”.
Which leads me to the rather obvious conclusion…
In my case, why change when I’ve got it made? Why downgrade when I’m at the top. Why eat hot-dogs when I can dine on prime rib I thought to myself…
So I got on my 125cc motorbike and drove off into the night.
I got lost a little bit but it’s not a big deal. I’ve been to the city many times before, I can always find a landmark I know.
Saigon is also quite a colorful city and can be a joy (and can be maddening at times) to drive around at night and take in the sites that are so alien to an American.
My thoughts upon first arriving in the city, now nearly two years ago, were “Wow, this place is alive!”.
I was right. Saigon is very much alive and kicking.
Is money to be made in Saigon?
Definitely, yes. If you have the right connections and if you have balls of steel.
All I possess is balls of steel, connections take time to acquire.
One thing you undoubtedly need to do good business in Asia is a savvy and slightly trustworthy local partner.
(I say slightly trustworthy because they will all cheat and embezzle a little bit, it’s a way of life here and it isn’t frowned upon. WoodEgg forgot that one too).
I believe I will stick to making a modest yearly income from my digital empire until such time as an opportunity too good to pass up comes across my desk.
But I’m always looking, I never stop looking and I take meetings even when I’m feeling too lazy to go (like the night I met with the bar man).
I’m also expanding operations in a few key areas (digital publishing).
Life doesn’t just happen, boy, you got to make it happen.
You’re in the game or you aren’t.
Be the real deal and I’ll give you a fair deal and that’s all there is to it.