How to Start a Successful Internet Cafe Business in the Philippines

Introduction

Having an internet café is not easy as you think. Many failed in succeeding in this type of business because they think that all you need is to have a “budget” to circulate and you can have an easy business like it. But as a professional, I’d say that it isn’t really that easy task to build this kind of business. Because contrary to others belief, the reality is: you have to deal with a lot of factors when it comes to setting-up the whole café itself. From selecting the right kind of furniture, fixture, proper research to choosing the right Internet Service Provider ISP.

You might say that you don’t have any knowing in market research or you do not have the time and budget to conduct one, but I say that it’s not about the budget and the effort. It’s about knowing the basics that would make you create a good draft. A good business man would definitely agree with the fact that being prepared is far way better than no preparation at all.

To help you have a successful internet Café business in the Philippines, we would provide you tips on market research to selecting the right internet service provider, and right equipment you need to purchase to start your own business.

Research and Feasibility Study

Estimate your Start-up Capital - The first thing you need to consider if you wanted to start your own internet cafe is to have a capital to use. The capital is the starting money you'll need for purchasing your stocks, for paying monthly bills and for operations cost. You must determine how much money you are willing to spend in order for you to open up your business. Internet Cafe requires high capital. This kind of business is relying on computers that will be rented by the end-user. Somehow, it is similar to "apartment’s rental" wherein it doesn't not have to exert budget every week in order to gain interest.

To plan for the start-up budget you need, you should formulate your own simple financial plan and determine your projected start-up expenses and gross income. This doesn’t mean that you'll create a formal financial plan to do this. All you require is to gather up all possible expenses (operational, and start-up equipment) you can ever think off, for build up your internet cafe.

Tip: The ideal starting capital for a 5 seat low specification internet cafe is around 80K (this doesn't include the paintjob, the cubicles and furniture.)

Location - Location is one important factor in the success of this kind of business. It will be the headquarters of your business and it helps in connecting to your customers. Choosing a location will forecast possible income, and the primary factor for probability of business growth. Location would determine how much money you need spend. (Your security deposit and one month rental advance, permits and other necessary stuff).

Tip: Class B & C market doesn't usually have a broadband internet connection for their home. While class A individuals are smartphone users probably with Data and stable internet connection for home. Choosing a location near the city will prompt you to battle with more competitors and more expensive rent.

You can have your home as your business shop. It will grant you large amount of savings but by doing this, your safety wouldn't be guaranteed.

There are 200 cases of Internet cafe theft every year in the Philippines, it's better to have your business put away from your home.

In choosing a good location you must consider the following factors for your business to be effective:

1. Numbers Competitors Nearby - Make sure to check how many similar businesses there is whenever you are checking for location. The more competition,the harder to sell your services. If you locate yourself away from the city, put up your own internet cafe in places where there are no existing competitions.
2. Type of Neighborhood - If you are choosing location with Class A target, put up a high-speed internet connection and better computers internet cafe. Also, if you prefer putting up internet cafe with this type of neighborhood, you won't get much of success since most of Class A neighborhood has Internet Connection at Home. For class B and class C neighborhood, it is recommended to put up an internet cafe nearby since the majority of the neighborhood doesn't have their own computers at home.
3. Nearby establishments - Your business will be effective if it is near in schools. Majority of the students use internet cafe to research and print their reports, assignments and school projects. Avoid placing your business near public libraries and free WiFi hotspots, these places have free internet, so they won't have any reason to use your facilities. Also, near town centers will be a good site since there are many possible customers that will try your services.

Here's a video on how to set up your own Cafe shop business 

TARGET MARKET

Target Market - Determine your target market in order for you to determine your pricing scheme. It would also help you choose proper location and computer set-up to utilize. Your target market will give you the income you need, so it's recommended to take your time to study their habits, what games they play, or what do they usually do when going in internet cafe.

In order for you to know what I am talking about I'm going to give examples of possible customers that you can cater.

Types of Possible Customers:

1. Gamers - Gamers are those who spent minimum of 1 hours and maximum of 6 hours.
2. Casual Internet Users - They will surf the web to occasionally check their e-mail and their social network accounts. They surf for around 30 min to one hour.
3. Job Finders - They browse the web to find job and to check their e-mail. They usually surf for around 30 minutes to two hours.
4. Social Butterfly - These are the individuals who use messaging services like WeChat, Viber, Yahoo Messenger, and Line to chat with friends or relatives residing abroad. They surf from 1 hour to 3 hours.

One of the most of the successful business owner that I've met has a internet cafe that has a capacity of 50 person. He targeted gamers that are in the class B and class C market. The reason for this is the fact that they are the markets who are willing to spend almost 3-7 hours on his internet cafe and most of the time these gamers held DOTA and LOL competitions to keep the sense of sportsmanship in the game. This is the opportunity he grabbed, and this made him thousands of pesos every month.

Business Intelligence

The difference between business owners who get rich and those who don't is simple. Business owners who got rich always have a strategy to catch the attention of customers. Business intelligence will be your possible strategy in order to keep the customers from coming through time.

Example of simple Business Intelligence you can use:

1. Your internet shop should be fully air-conditioning and is really cold for the customers to feel comfortable with your services.
2. You can sell log-in access ticket rather than controlling customers computers for easier access. You might also consider pre-selling the ticket with large discounts for those who purchased longer hours.

You can set a system that will allow the customer to contact the counter through chat. This will allow communication between the user and the custodian when something go wrong. This will also useful when you have a large fleet of computers

Internet Cafe has different strength and weakness. Make sure to research your opponents well, in order for you to compete

Strength and Weakness of Competitors

it is recommended to study your competitions pricing before you start up your own. This will allow you to figure out what kind of computers you are going to set-up for your said business. Know their strength and weakness so you will have an idea on what could you possibly improve to make your business more enticing.

Key Difference - In order to keep up with the sales of your competitors, you must point out your key difference between them. They have build trust in their customers and it'll be a hard to compete with them if you do not have something that will motivate their customers to consider your internet cafe as their preferred shop. For example: If your competitor has weak air-conditioning unit in his internet cafe, you should invest into air conditioning unit to boost up your selling factor. Here are some of the good selling points to customers that you could try to strengthen your internet cafe:

1. Faster internet connection
2. Faster Apps Response
3. Cold environment
4. Held monthly gaming tournament
5. Large variety of games and applications
6. Value added promos and services

Services to Offer

Before you purchase even one single computer for your internet cafe, you should know by now the services you'd vend to your clients. This will be your basis of strength and weakness. The more services you offer, the more reasons customer would check on your shop.

- Internet

- Games

- Private Chat

- Printing Services

- Photocopy

- Others

You can offer photocopy service if you are near any government offices, schools and colleges. This will generate extra income for your internet cafe. Just make sure that your extra services can be attended to maximize the sales.

Internet Connection

Fiber optic internet is the best internet for internet cafe since it delivers high speed internet connection upto 50-300 users at the same time.

Requirements

The initial requirements for an internet café is Complete computer set-up, tables, softwares and networking tools and fixture and stable internet connection. There are no right price when it comes to these requirements, the only limit you have here is your budget.

1. Internet Connection – Fast internet connection is needed in this type of business. The best way to satisfy your customer needs is to have an average of 10-50MBPS internet connection. This will cater 20-50 computers at the same time without losing bandwidth speed.
2. Networking hardware – Buy Network LAN controller that will enable you to share internet connections for all of your units.
3. Tables & Furnishing – It is cheaper and more efficient to hire a contractor who will work on your desks and walls rather than having to do it yourself.
4. Computer Peripherals – Computer peripherals may differ depending on the specifications you designed.
5. Other Peripherals- Photocopying machines, Printers, Spare Parts, and other tools that will help you slowly expand your business.

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