Author Topic: Internet Cafe Business  (Read 1453 times)

Offline jdfaustino

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Internet Cafe Business
« on: July 25, 2007, 07:15:04 PM »
Hi! I;m planning to put up an Internet Cafe business by August starting off with about 8-10 play stations. I've made some computations (Mix & Match at Rising Sun) on how much each PC would cost. I've come up with a Php29,000 setup with a 17" LCD Monitor. Is this too much considering its just a Pentium D (3.0Ghz)? Any inputs would be most appreciated. Thanks in anticipation.

Offline nmeuvdast8

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Re: Internet Cafe Business
« Reply #1 on: July 25, 2007, 08:49:51 PM »
not to discourage you, but are you sure about this? have you checked your location? if there are a lot of i-net cafes around, you'll hard a hard time competing. just ask Liz, she owns an i-net cafe (paging liz, your inputs are needed)

as for the hardware, that processor is ok - for now. you can even get AMD processors for more bang for your buck. 1GB memory, and a dedicated video card is required. also, i've read from a tech magazine that microsoft is set to retire xp at the end of january 2008. this is another thing to consider, the OS you'll be using.

anyway, good luck on your endeavor!

Offline friendlyfire

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Re: Internet Cafe Business
« Reply #2 on: July 25, 2007, 08:56:19 PM »
bro, think millions times before you engage in this kind of business. i am also a lanshop owner and my income is declining every year.
I love the smell of napalm in the morning!

Offline Louie

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Re: Internet Cafe Business
« Reply #3 on: July 25, 2007, 09:06:20 PM »
try to reduce cost as much as possible

Offline jdfaustino

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Re: Internet Cafe Business
« Reply #4 on: July 25, 2007, 09:45:45 PM »
Hi Louie, nmeuvdast8,friendlyfire! Thanks for you quick replies and inputs. Since the  capital investment is a big amount (a little over P300,000) of hard earned money on savings I'm now getting a bit discouraged. Some questions though...

1) Why will a new Internet Cafe beside existing ones have a hard time competing with it's neighbors if it offers the same games, price per hour, same or if not better facilities (having an LCD monitor, better speakers, better graphics and game response, etc).

2) Why is it that some shop's income have declined? As per my accountants computations ROI is in 1.5 years at 60% of the monthly income.


I've seen some internet shops business thriving with lack of seats even. Your inputs will once again be appreciated on this.


Offline jarod_0122

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Re: Internet Cafe Business
« Reply #5 on: July 25, 2007, 10:09:45 PM »
1) Because you only have 7-9 units for rent (minus the server). Rental/hr is P15 nowadays. Even Netopia is going with the flow. One PC can no longer earn you P100 today.

2)Dahil bawat kanto ay my internet shop. The market is shrinking. PC is just a home appliance today. You could even get a Free daw PC by subscribing to PLDT.

 

   

Offline lxi

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Re: Internet Cafe Business
« Reply #6 on: July 25, 2007, 10:22:12 PM »
your accountant's computation seems impossible. that ROI of 1.5 years should have you grossing P1,500/day. that's 100 hrs in a day (at P15/hr). 100hrs / 8 seats = 12.5 hrs per PC. seems impossible especially now that students are not allowed anymore to stay at internet cafe's during class hours.

i have estimated monthly expenses based on a 10 hr daily operation to be at around 27-30k/ month.



Offline lxi

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Re: Internet Cafe Business
« Reply #7 on: July 25, 2007, 10:24:01 PM »
1 piece of advise for you: don't quit your day job.

Offline jdfaustino

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Re: Internet Cafe Business
« Reply #8 on: July 25, 2007, 10:27:34 PM »
Hi lxi & jarod_0122. So guys are you saying its no longer lucrative to get into the Internet Cafe business anymore? If I don't get my ROI on a capital of 300,000+ in at least 1.5 years then it would be futile to get into it right?

Offline jdfaustino

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Re: Internet Cafe Business
« Reply #9 on: July 25, 2007, 10:29:23 PM »
I handle the approval for Auto loans of brand new cars, vans, suv's, etc. Maybe you guys can help me source out clients. I give generous commissions.

Offline jarod_0122

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Re: Internet Cafe Business
« Reply #10 on: July 25, 2007, 10:43:03 PM »
Internet cafe business is not what it used to be.I've it read somewhere, they call it Palabigasan ng Bayan. Well, it's true. But men doesnt live by rice alone. Dapat me ulam din.

Thanks for your offer btw.


Offline wheelee

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Re: Internet Cafe Business
« Reply #11 on: July 25, 2007, 11:13:50 PM »
wow I never thought someone will still open a LAN shop nowadays - well I guess if your the only one in town it could be a good deal but if your one in many, this are hard times.

Offline nmeuvdast8

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Re: Internet Cafe Business
« Reply #12 on: July 25, 2007, 11:35:23 PM »
1. Php 15.00 / hour won't cut it. There are a lot of shops that offer Php 10.00 / hour. if you have a competitor that charges at this rate, you'll have a very long ROI.
2. assuming that your calculations were right, you'll be at break even after 1.5 years. in that span, your PCs would be outdated and you'll need to upgrade again (that is if you want to continue your venture). this would be another cash out for you netting you a negative cash flow, earning nothing. and with the rate the computer depreciates nowadays, selling your old units will be a tough task.

and oh, thanks for the offer.

Offline TNT2bluz

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Re: Internet Cafe Business
« Reply #13 on: July 26, 2007, 01:23:05 AM »
I handle the approval for Auto loans of brand new cars, vans, suv's, etc. Maybe you guys can help me source out clients. I give generous commissions.

Dude, let me offer you the short route to shock treatment just to jolt you out of something inherently infeasible at this age and time.

The notion of even thinking of going into a saturated market with absolutely no level of barrier of entry to competition is an uninspiring and unoriginal approach to doing business.

Do the math 8 PC's at 15 pesos per hour for 16 hours is only 1920 per day gross revenue.  That is supposing you have 100% all time utilization which is NEVER the case. Expenses include DSL, electricity, salaries, depreciation of equipment and rent.

Can you show me how you expect your ROI to be in 1.5 years with an average utilization of 40%, with a fixed cost of about 20,000 a month?

Stick to what you know. Unless this was a bait to lure agents for your auto loan endeavors I think you are yourself unsure of what to do with your savings.

Business isn't for everyone peeps.
come on Toshi!

Offline Torment

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Re: Internet Cafe Business
« Reply #14 on: July 26, 2007, 01:38:05 AM »
there is one place that inet cafes thrive. put them in a heavily populated mall. thats d pattern netopia has taken

Offline TNT2bluz

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Re: Internet Cafe Business
« Reply #15 on: July 26, 2007, 01:47:54 AM »
Oh-k...now that really depends on how much you plan to charge.

But with 8 pc's?  Malls charge a premium for space and gets a percentage of the revenue.
come on Toshi!

Offline splerdu

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Re: Internet Cafe Business
« Reply #16 on: July 26, 2007, 04:59:43 AM »
Definitely not workable with 8pcs. I'd recommend starting with at least 50. Multiplayer games are all the rage, but to be able to support pick-up games, you have to be able to accept at least several groups of 5.

A shop with 8pcs.. there's no reason to visit that at all. You can't even get all of your friends to play unless the place is completely empty when you come in, and it couldn't even support a DoTA 5v5.
fhtagn

Offline Alexander

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Re: Internet Cafe Business
« Reply #17 on: July 26, 2007, 06:22:36 AM »
you can actually work with just 8 computers but it will not be for gaming. i suggest you change your business plan and just make an biz cafe instead.

I will be opening an internet/biz cafe this august too. target market is not the students who play games, but more of the young entrepreneur/professionals who like to hang out or have meetings in coffee shops. The catch for your shop will be you have coffee, food snacks, high speed internet and tables big enough for you to have a pc/laptop, work papers and food on it. having a photocopier/fax/scanner would help you make it more conducive for work or meetings. you will be profitting more from the food and drinks at the same keep them in their tables thru smooth streaming videos, quick downloads with an hourly charge of course.

I have seen biz cafe's in our area but they have made it as conducive as the coffee shops.

Offline Alexander

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Re: Internet Cafe Business
« Reply #18 on: July 26, 2007, 06:31:34 AM »
but if you really insist on having an internet shop for games, you have to have a lot of stations and i would suggest you try to find another internet cafe away from your area and see if you can convince them to have a vpn/hamachi/gg client with you guys. that way anyone who visits your site doesnt have to come with a group to enjoy lan games...that will make you a bit more unique from the rest.

Offline giMhik

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Re: Internet Cafe Business
« Reply #19 on: July 26, 2007, 07:37:48 AM »
@jdfaustino, you have inquired at the right place.  Good move.  I also like Alexander's idea but make sure you have a lot of entrepreneurs in your area.  Wifi is a plus. 

It's a plus also to have a big and secured parking space.  If you advertise your parking space is very secured, expect businessmen to occupy your biz cafe.  Btw, parking space is a great business as well.