I want to start a new business and I’m looking at internet cafe. Is this still a good business opportunity to start? How many months or years is the usual ROI? What do I need to set up this business? How much do I need to set up a few computers (10 -16)? Regarding softwares, I know you have to use original OS but how about games and other software? Do I have to use original?
I could share to you some bits and pieces of my strategy in our provincial setting. I have 2 LAN shops of 14 PCs each. One was an older group of PCs I retired from gaming and marketed for as an internet LAN shop only. The other group is on a separate location and targets gamers only. I think the key here is on lessening unnecessary expenses, having a consistent brand strategy and having a very creative promotions program that changes every time.
On lessening expenses, it is very hard to know at the start what is “unnecessary” for your area but you could observe your possible compet1t1on for this. In my case, separating the internet network and the gaming network really reduces software maintenance problems. For an internet client to run all of what he wants properly, port connections remain very open to usual attacks from the internet. So if the gaming network is mixed, the gaming experience would greatly suffer.
I placed airconditioning in the internet LAN shop and did not place anything of the gaming LAN shop. Why? because I noticed that gamers in our area prefers better computer specifications, new computer models every year for the new games released each year (performance doubles every 10 months) and exciting promotions! The only way I could fund this projects is by limiting expenses and air conditioning is a very huge one.
On our brand strategy, our customers always know that we have and can maintain the status of having the best PCs in the market of PC lan shops each and every year. We buy 6 PCs every year and using all of this strategies ROI is 0 days! Because I ask for a 3 months installment from the supplier (you could demand this when you are a big client already), and the PCs alone could earn the money for that in less than 3 months of our peak season!
I eat up the competition’s market share (we have 7 not more than 500 meters from each other) during off seasons when they have very little cash flow and they haven’t recouped investment yet. I offer 1+1, give the highest paying player for the day freebies, give very low off-peak rates, etc. this i could provide because i already recouped on the previous 3 months.
But of course this strategy can’t be used on all areas. Just study the market first and give it what it wants by saving on what it doesn’t appreciate. But most importantly, try to manage it hands on. So you would be happy with a 30k/12 PC net income of the off season especially when you don’t spend your time on it (passive income).
Note : This text was posted by rj juarez at www.entrepreneur.com.ph/board/index.php?topic=11811.0
Other Tips and Advice
Who comprise your target market – school children, high school or college students, girls, boys, office workers, parents? Each market has specific needs. For example, male students use the internet for research, but they also play online games.
Knowing your market helps you decide on what services to offer. The Internet is not for surfing the net alone. Most I-cafe owners say online gaming makes up 70% of their businesses. The other 30% comes from surfing, chatting and emailing. How about scanning, printing, typing, CD/DVD burning services?
Good location captures a bigger market. If you target students, being near the schools is ideal. But ask from your city/town hall on local laws about this. Otherwise, a place where your market has easy access to you has an advantage.
Game and software that should be installed in the computer must meet customers’ requirements. You need to make a survey to find out what popular software and games in your area. Every area has different requirements. Expenditure on software is a little higher than the price of hardware. This is indeed a burden for the internet café entrepreneur, but it is not a barrier.
Internet access speed also must be considered carefully. Choose the fastest speed available in your area. It also is one of the factors to attract customers come your cyber cafe.
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