Young Thai entrepreneur juggles businesses:
Auto leasing, event organising, vintage records...
By Jon Fernquest |
If there's anything that successful Thai entrepreneurs all seem to have in common, whether it be tycoon Thaksin or the family down the block running a laundry, variety store, offering a motorcycle taxi service, and selling sticky rice for some extra cash in the evening, all out of a tiny one room home, is that they have their finger in a lot of pies.
They are continually trying out new business ideas in search of the one idea that works, satisfies customer needs, and generates a steady income. Family businesses are in no way guaranteed survival from one generation to the next. The crafting of a new business is also, in no way guaranteed success, so entrepreneurs have to be flexible, continually trying out new ideas and new approaches to old ideas.
Today's Bangkok Post business section features a wonderfully informative profile by Bangkok Post journalist Nina Subcharoen of a young entrepreneur searching for innovative new ways to perpetuate the family business.
Here is the article in full:
Sound investment
Leasing and event entrepreneur Danucha Verapong helps keep vinyl records alive. By Nina SuebsukcharoenThursday May 22, 2008
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If you think running one business is challenging, try walking in Danucha Verapong's shoes because he operates three companies.
The first is Eastern Commercial Leasing Plc, an auto leasing concern of which he is the CEO. The second is the event agency Kool Solutions, and the third and most novel is Nipper Records Cafe.
Located on the ground floor of the hip and pet-friendly Ozono Complex in Sukhumvit Soi 39 close to the Italian Thai building, Nipper sells vintage vinyl records and turntables to enthusiasts who crave real sound over tinny MP3s and the sonic sterility of CDs.
The store is named for Nipper, the dog in the painting "His Master's Voice", which served for decades as the image of the RCA label.
Here, among shelves choc-a-bloc with Nipper memorabilia, one can buy and sell vintage vinyl records and turntables. The music runs the gamut from jazz and fusion to classic rock, pop rock and well-known Thai singers.
Mr Danucha says audiophiles love old LPs for their sound quality and are willing to pay. Most discs are priced in four and five figures, with some reaching 100,000 baht.
"Even for Thai records the prices are high," he says. "For example, this Carabao record costs 5,000 baht. ... It's the only record that has songs sung by Mitchai Bancha. It was from the first Thai movie to make one million baht, Mon Rak Look Thung."
The collectors who patronise Nipper include doctors, financiers and CEOs. "As we get older we spread the risk and turn risk into happiness in investment, and [vintage music] is something whose price keeps rising," says Mr Danucha. "I keep gold too but gold is not something one can listen to."
Music enthusiasts worldwide, he says, are rediscovering analogue and favouring it over digital formats. For one thing, analogue records, physically at least, cannot be altered. "There are no fake records."
Also while there are others trading in vintage records in Bangkok, Mr Danucha says he is the only one importing LPs from US and Japan . His best sellers are jazz discs followed by classic rock including Elvis Presley and Elton John.
While some companies have resumed producing vinyl records, finding good equipment on which to play them can be a challenge. Music lovers often have to turn to high-end audio stores and be prepared to shell out five- or six-figure prices.
"People want to play the records but don't have the players," says Mr Danucha. "Some people have old records at their grandparents' homes, but now [companies] they are starting to produce them after a gap of 20 years."
When he's not tending the record store, Mr Danucha might be found brainstorming ways to help clients of Kool Solutions create memorable events. He started the company eight months ago with his 28-year-old partner Mingmongkon Thavikulwat.
He says Kool is an event agency, not just an organuiser, with full 360-degree service from designing and planning to staging an event. It also handles public relations, lays out long-term strategy for the client and assesses the result.
"This sort of business grows very fast, it's the business of the new generation such as lighting and holding concerts. It's not like traditional business where you have to build a factory and break even in four to six years," he says.
Kool Solutions broke even within three months and its turnover in the past two months has been around 80-90 million baht. "The margin in this business is 30% plus or minus. Big events may be less, small events may be more."
Among its clients are Diageo Moet Hennessy, Boonrawd Trading Co, Ltd, Unilever Trading Co Ltd, UOB Bank and J. Walter Thomson.
Mr Danucha added that the overall event market is worth 20 billion baht a year, 40% of which is spent by the government, so there are plenty of opportunities for new business.
Selling records and staging events may be more fun, but Mr Danucha also plays an active role in Eastern Commercial Leasing, the 30-year-old family business that focuses on second-hand Japanese cars. The company is well-entrenched in Bangkok and the Eastern Seaboard with around 6,000 vehicles on its books. He joined it three years ago after working at Bank of Asia for around 10 years.
"Why do car buyers choose ECL? It's because we specialise in auto leasing, we don't give housing or machinery loans, we don't accept deposits, our staff are from this line of work. We can give you a loan in three days, it's very fast," he says.
ECL's loans are up by 20-40% from the end the last year, helped by falling interest rates that have improved sentiment among consumers, as has the decrease in prices of some car models.
Mr Danucha observed that people generally borrow 75% of a car's value with his company's effective interest rate now in the range of 9-10%. He favours Japanese cars and pickups as they are the easiest to sell.
However, new cars depreciate by 30% in the first six months, which is why he believes it's best to buy second-hand. He himself buys and sells cars all the time and currently owns four Porsches and a Toyota Fortuner and Camry. "If someone has a good car and suddenly needs money and turns to me, I'll buy it, and if someone good wants to buy my car I'll sell it."
Even so, he says he doesn't like driving and has a driver to take him around or uses taxis to shuttle between his businesses.
(Source: Bangkok Post, business section, 22-05-08, temp-link)
Vocabulary:
an entrepreneur - a business person who starts new businesses (startups), that may be risky because untried and unproven, passion for success drives them to organize available resources in new and more valuable ways (See Wikipedia)
juggles - try hard to give enough time to many different activities, such as work, family, different businesses, etc... (for example, juggle budgets and resources, juggle commitments, juggle the demands of a family with a career)
have in common - have the same features or characteristics
a tycoon - a person who is rich and powerful from success in business
have their finger in a lot of pies - have a lot of business projects going at the same time
a profile - a short decsription of a person and what they do
perpetuate - keep going so it doesn't stop or cease to exist
leasing - a legal agreement to possess and use property belonging to another person for a period of time in exchange for a monthly rent (See Wikipedia)
auto leasing - as an alternative to buying an automobile, leasing it for a limited period of time, at the end of the lease the auto returns to its owner (See Wikipedia)
commercial leasing - leasing equipment used in a business
a concern - a business
novel - new and different from what already exists
hip - very modern in behaviour, following the latest fashions in clothes and ideas
pet-friendly - a place that allows pets to enter (maybe even offers them special services or facilities, like a special bathroom)
vintage - old but admired and much-liked things
records, vinyl records - the old way that music was recorded from the 1870s through the early 1990s (See Wikipedia)
LPs - stands for "Long Playing," a larger record that plays for a long time, there were also smaller "singles" with a single song on them
jazz discs - jazz records
turntables, phonographs - plays the music on records, the most common device for playing recorded sound from the 1870s through the early 1990s (See Wikipedia)
enthusiasts - a person who is very interested in a subject or activity and spends a lot of time with it
analogue format - storing and transmitting information in a non-digital way, using electrical voltage, physical contours on a record, or radio waves
digital format - recorded so that a computer software can read it and present it
crave - want to have very much
crave real sound - want to listen to analogue sound from a record (not digital computer generated sound)
tinny MP3s - low quality (but small) computer song files, that don't sound very nice (making a highly accurate digital recording of an analogue recording is possible too)
sonic - (adjective) related to sound
sterility - perfect and therefore uninteresting (more basic meaning means: perfectly clean and free from germs like a hospital)
sonic sterility of CDs - CDs don't have the sound imperfections that make listening to records interesting
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His Master's Voice, Nipper - Nipper was a famous dog used in an early record trademark with a picture the dog looking at and listening to a record player, see photo above (See Wikipedia on Nipper and Victor Talking Machine Company)
a trademark - a name or symbol that a company uses on its products, that other companies cannot legally use
choc-a-bloc with - squeezed together, tightly jammed together; completely filled, stuffed
memorabilia - things that you collect associated with a person or organisation, to remember them with
runs the gamut - includes everything, every possible kind of thing
audiophiles - a person dedicated to achieving high quality (high-fidelity) in the music they listen to (See Wikipedia)
figures - numbers, digits
priced in four and five figures - 1,000 has four figures, 24,500 has five figures
collectors - people who collect something as a hobby, such as stamps, coins, art, or old records (See Wikipedia)
patronise - (See glossary)
classic rock - popular rock songs from the early-1960s through the early-1980s (See Wikipedia)
a challenge - something new and difficult, that requires a lot of effort to complete successfully (but still can be enjoyable)
high-end audio stores - stores that sell high quality but expensive equipment for listening to music
brainstorming - a meeting where people freely suggest as many creative ideas as they can think of
clients - (formal) customers
memorable events - events that people will have fond memories of later on in life, that they will remember for a long time
fond - with love and affection
an event organiser - a person or company that skillfully organises large events as a business or profession
the event market - the market for professional event staging services
staging events - organise and plan an event, and then make sure that the even goes smoothly
Public Relations (PR) - managing the flow of information between an organization and the public, the goal is to generate positive public opinion about the person or organisation, commonly works with the media by sending out press releases, also includes apeaking at conferences and industry rewards (See Wikipedia)
plus or minus - approximately, may be a little more, may be a little less
margin - profit margin, usually profit expressed as a percentage of sales or revenue
well-entrenched - firmly established and difficult to change
6,000 vehicles on its books - owns 6,000 vehicles as assets (in its accounting "books")
a line of work - a kind or variety of work (that someone does for a living and career, for example, an architect or a baker)
depreciate by 30% - decrease in value by 30%
shuttle between - move quickly between
