Are Internet Cafes Still a Profitable Venture ……..Yes, but You have to do it the Right Way From the Start First Part

                Every now and then I surf the web trying to find articles or blog post about the internet café industry in the Philippines.  Sadly postings that I came across mostly wrote about the bad experiences of operating an internet café.  With all of these bad things written about internet café industry, one might wonder is it still a viable business venture that once could invest in.  My usual answer is “Yes but you have to do it the right way from the very start in order for you to succeed.”

                There is a common notion that an internet café is a simple business.  Just set up a couple of computers, network them and connect them to the internet then you would start raking in money.  What they do not know is that like all businesses it requires a lot of preparations, sacrifice and learning’s before one would be able to survive in this business.  One must have it right from the very start since there is very little room to make adjustments once you have already started.  You would find yourselves losing a lot of money just to sustain your operations.

                Start off with knowing about the computer – one must have a deeper understanding on how a computer and a computer network works.  When I started off one of my biggest problem is what do I do when my computer units breaks down.  A computer technician charges around Php300.00 just for the basic repair and the price goes higher when they have to do some other services just to have it fixed.  So if you have around 20 computers you do the math and you would just find yourselves paying what you have earned to the computer technicians just to maintain your units.  Just know the basics:

–        the parts of the computer and computer networking

–        how it operates in relation to the software that you are going to use

–        how to do proper maintenance and basic trouble shooting

                Understanding your target market – knowing your target market would have a great effect in terms of your success as an internet café owner.  It is actually one of the corner stone of running a business successfully. It would affect your location, services to be offered and price. A lot of internet café owners are complaining that they are not able to charge more for their services since they have targeted gamers who are often children or young adults who does not have the capacity to pay more than Php10.00 per hour for computer rentals.  Understanding your target market is the key that would influence the type of computer units that you would purchase, the design and marketing strategies that would be implemented in order to connect with your target market.

                Knowing government regulations – internet cafes are regulated by the local government units. Most of the time the internet café owners set up their internet cafes and worries about the regulations later.  It is best that before setting up the business one must research on the following:

–        Ordinances that regulates the operations of an internet café in a certain place – depending on the location there are restrictions imposed on allowing children in the internet cafes during school hours. Another example is the regulation prohibits the establishment of an internet café 100 to 500 meters from any educational institution.

–        Business license fees imposed by the town or city that you would be operating in – the rates and the manner in which how it is computed varies from one place to another.  If a particular place is not really interested in having a lot of internet cafes set up they could impose a huge amount just to discourage people from establishing an internet café in their area.

–        Income taxes and withholding taxes schedules and payments required by the BIR.

To be continued