One of the options I studies was to start an internet cafe , as I found it has the following advantages:
- Online gaming industry and the influence of the internet in our daily lives, was obviously rowing worldwide. Filipinos as part of this globe, and their great passion for social life , a lot of them need to be connected.
- But not every Filipino has access to good hardware and a decent internet connection. So many of them need to go to internet cafe.
- Internet Cafe can start as small business that may generate descent income
I thought I need to study some practical ideas and steps on how to start (and maintain) my own Internet Cafe.
- The first thing to consider is budget – An internet cafe with around 20 seats will push you back P900 to P1.2M in capital and more money if you want to add more seats.
That time I don't have the cash, I started to think of partners to finance. But I don't know more about partnership or how to lend money. This was a reason to make my study took longer time.
- Of course the second is Location which is one of the key factors for success. There some ideas how to find the typical location for Internet Cafe: near a school, more passers, not too many competitors in the area unless its very commercial. The location and space area will determine the rental rate that may be between 15,000 to 25,000 pesos monthly. Of course some locations can cost you more than 40,000 pesos
- Computer Units – I realized that even my budget is mall , but purchasing good units is more useful than used or cheap units. I started to think of 25K to 35k as the average unit price , that means I need to budget about 900,000 if I want to put 20 units as mentioned above
- Internet Connection – I cant forget how annoying for me as an the Internet cafe customer to experience slow connection and I will never come back to that shop. A faster and decent connection in my cafe the important key selling point. Good computer units and fast connection means success beside of course reasonable price.
- Set-Up – I'm not a technician, if I was the business will be easier! I need to hire the services of a technician or her one full time which is more expensive. I need to set up the tables , the computer units connections and the lightening of the shop. This may need 200,000 - 300,000 pesos depending on what set up I want for me Internet cafe.
- Software – In Internet Cafe , I think noway o use non genuine products. For office applications, Open Office is free and mimics Microsoft.
- Other services – Some other services can generate income in the shop, like food and drinks that are a good extra source for income, Printing, Fax and Xerox are other good sources of additional revenue.
- Employee – I need to look for some one that I trust to hire in addition to install a control system . I thought that I need 2 employees of I want to make it open for 12 hours a day , as I noticed most of the Internet cafes are running 12 or even 24 hours daily
- Pricing , this is one of the most important factors in Philippines, I noticed that price are too low reaching 20 pesos per hour.
- Operating Cost and Profit – say operation 12 hours a day. 10am to 10pm, And let’s target 50% occupancy rate. that means that the PCs are rented by customers half of the time. Let’s also assume that the charge P20/hour. With those info, let’s go compute
THE CAFE of 20 PCs: P20 x 6 hours per day = P120 per PC/day/
P120 x 20 PCs = P2,400/day (or P72,000 monthly).
Subtract the following regular expenses
Rental = 15,000
Electricity ( for the 20 PCs) = 20,000
DSL fee = 10,000
Taxes = 3,000
Salary (for 2 staff) = 16,000
Others ???
Ops! It is almost 65000 pesos
That is why I did not go with it. I found out to go with an Internet cafe in Philippines to generate enough income for me , It must have at least 30 units , and be in a location that is suitable for 24 hours operation, with some expats and tourists around to make the price higher , but not more than 30 pesos per hour. These options would raise the required capital to almost 1.5 or 2 million peso.
