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Are Internet Cafes Still a Profitable Venture ……..Part 2



Spend some time to learn about software licensing – this is one area in which internet café owners spends so little time with not unless they encounter a problem with the Pilipinas Anti Piracy Team for the use of pirated software. Most internet café operators have very little interest in software licensing since it is additional cost and it is something that they could not associate since software is an intangible product.  They are very much interested in the computer hardware specifications since this is something that they could see and touch.

                Basically when we talk about software in an internet café we are talking about two things:
1.       Operating System – collection of software that manages the resources of the computer hardware and provides common services for computer programs.
a.       For an internet café it is preferable to use a Microsoft Operating system since it is the operating system that everybody is familiar with, easy set up, computer hardware driver support and most of the computer applications that internet cafes uses was developed for this system.
                                                               i.      For internet cafes there are two licenses that needs to be purchased when using the Microsoft Operating system:
1.       Microsoft Professional Edition – license allows the user to use the software for business.
2.       Rental Rights Agreement - additional license that allows the user to rent out the software to other users for profit.
                                                             ii.      To make it more affordable it is advisable to purchase a computer system with an Original Equipment Manufacturer (OEM) software already bundled in.

2.       Application Software – these are software that is used to perform a single or multiple tasks like office and games.

For software licensing the general rule is that one software license to one computer.

                Make sure that you have a sufficient capital base – one of the most common notions is that you would need only a small capital in order to set up an internet café.  Most try to start with a small capital base and hopefully work their way up once it is operational.  The truth is that an internet café is a capital extensive business and if you start small you would just end up scrimping for money just to cover your operational expenses.  One must have enough capital base in order to cover the following:
1.       Computer Hardware with OEM operating system and Rental Rights Agreement – the rule is the more computer units that you would have the better.  The minimum number for you to break even is 10 computers less than that you would not be able to hold on to your operational expenses.
2.       Software licenses for the applications software like antivirus and LAN games.
3.       Computer networking equipments – hub, router, wireless router and cables.
4.       Support equipments like printers (one photo and one ordinary) with continuous ink system, fax machines, scanners and the like
5.       Rent – one month deposit and two months advance
6.       Tables and Chairs
7.       Carpentry work for the set up
8.       Business License and BIR registration
9.       Miscellaneous expenses like Meralco and Maynilad
10.   Operating expenses for at least two months of operations
11.   Budget for marketing
For a ten unit internet café there should be a capitalization base of around Php400,000.00 as a start up.

to be continued 

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