Many people have no idea how to start an internet cafe. Here are steps that you can actively take to make your dream a reality.
1) Start raising investment capital. This is the most important step and represents the biggest barrier to starting. Many entrepreneurs have been thwarted because lack of start up funds. If you are already wealthy (say from a previous business success), than you might already have enough funds. Sometimes a wealthy relative or friend can bankroll your endeavor. However, most people will not have t hings this easy. You will probably need a combination of your own capital and other peoples. Start putting together a financial plan. A second mortgage on your home might be enough. If you don’t have a lot of equity in your residence than you might need to live minimally and work several years to save money. Try raising some amounts from friends and family. You might be able to get the remainder that you need from a bank. Be sure to keep an excellent credit score because it will be critical in securing a large loan. Check with your local Small Business Administration (SBA) office because you might qualify for a low interest loan.
2) Start researching the business. Try finding a mentor who already has experience in the business. Decide if you want to partially cater to gamers (which will require high end machines) or purely to the casual internet market. Decide if you want to buy a franchise from an internet cafe company. This can be helpful to business novices because they ideally will already have a business plan in place. Often they will provide “turnkey” solutions and provide advice while operate. However, they will charge a percentage of your revenue as a franchise fee and require that you abide by certain guidelines. For entrepreneurs who crave true independence, this might not be a good option. This is more of a personal choice. Try talking to existing franchise owners and see how they fell. It will also be a good idea to search for good locations for a business. Remember ritzy places that have a lot of foot traffic will be very expensive to rent. Although an internet cafe might be busy in such a location, it might not be able to sustain the lease. Look at successful internet cafes in your surrounding area and identify what traits are important in your particular market. Some might be close to universities or public transportation. Try locating an under-served niche.
Starting an internet cafe is on many entrepreneur’s minds. But why this particular business? Why not a convenience store or laundromat? There are several reasons behind this.
The start up costs for a business are very important to entrepreneurs. Most are not extremely wealthy to start with and a prohibitively high bar prevents many a dream from being realized. The start up costs of an internet cafe are relatively low. For example, starting a restaurant usually requires industrial-grade kitchen equipment and expensive remodeling. Computers on the other hand are cheap and are constantly getting cheaper. Even high end computers (designed for gaming) are relatively cheap compared to the type of equipment other businesses require. Internet cafes do not need fancy interiors either.
Second, the economics are very good because of multiple possible revenue streams. The primary one is most obviously computer time (usually billed in hour or half hour increments). But other possible sources of cash include food and beverages (hence the cafe part) and computer services. Some cafes lure in customers with cheap internet time and make it all back with ancillary goods.
Third, some people just love technology. Owning an internet cafe allows some people to make a living from their passion. They get to spend the entire day dealing with computers. This itself is priceless.
Do not get carried away though. These area just the benefits of starting one. Like all businesses though there are downsides. Be sure to do extensive research before proceeding.
The internet cafe business is a popular choice for many reasons. What is your favorite one? Is it to be surrounded by technology? The good business fundamentals? Comment on this post or shoot us an email!
- August 2009 (3)
