Bali Business Dream or Fantasy
We daily receive enquires from persons around the world telling us they have long been dreaming of living and working in Bali. While I would never risk offending anyone I always secretly wonder is it a 'Dream or Fantasy' they have.
Fantasy is an imaginary fiction that belongs in the world of make believe and daydreams. In fantasies we can each imagine our perfect worlds and imagine what it would be like to experience everything our heart and mind desires. A dream however is a vision of achieving our desires in the real world. Unlike fantasy dreams do come true, but only if we take ACTION to work towards them. A dream with no action is just a FANTASY (But you already know that and that's why you're ready to take action).
Over the years we have learned that one of the biggest factors that prevent many people from achieving their dreams of living and working on Bali is thinking they lack adequate business investment capital. If this is you, this article aims to empower and encourage you with the knowledge that plenty of the foreign nationals living their dreams on Bali today were achieved on shoestring investments and the power of online marketing, like that freely available by being listed in our Bali Business Directory.
The most successful method to start a business in Bali with very little money is to sell others people's products and assets, as an Agent or Agency. The most common being Bali property sales/rentals/vacation rentals/tours and event organizers, like the increasingly popular Bali wedding planner business. Then you have the more traditional Indonesian and Bali product lines to sell, like handicrafts, furniture and fashion garments just to name a few.
Let's take a closer look at the most popular agent/agency Bali business options that have proven to be very successful for many foreign nationals and will continue to offer increasingly excellent prospects to profit from in the future.
Property Sales: Bali Property is a long-time favorite and as Bali continues to develop, so do the opportunities to profit from operating a Bali property agency. While there are plenty of big players with big offices (and overheads), there are far more independent property agents working with little more than a cell phone. From multi-million dollar luxury Bali villas to room rentals, there are plenty of Bali business models to ponder in this high profile and vital business sector.
Perhaps understandably most Bali property agents focus their efforts on the big ticket items, the many high end luxury Bali villas built mostly on foreign capital to sell for profit. There is no shortage of such villas and the standard 5% commissions paid to agents are a big incentive. It must also be noted that there is no such thing as 'exclusive agents' on Bali. Owners will list with as many agents as possible to get their investment capital back (and big profits) and move onto the next villa project.
However, many foreign national Bali property agents have also found great success and opportunity operating in the local property market. As in everything else, the lower the price the more numbers are sold. Local housing may well include plenty of million dollars homes; however the average home price sits around USD80,000 and starts from just USD20,000. Commissions are still 5% and obviously many more potential buyers. I've often come across expats driving around residential areas building their property portfolios. Local sellers often do no more than display a handwritten 'for sale' sign and phone number. Other local property owners and developers will use traditional printed publications, so property agents find plenty of leads in the many classified ads in the free Bali newspapers.
Property Rentals: So, you want to start a Bali business selling Bali property. Don't forget about the long-term rental or leasehold market. While many foreign property buyers bypass Indonesian laws that prevent foreign nationals owning land in Indonesia by using an Indonesian national as a nominee owner. Many prefer to hold such assets in their direct names and at the same time respect foreign land ownership laws. However, you are more and more likely to only find leasehold land and properties for sale these days in the most expensive southern Bali locations. Common legalized long-term leasehold land contracts run for 25 years with a further 25 year option. However, plenty of Bali investment villas are also sold by developers for similar contracts.
Far more Bali villas are rented on 1 to 5 year contracts. These villas are easy to find and most owners will just put a 'for lease' sign on the gate, knowing that agents will soon contact them offering to find foreign guests. Normal owner/agent agreed commissions are 5%, however many agents will further inflate rates, this ensures that shorter leases are often much more expensive and can range from USD5,000.00 for basic non-furnished villas, to well over USD20,000.00 per year for luxurious furnished Bali villas.
Vacation Rentals: The bulk of transactions in the Bali property sector will always be in the vacation/hotel rental area of business. Bali is a world famous holiday destination and visitor numbers continue to rise. Many of the foreign nationals that manage and/or promote and sell Bali villa rentals/vacations only operate in this one area of business. However, there is no reason why you can't trade in all property models as above. However, with hundreds of transactions made every day and normal commission rates being 20% (again, many agents add further costs, like a tax & service charge) of nightly rates the Bali villa vacation business is a very attractive low-cost entry level Bali business.
In every main Bali tourist location there are many hundreds of full time villa rentals, they come in every quality level as well as price level. From USD30.00 per night to beach front palaces costing USD20,000.00 per night. Bali has a villa for every budget and every extravagance. There are many ways to secure villas to promote, but again very few villa owners will honor exclusive promotion rights. In most cases it’s first-come, first-served, so a good size Bali villa collection to offer your prospective online guests is the way to go.
While most Bali villa vacation or short stay agents all have professional well managed full time villas on their books, we know of two avenues often used by villa vacation agents to allow further agent profits for villa vacation agents willing to get more involved. Bali has no short supply of fully furnished villas on the open market. Many owners are happy to let their properties for short duration bookings while waiting for a buyer. You will have to service your guests, as in provide airport transfers if required and daily cleaning services, plus toiletries. However, this method is effective in enlarging your profits. One step further is to rent and furnish your own villa as this will give you full control over availability and the lowest possible nightly rate.
However, plenty of agents are very happy to take bookings/commissions from sales and have no part in after sales, such as in-villa services. That's because their promoting well managed company villas, that operate everything in-house from airport transfers, to daily house-keeping services and everything in between. However, vacation villa agents willing to get more involved can make even more profits. Another easy track to achieve extra profits is to offer optional extra services either at time of booking or at check-in. By simply offering partner services, like car/motorbike hire, tours, activities, even food & beverage package options you can dramatically increase bottom lines.
Finally, it should be said that due much in part to the dramatic price increases over the last several years for all Bali property classes, budget self-contained expat/foreign national accommodation has become the focus of investment of late. Just as budget international brand hotels have sprang up all over Bali and even Denpasar, so have private budget accommodations aimed at low-budget, price concerned long-stay visitors and expat residents. In almost every street in urban Bali you will find a house split up into private rented rooms or purpose built blocks of rooms. These traditional rooms, known as 'KOS' locally are the traditional housing for the hordes of workers and students that leave their homes in villages around Bali and Indonesia wide to work in bigger numbers in the tourist sector and study mostly in Denpasar.
While many from around the world come to live and work on Bali to enjoy a better life-style and even luxury life-style that they could not achieve or afford at home, it must be said that there has always been long stay expats living in low cost rooms. Low end non-air-conditioned (non-anything pretty much) can still today be found for as little as USD20.00 per month. While most locals believe that all foreign visitors have a bank balance equal to 'Bill Gates' (at least those that have heard of Bill Gates), there is no shortage of foreigners living in Bali on shoestring budgets. However, a number savvy of property owners and property agents have upgraded many of these plentiful rooms (and price to rent) and now market fully furnished, very comfortable rooms to expats (and yes they are air-conditioned). I know of foreign property agents that have secured long-term room rentals for as little as USD200.00 per year and after upgrading them are now renting to foreign nationals at USD400.00 per MONTH.
Traditional Bali Products: Bali is a great place to source Art/Handicrafts and Wooden Furniture products. Traders on Bali bring in products produced all over Indonesia, although the villages north of Bali are well known for the largest handicraft range of products and have long produced to orders placed by exporters based on Bali.
There are a number of ways to profit from traditional handicrafts. There are two very big exporters on Bali that both deal only in full container loads to mostly North American and European dealers. However, there are many very successful smaller dealers based both on Bali selling all the common available handicrafts and wooden furniture/home wares to the many worldwide dealers. It would be very easy to put together an impressive collection of handicraft items to promote online. Once buyer orders have been secured with deposits you can place orders direct with produces or deal with the many traders on Bali that always carry large stocks. These suppliers are also great places to pick up samples and product photos.
Silver: Bali is famous for fine quality Silverman workshops and showrooms. The items they produce are available in jewelry shops around the world being offered at prices sometimes over 1000% what you can buy them for here. Silver has some very nice dealer advantages that have made this one of Bali's most successful exports. Firstly, it's very much a product of 'Art'. This attracts people looking to profit from a creative outlet and many the chance to design their own range of silver jewelry. Silver is an easy product to ship around the world or even in your luggage.
Lastly, silver is CHEAP! It's sold by dealers based on the value of 'Art' and 'Design', having nothing to do with the weight of the sterling silver content.
Potential for profits from silver producers, exporters/wholesalers and retailers are very high. Plenty of silver buyers on Bali sell retail direct and will even produce one off client/buyer designs at a premium and bank great returns for their efforts. However, be sure to shop around for suppliers to get the best buyer prices. Bali has long been famous for silver and many tourists want to go home with a nice piece of silver to add to their jewelry box. This has led to shops catering more to retail buyers rather than dealers. Many have commission deals with tour guides and often serve busloads of tourists paying inflated prices to cover guide/driver commissions.
Fashion/Garments: We obtained the Bali business license and PT Company formations for two foreign owned handicraft retail stores in Bali's Seminyak. Both are trading very well and enjoying great investment returns from high price mark-ups selling retail to tourists. Both stores have been very successful finding wholesale buyers. These stores trade in home wares/handicraft/souvenir items. However, I believe most success has been achieved retailing and wholesaling locally produced leather products, like bags/belts/shoes and accessories.
However, we have to date produced seven retail/import/export Bali business licensing for foreign national owned shops operating in Seminyak, mostly selling locally produced garments that are sold both retail and wholesale. All client Seminyak boutiques are doing very well and so they should. They have local tailors produce current designer brands at very low cost, then sell at very good high mark-ups to the trendy Seminyak shoppers and wholesale/sell to buyers around the world. You will often find buyers in their shops placing large orders, often under their own label brands.
Garments have long been a Bali business winner and has come a long way from beach sarongs and hippie outfits. Bali has developed a high quality mix of both local and foreign producers making excellent quality products at very low prices for wholesale/business buyers. These garments are today found around the world in markets and retail outlets at greatly increased retail prices. However, you can buy retail at the same rates right here in Seminyak. Sell a range of garments retail/wholesale online and place orders once your buyer orders are secured with a deposit or open an exclusive boutique in trendy Seminyak to profit the most.
As you can see from above the Bali business options are plenty for Bali investors looking to start a Bali business on a shoestring budget. Your options are limited only to your imagination and creativity. Please contact us for more information and help to start your exciting and profitable Bali business TODAY!
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