Avoid scams as an international company in Thailand
Every year we get more and more enquiries from people who are starting their own business in Thailand. For investors in Thailand there are a diverse range of business opportunities to choose from although not all of them provide you with a model and system to build a successful business and achieve a return on your investment as an international company in Thailand.
What can prospective Thai business owners do to make sure you avoid the scams? First, do your research, including getting information up front and in writing before you start registering your company and moving forward. Most legitimate business opportunities don’t hesitate to give this information. Second, speak to as many people who have previously bought into this particular business (or similar) as you can.
Identifying fraudulent Thai business opportunities is not always easy however there are signs if you look close enough. Adverts for rip-off business opportunities often appear in the classified pages of the national newspapers and magazines and online. Most adverts use the similar lure of incredible earnings potential in a relatively short period and for very little effort. One phrase often associated with these opportunities is ‘no selling required’. They promote the ability to set your own hours, be your own boss and work from home with minimal overheads. In other words they sound almost too good to be true.
What the adverts don’t tell you is the ‘entrepreneurs’ behind these so-called business opportunities aren’t really interested in supporting you to run a successful business. They’re only interested in getting hold of your money. To get your buy-in they may mislead you about the earnings potential and promote an opportunity in Thailand that has little chance of succeeding. They may limit your chances of success by providing low-quality or out-dated merchandise, poor quality equipment and locations with poor business potential.
If you’re considering a business opportunity in Thailand, do your homework first:
The Internet can be a good source of information about a business opportunity and its owners. A simple Google search can often reveal consumer complaints, outstanding legal action, previous business failures and disharmony amongst investors.
Research all you can about the people behind the business in Thailand. Have they been involved with other businesses and if so is there a track record of success or failure? Is the person running the business actually a director of the company, if not are they disqualified from being so? Sometimes a family member will be listed as a director at Companies House but the person disqualified will be running the operation.
If there are any potential earnings claims ensure that they can be substantiated by most of the network already operating under the model. Understand what the figures are based upon and whether they represent a true reflection of what you are likely to be able to achieve. Get earnings claims in writing and ask for supporting evidence before you even consider setting up an international company in Thailand.
Speak to people who have already invested in the business. Don’t let the owner ‘cherry pick’ who you speak to by insisting on an entire list of the network. By asking a few carefully chosen questions you can quickly build a picture about the potential of the business opportunity you are considering.
Some dodgy business opportunities inaccurately classify themselves a franchise in an attempt to benefit from the pool of investors that are looking for legitimate franchise brands to invest in. There are of course some franchise opportunities that offer better opportunities than others to build a successful business. For impartial advice about the franchise opportunity you are looking at then speak to Lloyds Bank’s team of franchise experts.
Investing in a well established and proven international franchise brand is likely to offer you a better chance of building a successful business in Thailand than selecting a business opportunity from an advert online or in a national newspaper’s classified section. The franchise brands that are members of the British Franchise Association and who meet their standards are likely to offer an even better success rate than franchises that haven’t achieved accreditation.
Another check you may wish to consider are contacting the Trading Standards office both in the home town of the business and where you live to find out whether there is any record of complaints which may indicate questionable practices. Unscrupulous dealers often change names and locations to hide a history of complaints, so a lack of complaints doesn’t necessarily mean that there isn’t a potential problem.
Ask questions and ensure that you are satisfied with the responses you get. Take your time before you commit. Promoters of rip-off business opportunities are likely to use high-pressure sales tactics to get you to buy-in. If the business opportunity is legitimate, the owner will give you time to decide.
It may be the ideal time to realise your dream of running your own business in Thailand but ensure that you do your homework to stop that dream turning into a nightmare.
Head of Franchising
Lloyds Banking Group
Tel: 07802 324018
Richard heads up the Lloyds Bank franchise team and is a regular contributor to trade publications and national press. He regularly speaks at franchise seminars and exhibitions.