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Billy Danze
Joined: 25 Oct 2009
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 Posted: Sun Jan 31, 2010 6:15 am Post subject: Question about businesses in Korea |
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I have no idea how so many places are able to stay open when it seems like they are empty all the time. Is this because rent/overhead is so cheap?
I'm also interested in learning about wages for various jobs here, the policies for starting a business here, etc.
If anyone has info I would be happy to hear it. |
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kinerry
Joined: 01 Jun 2009
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| Posted: Sun Jan 31, 2010 6:28 am Post subject: Re: Question about businesses in Korea |
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| Billy Danze wrote: |
I have no idea how so many places are able to stay open when it seems like they are empty all the time. Is this because rent/overhead is so cheap?
I'm also interested in learning about wages for various jobs here, the policies for starting a business here, etc.
If anyone has info I would be happy to hear it. |
They still haven't figured out this business thing. I often wonder how so many can stay in business when they make only 20 won on a 6000 won item. That sells only 2 or 3 times a day.
Their marketing efforts are still in the 1920s compared to the US and their inventory systems are even worse.
Here's an example of a typical inventory system in Korea. A store buys some of a meat product, it sits on the shelf and expires, so they order more thinking it will eventually sell. They get a hot new products and it's gone in a few hours, so they order as few as possible and wait the few weeks it takes for it to ship in and then they are gone in an hour again.
I don't think they are going to "get it" for a couple of decades, the bad businesses have to go bankrupt, over time they will figure it out. They have just grown wayyyyyyy too fast to go through the typical market cycles and react to the market forces. |
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Billy Danze
Joined: 25 Oct 2009
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| Posted: Sun Jan 31, 2010 5:20 pm Post subject: Re: Question about businesses in Korea |
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| kinerry wrote: |
| Billy Danze wrote: |
I have no idea how so many places are able to stay open when it seems like they are empty all the time. Is this because rent/overhead is so cheap?
I'm also interested in learning about wages for various jobs here, the policies for starting a business here, etc.
If anyone has info I would be happy to hear it. |
They still haven't figured out this business thing. I often wonder how so many can stay in business when they make only 20 won on a 6000 won item. That sells only 2 or 3 times a day.
Their marketing efforts are still in the 1920s compared to the US and their inventory systems are even worse.
Here's an example of a typical inventory system in Korea. A store buys some of a meat product, it sits on the shelf and expires, so they order more thinking it will eventually sell. They get a hot new products and it's gone in a few hours, so they order as few as possible and wait the few weeks it takes for it to ship in and then they are gone in an hour again.
I don't think they are going to "get it" for a couple of decades, the bad businesses have to go bankrupt, over time they will figure it out. They have just grown wayyyyyyy too fast to go through the typical market cycles and react to the market forces. |
I wasn't looking for this type of response which was critical of businesses but I guess I'm not surprised. I was hoping for someone telling me about their tax structure for businesses, what rates are for employees, how much rent costs, how easy it is to start a business, etc.
You do realize Korea's economy is doing pretty well and unemployment is very low. Must be doing something right? |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Sun Jan 31, 2010 5:36 pm Post subject: |
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A lot of small businesses here don't pay tax, something you as a foreigner will not get away with. The minimum wage is w4,220 per hour. Some businesses don't pay that much to their employees, you wouldn't get away with that though. Rents can be very cheap but deposits are huge by western standards, some landlords will let you pay the deposit off though.
The toughest thing is if you start a new business idea, a Korean with far more cash will copy you. They will usually open next door to you. I am not complaining, it's why restaurants are so cheap in this country.
If you have a good concept, a lot of cash and you aren't afraid of hard work, go for it. My advice would be try to find a niche that Koreans wouldn't bother with, and keep the appearance of struggling in business, even if you aren't. |
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frankly speaking
Joined: 23 Oct 2005
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| Posted: Sun Jan 31, 2010 6:46 pm Post subject: |
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A lot of money is made from selling one's business rather than making it from sales. There are a lot of people that are good at advertising how successful their business is and after a year or two they re sell their business for huge profits.
I thought that the minimum wage was raised.
Overhead can be quite high for some areas.
Before setting your mind into any business venture in Korea get a lawyer. |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Mon Feb 01, 2010 12:50 am Post subject: |
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| frankly speaking wrote: |
A lot of money is made from selling one's business rather than making it from sales. There are a lot of people that are good at advertising how successful their business is and after a year or two they re sell their business for huge profits.
I thought that the minimum wage was raised.
Overhead can be quite high for some areas.
Before setting your mind into any business venture in Korea get a lawyer. |
In our countries a lot of money is made from buy a rundown business, build it up and sell it for a lot of money, in Korea, however anyone with enough money to buy your business is more likely to open next door to you. This a gut feeling, I don't have proof.
w4,220 is the new increased wage, it was w4,000, which would be good as an employer. But I would hate to see how high the shrink (products given away, stolen, or damaged) is. |
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broken76
Joined: 27 Jan 2008
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| Posted: Mon Feb 01, 2010 1:07 am Post subject: |
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Actually if you look at most businesses in Korea they fail and don't last very long. In most cases businesses that succeed aren't from the actual business themselves but from selling the franchises. Koreans very much follow a trend, whoever starts the trend reaps the rewards.
Most mom and pop places fail within a year. Looking at a typical Korean neighborhood you see shops come and go on a monthly bases. Overall rent is high and even though general overhead can be low it adds up if you're not doing well.
For many business breaking even and earning a salary is considered successful. Recouping the initial investment is in most cases not possible for many businesses. The main reason why you see them continue is most Koreans can't seem to retire gracefully and relax. |
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