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Should I Open a Burger Restaurant in Bali?

January 28, 2020

Burger Business in Bali

We’ve all heard of those horrendous statistics : 30% of new businesses fail during the first two years of being open, 50% during the first five years, and 66% during the first 10 years. The odds are stacked against you when starting your own business.

However if you look at those odds carefully, what it is telling you is that the odds are stacked against you only after the five year mark. In other words, it is suggesting that it’s more difficult to sustain a business in the long run.

So what must one do to sustain a business for the long haul? Well, one must have a long term plan…and of course, a bit of luck!

In my mind, there are three things that you have to focus on in your long term plan.  Those three are : quality, consistency, and staying relevant. Let’s take a look at these in more details.

Quality

If there is only one thing you can focus on, focus on quality. Quality is the basic of everything else you do in business. Without quality in your products, you can forget about the other things.

Consistency

If quality gets customers in your door, then consistency keeps them coming back. Consistency is the key in keeping your business doors open beyond the five years period.

Staying relevant

Your competition is not standing still and neither should you. To survive in the long run, one must keep one step ahead of the competition. Whoever stays still, risks becoming non-relevant.

So, back to the title of this article: should I open a restaurant in Bali?

The answer is : depends on whether or not you have a long term plan for your business. If you do, then Bali offers endless opportunities for the right product and concept.

Advantages of opening a restaurant in Bali :

  1. Due to its popularity in the world, Bali gets around five million international visitors a year – and that’s a big market you can potentially cash in on. However the demography of the visitors keep changing so you need to keep readjusting yourself to serve the right market – in other words, you need to stay relevant.
  2. The cost of designing, getting the permits, and designing a shop, dollar for dollar, is relatively low compared to cities in the West.
  3. Rent is also relatively low compared to the West. Depending on the location, yearly lease in Bali goes from anything around $US 500 per square meter for subprime location, to $US 1,500 per square meter for a prime location.
  4. Staff salary is also relatively low in Bali, given that it is a provincial area and not a big city like Jakarta or Surabaya. At the time of writing, the minimum wage in the Badung district area (where you are most likely to set up your shop) is 2,900,000 Rupiah or around $US 220 per month.
  5. International visitors are willing to accept and pay international prices when dining out in Bali.
  6. Local suppliers in Bali are plenty and offer competitive prices, which will keep your costs down. You can also buy a lot of your supply requirements from a “pasar” or traditional wet market where prices are even cheaper.

Disadvantages of opening a restaurant in Bali :

  1. Given that Bali is a holiday resort, the market is thus seasonal and you won’t be able to depend on a steady stream of repeat customers all year round.  Generally speaking, the quiet months in Bali are January, February, March, and November.
  2. The demographics of tourists to Bali keep changing. For example, Australians used to dominate the inbound market, but as Aussie visitors decrease in numbers, we are now starting to see lots of visitors from China and India. This makes it difficult for a restaurant to keep relevant as they can’t easily change their concept and product mix just to satisfy a particular group of people.
  3. The tourism industry is prone and vulnerable to external and geopolitical factors. If your  restaurant concept depends totally on tourists as opposed to local guests, then you also carry this risk.

In conclusion, should I open a restaurant in Bali ?  The answer is YES, if you do have a long term plan because the opportunities are plenty here in the Island of the Gods.

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Author’s note :

Hello I am Eddy and co-owner of Dod’s Burger outlets in Bali. I have been in this business for almost three years and I teach people who wish to start a burger business from all over the world. I also give advice to those who want to start a business in Bali. Please reach out if you would like me to help you at hello@dodsburger.com. 

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